Category Archives: Business Plans

Forecasting for Entrepreneurs – How to Develop Assumptions

Joel Schwarzbart gave a great talk on forecasting for the CSUF Startup Incubator

Joel Schwarzbart gave a great talk on forecasting for the CSUF Startup Incubator

Joel Schwarzbart describes himself as half a CFO. What does that mean? Well, basically it means that Joel is a consultant who does many (if not most) of the financial activities that a full time CFO normally does but he does them for multiple clients.

Earlier this week, Joel gave a talk at the CSUF Startup Incubator in Placentia (by the way, we  bring in experts all the time to give talks and to have office hours, you can see all of our planned events by going to our Eventbrite page) about how to do forecasting if you are an entrepreneur working on a startup. While he talked at great length on a number of subjects that are important for forecasting there was one thing that I want to focus on here: Assumptions.

The accuracy of your forecast, which is the combination of all of your projections for your business, is in large part determined by the accuracy of your assumptions. Some things you have to assume:

  • How much you will spend on marketing efforts
  • The costs of the raw materials that go into making your products
  • Variable employee costs
  • Conversion rates on your ads
  • Your effective tax rates
  • Travel expenses
  • How many new customers you will bring online
  • And the list goes on and on and on….

Many of the entrepreneurs and students I work with do not give nearly enough consideration to their financial assumptions and yet it is from these assumptions that all forecasts come from. Fortunately, there are some easy ways to develop your financial assumptions and here are some of them:

Company Financial History

If your company has been around for a couple of years you will have to assume less than you would if your business is a startup. Simply use your actual history and financial statements to inform your assumptions. You will still have to take into consideration some other data points that I will cover presently.

Industry Norms

For our students, I always recommend them to look up the industry norm financial ratios in the library. In our library there is a database of financial ratios that is broken up by industry and by company size (there might be a huge difference in quick ratio for a small company versus a large company after all). With these kinds of industry and company-size financial ratios you can compare them to the financial ratios that you have developed for your pro forma (forecasted) financial documents; if the financial ratios you have aren’t even close to the industry norms then you might have an issue.

Besides financial ratios, there are many other kinds of industry norms that you can find out if you look hard enough or ask the right people about (industry magazines are usually a good source for this kind of information as are people who currently work in a given industry). For example, if you are opening a restaurant it would be a good idea to figure out your turnover rate (how many times a table is used over a period of time by a party).

Other Secondary Data

Besides industry norms, there are a lot of good sources of secondary data, which are nothing more than other sources of relevant information. For example, knowing the general strength of the economy is a good thing to know; knowing the strength of the economy for your area of operations is even better. Maybe the weather plays a part in the success of your business or maybe new regulations will play a more significant role in your business. There are many different fields to look into for secondary data.

(Yes, industry norms are a kind of secondary data but I think they’re important enough to have been covered separately.)

Observed Data

Now that I think of it, this might be the best kind of data that there is. If you directly observe something then that’s data that others do not have. For example, I remember reading about a startup a number of years back that was making some pretty good money taking pictures of department displays. Why? Competitors and companies that make items that go into department stores really wanted to know what was popular at that moment.

I have counseled students to get a head count on how many people went into a restaurant. Municipalities put out those strips on the road to get a count of how many vehicles pass by. Doing A/B (or multivariate) testing is another awesome source of observable data. Your company’s history is a form of observed data and, please, keep good metrics on your business; that will help you immensely.

So What?

I’m sure that there are other broad sources of data that I missed but I think you get the picture about assumptions. They are important because, like food, if you put good stuff in you will get good results and vice versa. And you need to have quality forecasts for your business so that you:

  • Make sure you have positive cash flow
  • Can plan to produce the right amount of product
  • Know where to spend money to get a good ROI on marketing
  • etc.

Forecasting is a fundamental part of any business and we were lucky to have Joel give a great talk on forecasts. But forecasting is just a part of growing a business. There are a lot of things to consider and to do it right you should have mentors to help guide you. You can find them on your own or you can work with mentors that you can find at CSUF Consulting or the CSUF Startup Incubator.

CSUF Consulting is great for clients that already have a business who are looking to improve in some fundamental way (i.e. marketing, operations, leadership, etc.). Each client is paired with a student team and a mentor who, as part of their classes, work with clients over the course of a semester to develop a comprehensive strategic plan that directly addresses some of the toughest issues or most promising opportunities that their client has.

The CSUF Startup Incubator, on the other hand, is built off of decades of entrepreneurial experience to help entrepreneurs go from concept to launch. At the beginning of a six month residency, entrepreneurs at the CSUF Startup Incubator sit down with Incubator staff and their dedicated startup coach to develop a startup plan that will position the entrepreneur for success. From that point on the team gets to work implementing that plan with the help of the entire CSUF Entrepreneurship community, which includes more than 500 subject matter experts who can be called upon to help. Oh, and residents at the CSUF Startup Incubator also get one of our CSUF Consulting teams attached to their startup to help them develop their startup plan by focusing their efforts on a critical part of the entrepreneur’s startup.

Give us a call today if you are interested in working with us, our number is (657) 278-3930. And to learn more about how to become a successful entrepreneur make sure to check out our Knowledge @ CSUF Entrepreneurship series where we have published posts and videos on topics that are important to entrepreneurs.


#CSUF

For more details on CSUF Entrepreneurship:
http://business.fullerton.edu/Center/Entrepreneurship/

For more details on how we help people become entrepreneurs:
http://business.fullerton.edu/Center/Entrepreneurship/Incubator

For more details on how CSUF Consulting can help businesses thrive:
http://business.fullerton.edu/Center/Entrepreneurship/Consulting

Attend one of our events for entrepreneurs or sign up for a free mentoring session:
http://bit.ly/CSUFEntrepreneurEvents

Knowledge @ CSUF Entrepreneurship video series:
http://bit.ly/CSUF_Knowledge

Fall 2017 Course Recommendation for CSUF: Startup Business Class for non-Business Majors

Student at WorkStarting a business is a goal for many people and not just those who major in business. In fact, many entrepreneurs did not major in business but they all needed to learn how to start a business. At Cal State Fullerton we have a class built for the specific needs of innovative non-business majors who want to start their own business: BUAD 410 – Starting and Managing a Professional Practice/Small Business.

In this class, students are walked through the process of how to create an actionable business plan for any concept they can come up with. Previous students have developed plans for:

  • An emotional skills building card game to help people overcome disabilities (which finished second in the campus-wide CSUF Business Plan Competition earlier this year!)
  • A toy store designed to engage kids with STEM-related projects and activities
  • Trend setting restaurants and pubs

The kind of businesses that students can start after taking this class are only limited by their imaginations.

What will you learn by taking BUAD 410?

Every student in this class learns the fundamentals of a business plan. This includes topics like:

  • Marketing your product or service
  • Implementing appropriate accounting principles
  • Funding your business
  • Developing a team
  • And everything else that goes into creating a successful business

And here is a video featuring testimonials from students who have previously taken this course that highlights what students can expect to learn by taking this course.

How does BUAD 410 operate?

At the beginning of the semester, every student will be asked to pitch, or give a short presentation, their concept. It’s a sixty second exercise where students will have the opportunity to explain what it is their business is and why it would make for a good venture.

From these presentations the class will decide which concepts will be pursued. Even if a student’s idea isn’t picked they will learn those invaluable skills that were outlined in the previous section through their work on the creation of a business plan for the concept that their group works on during the semester.

Once the groups have been decided it is time to get to work on creating the plans. Each team will have the benefit of working with the professor, Jeff Longshaw, as well as a mentor from the private sector. The combined experience and knowledge of the professor and the mentor helps these teams develop actionable business plans and the professor and mentor also engage with the students in a way that helps them learn and internalize the lessons from the class. Lessons that can be used to start any business a student wants.

By the end of the semester each student will have the skills and knowledge that are needed to start a business. It’s a challenging course but for those students who are interested in starting their own business but are not business majors it is a course that they should definitely take.

Who is the professor?

This course is taught by Professor Jeff Longshaw. He earned his MSBA from the USC Marshall School of Business, has been a business management and communications consultant for decades, and is an entrepreneur. He punctuates his lessons with anecdotes from his experience in the private sector as well as from his time in the armed services. These stories bring to life the difficult concepts that are taught in this class and give students a better understanding of how those lessons relate to the real world.

How do you take this class?

Enrollment for the Fall 2017 at Cal State Fullerton is still open and you have an opportunity to take this class and to take your first steps in becoming an entrepreneur. For more information on this class please contact the Center for Entrepreneurship at csufentrepreneurship@fullerton.edu for more information.


#CSUF

For more details on CSUF Entrepreneurship:
http://business.fullerton.edu/Center/Entrepreneurship/

For more details on how we help people become entrepreneurs:
http://business.fullerton.edu/Center/Entrepreneurship/Incubator

For more details on how CSUFConsulting can help businesses thrive:
http://business.fullerton.edu/Center/Entrepreneurship/Consulting

Attend one of our events for entrepreneurs or sign up for a free mentoring session:
http://bit.ly/CSUFEntrepreneurEvents

Knowledge @ CSUF Entrepreneurship video series:
http://bit.ly/csufknowledge

CSUF Entrepreneurship Mentor Publishes Book for New Entrepreneurs

170608_Chris_Trujillo_Book_(2)Most reasonable entrepreneurs know that they need to have a plan. They may spend hour after hour crafting an old-school, 100 page business plan, or at the very least they’ll write down their ultimate goal on a coffee shop napkin. When starting that plan they might pick up any self-help business book at the local bookstore or type a couple search words into Google. There is a lot of information out there. But what happens after a savvy entrepreneur, with that one of a kind idea, makes that plan? Where do they go from there?

That’s where CSUF Entrepreneurship mentor, Chris Trujillo, comes in. Chris is a serial entrepreneur and has condensed all of the lessons he has learned from launching businesses into his book, “After the Business Plan”.  So, what’s inside the book? We were able to do a quick Q&A with Chris to learn a little bit more about his book.

Who are you? Who did you write this book for?

170608_Chris_Trujillo_Book_(1)My name is Christopher John Trujillo and I have always had a passion for entrepreneurship. During college at Purdue University, I was actively involved in the university’s entrepreneurship community and co-founded a startup that received $30,000 in grant funding from a tech accelerator program in Iowa. Back home now, in California, I organize local entrepreneur meet-ups in southern Orange County and mentor entrepreneur students at Cal State Fullerton. Recently, I co-founded Entrepreneur School, www.entrepreneurschools.org, with Michael McElroy, to teach entrepreneurship to children and teens.

After publishing two children’s introduction to business books, The Young Entrepreneur and The Young Investor, I have now written “After the Business Plan” for new entrepreneurs who want answers to common startup questions. If you have finished your business plan, have a solid preparation for launch, or are just interested in learning more about business, “After the Business Plan” is the book for you.

What is After the Business Plan about?

“After the Business Plan” is not a book to help you create the perfect business plan. Nor is it a book to help you test whether you have a solid business idea. It is a book to walk you through the major steps you take to launch your business.

All successful startups must master these steps, for example: How do you hire an employee? When do you classify a worker as an independent contractor instead of an employee? Which entity is the best for your business? Where do you apply for funding? How do you record mileage for tax deductions? With this book, not only will you learn the answers to these questions, but you will also find out where to find many necessary legal documents online and discover some very helpful websites.

When will After the Business Plan be published?

“After the Business Plan” will be published June 30, 2017.

Where can people get After the Business Plan?

“After the Business Plan” will be available to purchase online through the Amazon and Lulu bookstores. Cal State Fullerton students can use the promo code TITANS to receive a discount on their purchase.

Most importantly, why did you write After the Business Plan?

I was frustrated by the lack of resources available addressing many issues that a startup faces while preparing to launch. Searching for more information than what is provided by the SBA (Small Business Administration) and state and federal government publications, I couldn’t find a comprehensive, user-friendly resource with the answers to all my questions. After consulting with attorneys and CPAs, browsing online resources and reading government publications, I realized it would be useful to condense all that I learned into a book which also includes some practical advice based on my own startup experiences. I believe that while personal experience is often the best way to learn, having accurate information beforehand can help an entrepreneur make the right decisions while preparing for launch. Since business law differs for each state and may be revised often, I plan to publish “After the Business Plan” for every state with annual updates. I advise aspiring entrepreneurs to just work on your idea every day, even if only for 20 minutes, and you’ll be amazed at how quickly an idea can transform into reality.


We are definitely looking forward to the publication of this tremendous research and we are always looking to add innovative entrepreneurs and professionals to the CSUF Entrepreneurship community. To find out how you can participate in this community as a mentor, speaker, or even as a donor please give Entrepreneur in Residence Travis Lindsay a call at (657) 278-3930.


#CSUF

For more details on CSUF Entrepreneurship:
http://business.fullerton.edu/Center/Entrepreneurship/

For more details on how we help people become entrepreneurs:
http://business.fullerton.edu/Center/Entrepreneurship/Incubator

For more details on how CSUF Consulting can help businesses thrive:
http://business.fullerton.edu/Center/Entrepreneurship/Consulting

Attend one of our events for entrepreneurs or sign up for a free mentoring session:
http://bit.ly/CSUFEntrepreneurEvents

Knowledge @ CSUF Entrepreneurship video series:
http://bit.ly/csufknowledge

CSUF Entrepreneurship Students Create Business Plan, Present to Investor Panel

piano-with-jonnyThe panel is awesome – I love that as students, we have the chance to present real ideas to real business owners, entrepreneurs, investors, and bankers.  Few other classes offer the practical feedback and hands-on work that I have experienced in Management 465A.  It is one of the best Entrepreneurship classes, and I highly recommend it to other students.

Those are some of the thoughts from Jonny May, the creator of Piano with Jonny and one of our CSUF Entrepreneurship students who had the opportunity to give a fifteen minute presentation to a panel of experts on the progress they have made in launching their businesses followed by fifteen minutes of hard hitting questions from those same experts. As you can guess, this is a pressure packed experience but it is also a unique opportunity to get feedback from a diverse group of experts.

But let me take a step back since these panels are the culmination of a semester’s worth of work on the part of CSUF Entrepreneurship students.

At the beginning of every semester, students in Management 465A and 465B coalesce into teams with the mission of either creating a business plan for a concept (465A) or work on launching a business (465B). In Jonny’s case, he is a student in Management 465A and he led his team in the creation of a business plan for his concept: Piano with Jonny. (And, to be perfectly honest, Jonny’s team had a bit of a head start since Jonny has been working on this business for a couple of years now and is already in revenue. But, as you will see, Jonny has leveraged his experience in this class to crystallize his business’ strategy and develop a plan to make his business stronger and well positioned for growth.)

If I could show you a montage right now, I would, because in between the formation of the teams at the beginning of the semester and the panels at the end there is a lot of hard work that largely goes uncelebrated. It is during the semester that the teams work on developing their marketing strategy, interviewing customers to unearth key insights into their thinking, put together an operations plan with a budget, and do all of the other work that is necessary to craft a meaningful business plan that can be used to launch or grow a business and maybe even using the plan when in discussions with potential investors.

And it is this hard work that helps students get to the heart of the matter for their businesses. From Jonny: “The class has forced me to think more deeply about why our customers buy and where to put more of our efforts.  Through customer interviews and competitive analysis, it is now much more clear where we are not being effective and where we can add huge value for our customers.”

The panels that we have already talked about a little are the culmination of all this hard work. Over the course of the three months that make up a semester, many students, including Jonny, dedicate 100+ hours to the completion of their project whether that is the creation of a business plan or work on launching a business. In Jonny’s case, it was a little of both.

The panels are no small matter. As Jonny said at the beginning of this article, we make sure to pick some heavy hitters to be judges. At the most basic level, these panels represent a crucial academic event for our students; having the opportunity to present such a complex and important project is nerve racking for the students but they pretty much always rise to the occasion.

Jack Mixner, one of our professors teaching this class, puts it this way: “Preparing to present to real investors is challenging, daunting – and  exciting. The preparation pays off. Presentations evolve quickly into unexpectedly high level conversations between ‘entrepreneurs’ and ‘investors.’ Students share. They learn. And the investors? They share, too, with sometimes very unexpected and useful points of view that the students, their mentors – and their professors – had not expected. Everybody wins.”

But for students like Jonny who are leveraging this unique academic experience to create something real and hopefully long lasting the panels can represent a crucial turning point in the success of their ventures.

“[The panel] was very helpful – I had to learn how to sell my business and ‘take the heat’ from experts.  I knew they would ask hard questions, so I really had to become familiar with my business in a way I never have.  I learned that we have a highly scaleable business and that we should be charging more for our products,” said Jonny.

We are obviously very proud of the work that Jonny and his team, which includes fellow CSUF Entrepreneurship students Sylvia Dang, Johnny Pen, and Reuben Ponce De Leon and mentor Craig Martyn have done. And the same is true for all of our other teams in these classes. Most will not end in successfully launched business but the experience of trying is invaluable and will certainly help them in all their future endeavors.

And in Jonny’s case, we are looking forward to not only working with him as a student but also as a Resident at the CSUF Startup Incubator. Jonny was accepted into the Incubator just a few days ago because we see a great deal of potential in his business and we believe he’s the kind of entrepreneur that has the capability and drive to make his startup into a sustainable business. We will be working closely with him in the classroom and at the Incubator over the next six months and by the end of that time we believe Jonny will be well on his way towards taking Piano with Jonny to the next level.

Stay tuned!


#CSUFEntrepreneur #CSUFStartup

Become a CSUF Entrepreneurship Insider to keep up-to-date on all the events, news, and everything else we do: http://bit.ly/CSUFStartupSignup

For more details on CSUF Entrepreneurship: http://bit.ly/CSUFEntrepreneurship

For more details on how we help people become entrepreneurs: http://bit.ly/csufstartup

Attend one of our entrepreneur events or sign up for a free mentoring session: http://bit.ly/CSUFEntrepreneurEvents

CSUF Course Recommendation for non-Business Majors Interested in Starting their own Business

student-at-workNot every entrepreneur is a business major; far from it actually. But the reality is that without some basic entrepreneurial skills it is extremely difficult to successfully launch a business. What should a CSUF student who is not majoring in business but wants to start a company do?

Those intrepid students should take BUAD 410 Starting and Managing a Professional Practice/Small Business. This course is designed to help these students develop the skills needed to go from business concept to launch. Over the course of the semester, students in this class are guided through the process of developing an actionable business plan by the professor, Jeff Longshaw, and a mentor who has a wealth of experience as an entrepreneur or professional.

Recently, Center for Entrepreneurship Director John Bradley Jackson gave an interview about the importance of this class to non-business majors at Cal State Fullerton:

Professor John Bradley Jackson, director of the Center of Entrepreneurship at California State University’s Mihaylo College of Business and Economics, said he noticed a trend of recent graduates working as independent consultants instead of heading right into entry-level jobs.

“The transition for the college graduate to the workforce isn’t what it used to be,” Jackson said, but added that “entrepreneurship is a way of thinking—trying to make the planet better through small changes—and that type of mindset is perfect for the gig economy.”

From Physics to Fashion to Photography

The entrepreneurship class at California State University at [sic] Fullerton challenges students to come up with business plans, assigns them mentors and divides them into teams to develop business models. Near the end of the class, students present their models to a panel of investors who give them feedback on their work.

Jackson said that students from a diverse array of majors bring a host of helpful skills and talents to the class. The class’ success stories included a master’s level physics student who used her science background as well as what she learned in the entrepreneurship class to open a pop-up toy store that encourages customers to experiment with educational toys— including, of course, science toys—before committing to a purchase.

The student discussed in that quote is Iris Dorne who recently launched Rad Toy Store where she sells STEM-themed toys to kids. Here is an excellent write up of Iris.

Students in this class will learn about:

  • How to Craft a Business Concept
  • How to Develop a Business Plan
  • Legal Issues
  • Marketing a Small Business
  • Finance
  • Tax Issues
  • Managing Risk

Many students who have taken this class have had great things to say about the immersive learning experience offered by this class.

If you are looking for a class that can open up a brand new horizon for your career then you should seriously consider taking BUAD 410 during the upcoming semester!


#CSUF

For more details on CSUF Entrepreneurship:
http://business.fullerton.edu/Center/Entrepreneurship/

For more details on how we help people become entrepreneurs:
http://business.fullerton.edu/Center/Entrepreneurship/Incubator

For more details on how CSUFConsulting can help businesses thrive:
http://business.fullerton.edu/Center/Entrepreneurship/Consulting

Attend one of our events for entrepreneurs or sign up for a free mentoring session:
http://bit.ly/CSUFEntrepreneurEvents

Knowledge @ CSUF Entrepreneurship video series:
http://bit.ly/csufknowledge

 

Business Plan Competition 1st Boot Camp on January 15, 2014

“Business Plan Competition
1st Boot Camp”
SGMH 1307, 1:00 – 3:00pm
January 15, 2014

The purpose of the Business Plan Competition is to promote entrepreneurship amongst CSUF students from every college. No prior business plan writing experience is needed; all the information you will need to compete will be discussed at the Boot Camps or can be found here. For more resources to help you with the CSUF Business Plan Competition please go here.

Since the inaugural year of the CSUF Business Plan Competition we have seen a wide variety of business ideas make it to the finals. Whether your idea is a barbershop or a tech company your idea has the ability to go far in our competition if you make a compelling enough case for its success.

If you are interested in this competition please sign up for our CSUF Business Plan Competition Newsletter so that you will be kept up-to-date on all the latest information.

Perfecting Your Elevator Pitch – TCVN Event

Our friends at the Tech Coast Venture Network are hosting an event to help people perfect their elevator pitches in preparation for their Survivor 8 competition. The preparatory event will be held on Thursday, October 17, 2013 from 8:00am to 10:00am at the following location:

Haynes and Boone, LLP
18100 Von Karman Avenue
#750
Irvine, CA 92612

If you are a CSUF student and would like to attend this event please email Travis at tlindsay@fullerton.edu and I will get you comped for this important event. Details below:

Perfecting Your Elevator Pitch:

How to win $25K @ Survivor 8 On November 8th

Click image to go to event page

Learn the effective techniques needed to create a winning “Elevator Pitch” to win it all at our upcoming November 8th 2013 Survivor event. This pitch will also be helpful to raise money for outside early stage investment scenarios.

We will have a contest for all participants to have their pitch reviewed by a group of serial entrepreneurs and TCVN board members. One winner will get a free ticket to Survivor 2013!

Why is this important regardless of how much money you’re raising? 

The first thing every investor wants to hear is your elevator pitch. Without it; you will likely not get the right attention to get you capital.

Host Workshop :

Ash Kumra (Chairman of TCVN & DreamItAlive.com Co-Founder)

You can also click this image to go to the event page

Ash Kumra is an award winning entrepreneur, author and public speaker recognized twice by the White House as an entrepreneur making an impact. Ash is currently co-founder of DreamItAlive.com; an online community empowering users to achieve dreams in all areas of life using Dreamboards, visualization, community, helpful products & content.
Ash is also a public speaker specializing conscious entrepreneurship, law of attraction & social media. Ash has also spoken to over 10,000 people on entrepreneurship, social media and branding for many colleges, institutions, and organizations including the White House & TEDX.

In 2006; Ash co-founded digital content distribution agency DesiYou; the 2010 recipient for “Best Digital Media” company by the Irvine Entrepreneur Forum.

Register Today!