Article of the Day
How to Avoid the 6 Biggest Financial Mistakes Young Entrepreneurs Make – Inc.
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Money is like gasoline during a road trip. You don’t want to run out of gas on your trip, but you’re not doing a tour of gas stations.
~ Tim O’Reilly, founder and CEO O’Reilly Media
The Financial Role of the Entrepreneur
What is the core role of the entrepreneur? To invent? To innovate? To take risks? To change markets, industries, the world?
The role of the entrepreneur can be explained in part by any of these descriptions, but it still misses the core. Why? Because there is a financial role and responsibility of the entrepreneur that wraps around the products, services, and innovations they bring to the world.
The first financial role of the entrepreneur is to define and forge a pathway to cash flow positive for a new business. If an organization can’t find its way to positive cash flow then it’s not sustainable and not a business. Every year there are thousands of good ideas and inventions that never find their way to market because they aren’t part of a business that finds its way to a sustainable financial model.
Startup Financial Pathway
Most, if not all, startups will have a period where expenses outweigh revenues. It may be part of product development, product launch, market penetration, organization building, capital expenditure, or be a combination of each. The burden of the entrepreneur is to find a means of getting through that startup phase to where the business is cash flow neutral. The means could be bootstrapping, debt capital, or equity capital or a combination of the three.
The second financial, and core, role of the entrepreneur is to build enterprise value. The entrepreneur needs to focus on how to make the business worth more at the end of the year than it was at the beginning.
And from where does enterprise value arise? In the startup phase of a business, enterprise value (a financial measure) can come from non-financial sources. For example:
- A strong team devoted to starting the business
- A successful prototype
- A key partnership
- Progress in research and development
- Success in product trials
- Execution of project
- Overcoming regulatory hurdles
Long-term, enterprise value arises from the business’ ability to produce cash above and beyond operating expenses. In agriculture we often think of the value of a business in terms of its asset value. The value of a farm business is often thought of as the sum of its equipment and land.
Not all assets are created equal, however. Those assets that have the ability or promise to produce more cash income per dollar of asset are the most valuable.
Why do financial analysts value businesses based on free cash flow? Why do business valuation discussion drop acronyms such as EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)? Because a business’ capacity to produce cash excesses represents its enterprise value over the long term.
A simple case in enterprise value is to compare two auto companies, GM and Tesla.
. General Motors Tesla Motors
Revenue $152.4 billion $4.1 billion
EBITDA $13.7 billion -$294 million
Market Cap $48.1 billion $33.6 billion
GM has almost 40 times more revenue than Tesla and makes billions in profits, yet the market values it only 40 percent higher than Tesla, a business yet to make a profit. Why? Because the market/investors think that Tesla’s long term ability to produce cash above expenses is very good. The company only makes a fraction of the cars that GM does, but investors’ money is bet on a much bigger, financially successful future. In a nutshell, investors have a strong faith in CEO Elon Musk‘s ability to continue to build enterprise value.
How do you describe the pathway of your business to cash flow positive? How do you build enterprise value in your business over the long-term?
April 18, 2016 at 3:47 pm
Davide Cavallini
With Stonevolution, our big concern is our assets, our cost of setting up the facility and the raw materials. We have to upfront high costs before actually being able to produce and sell our products.
We tought about a vertical integration with one of our suppliers and this will considerably reduce costs. The markup we apply allows us to have higher revenues, but they will have to bu funded by investors, who will procide capital in order to face the initial costs
April 18, 2016 at 3:47 pm
We plan on building enterprise by first research and development and then keeping a steady flow from there. Once we have a successful prototype that can lead us to successfully executing our product and trials. At this point, we know positive cash flow is critical to starting our business. With a goal-oriented team who strives to get better a business can flourish. It starts there and then if you incorporate some of the things I explained above, you can be in a position to end the year with more money than you did before.
April 18, 2016 at 4:12 pm
Grant Vanderlinden
Working with Grand Tasting Beef, reaching positive cash flows will be much easier than a traditional startup. This is due to the fact that the startup business is beginning with a “one-up”: costs for the initial cattle will be absorbed by the existing rancher. This overcomes a massive amount of necessary capital to begin production. However, other expenses such as corn feed, slaughtering costs, and labor costs will still likely lead to negative cash flows initially due to a lack of beginning cash. To offset the “red” that these expenses would mark in the financial statements, a potential equity investor is already being negotiated with and debt from the Coalition to Support Iowa’s Farmers is being considered. In the long-term, positive cash flows will be generated naturally from sales as well as equity investments due to the high amount of enterprise value that will be acquired from the positive trends. Critical trends include: increased demand for organic beef, all-natural beef, local food, and food with a marketable story.
April 18, 2016 at 5:20 pm
At Cattle for Rent, we will have a lot of assets and facilities already paid for, so our main concern is spending our money wisely and not foolishly in order to get a positive cash flow. Our relationship with Trans Ova will be huge in order for us to get a list of customers in order to start our path to a successful business. We need to get a nutritionist and vet on staff and a few other employees to get this operation going, and we need to make sure we keep a good eye on the cattle to make sure we can have an increased success rate and survival rate among the cattle in our operation. Our long term goal would be to get all of the cattle owned by Cattle for Rent to have embryos in them to get a calf crop and try to increase our success rate with Embryo Transfer as much as possible. Our other goal is to produce quality calves in order to maintain our good names. We would also like to expand our operation (land and cattle) if we are given the opportunity.
April 18, 2016 at 7:11 pm
With Bread Crumbs we have somewhat of an advantage when it comes to initial capital. Our product doesn’t have a lot of start up cost, no storage, and a split marketing cost. We will need to have a small but talented team of at least one engineer, designer, and product development witch will be a sizeable amount of our cost. Along with this we will be subject to a fair amount of product testing that can be an expensive and lengthy process. In our business model I think it is fair to say that it is more about the ability to hold onto capital vs. acquiring a lot of it. Another benefit to our business is the option to expand into other markets. So for Bread Crumbs we have discovered both our niche market as well as our expansion options witch is something I feel is a huge benefit when considering options for building revenue.
April 18, 2016 at 9:12 pm
With our company Pure Pork, we have had the pleasure of seeing financial statements and records that will resemble something like ours and we can build off them and rely on them for reference. It is also important to consider all the variables that can go wrong and be prepared to have a back up plan so one crisis doesn’t create your ultimate demise. Having the proper financial backing whether in savings or borring is also of the upmost importance to create sustainability.
April 18, 2016 at 9:37 pm
With EquiSpection-Rx, I feel like success as a company would depend on a few huge sales such as with the American Jockey-Club so during development our expenses would heavily outweigh our revenue and would stay that way until a big sale where the chip would hopefully become a standard in the industry.
Now to raise enterprise value We would need to continue in research and development and getting a working prototype to show consumers. We could also partner with a leading microchip company which would give us some leverage as well.
April 18, 2016 at 9:38 pm
With Accu Paint our biggest problem getting started will be to convince the customer that our product is worth buying and will be of most value to them of all the other products that they already have. Once we can convince our first few customers and get them on board, by word of mouth and trade shows our sales will take off from there. We will create value down the road by constantly innovating and improving our product and looking for the “next biggest thing” in our industry and go out there and be the ones to create it. We may fail a few dozen times but its worth the attempt.
April 18, 2016 at 10:15 pm
In the early stages of Hired Man, initial cost will have to be kept at a minimum since it will require interviewing and testing of employees before any actual revenue comes in. The initial costs will be quite high with the leasing of equipment, building headquarters and also employee payment. Surviving these initial costs can be achieved with investor payments as well as borrowing equipment to get started. Using the investments wisely on a lot of advertisement and promotion will help draw customers and in turn, produce positive incomes. Building value over time will be easy if we can retain long term customers. Keeping them satisfied with the employees Hired Man introduces to them and gaining more customers along the way makes equipment and advertising purchasing much easier.
April 18, 2016 at 11:24 pm
Bovi-Nurse will be able to build positive cash flows by making sales to local vet clinics to make the product available to consumers. By making one sale to a distributor it will be a more efficient use of our time because it will allow us to reach customers quicker. Additionally, we will by creating testimonials from trials of products from creditable producers we will be able to gain larger sales figures. Enterprise value that we currently have in our favor is talented and dedicated team. In the future we will continue to create value through our research and development and our product prototype.
April 19, 2016 at 9:05 am
At New Age Commodities our company doesn’t necessarily have a lot of start-up cost. However, our biggest concern is that there are other companies out like very similar to ours, so we need to set ours out there. This will allow customers to come on board and then our cash flows will hopefully start rising. We will build our enterprise value down the road once out customers are on board with our company.
April 19, 2016 at 9:14 am
Globe-wool will begin with a lot of asset costs as we will have to purchase tools for the women to turn raw fiber into a product as well as the cost of sending an educator to the determined country to teach the women. This could take a week easily. However, wool products can be sold for a higher price as the value of the wool is high and it is a high quality fiber. We have a strong partnership with the National Angora Rabbit Breeders club and this will be beneficial when it comes to marketing our target audience and potential wool donors. Several breeders who have no use for the fiber are willing to donate their wool as long as they are given some credit. This can be done on the Globe-wool website. We will begin with a lot of costs to obtain assets, but once sales begin we will be able to cover them with the high demand for angora wool products.
April 19, 2016 at 11:27 am
Similar to many other start-ups, Step-EZ will have a large amount of initial costs to start the business. These include manufacturing costs and obtaining facilities. Through progressive research and development, Sam and I will look forward to developing the product to be more efficient and to better meet customer needs/demands to increase enterprise value. Enterprise value for Step-EZ will also be increased through developed partnerships with implement dealers who would sell the product to the customers.
-Tyler Rau
April 19, 2016 at 11:36 am
Lucas Keller
For our business, Rocky Ridge Orchard & Vineyard, our positive cash flow will not occur until 5+ years after establishment. This is because it will take several years for the apple trees and grape vines to reach maturity and produce a full harvest. Once the plants reach maturity, revenues will then begin to increase, and expenses will be able to be paid off. Over the long run, we will build value in our enterprise by working hard and providing high quality products and services to customers. Those products/services include apples, ciders, wines, agritourism, etc. Due to the high, and increasing demand for locally grown products, as well as customer interest in agritourism, we will be able to capitalize on those demands and turn them into profits. After the main costs of establishment are incurred, maintaining and managing the property will be much less costly. Also, creating higher quality products will allow for us to set higher-than-market prices.
April 19, 2016 at 11:56 am
Tim Mackey
How do you describe the pathway of your business to cash flow positive? How do you build enterprise value in your business over the long-term?
Since I am selling a product, I have to buy materials and have a manufacturer put them together for the final product. I also need packaging for the product before selling it to customers. Because of these items, I will start out in the negative and the only way to get me out of the negative is through sales of my product. In order to obtain a positive cash flow, I need to position my margins correctly. Ideally I can make enough on each pair to obviously cover my costs but gain enough capital to slowly ramp up production as supply rises as well. To ensure my business can build value over the long term I would continuously have to make sales. In order to do that, I anticipate continuously improving upon my product to beat out competitors and keep customers coming back.
April 19, 2016 at 12:47 pm
In a nutshell, the pathway to positive cash flow for McKinnie Hemp Co. revolves around finding those feral cultivars. Without those, we have nothing. We need to get genetic mapping done to see what kind of qualities our cultivars have so we can proceed to the next step of combining it with other strains or moving to seed production. I see the company building enterprise value based off non-financial sources to begin with. Getting those key partnerships and working on developing prototypes will be the start. Progress on cultivar research and the beginning of product trials will follow. Another major enterprise valuation will be the full legalization of hemp. Looking at the long-term enterprise value, we need to determine what percentage of the hemp market will we be able to supply seed to. Once that is established, we will work on building the brand and customer base to increase that percentage.
April 19, 2016 at 12:49 pm
For Trucker Tracker, I think that there are more than one possible ways to describe the pathway for cash flow. Once we get the final prototype made up and it is designed to our standards and how we want it, we will begin sales. Before we can start sales, we will have to spend money to get the product/service up and running and pay our bills. After, we will then have to do some research and marketing to get the word out about Trucker Tracker. Once we have established all of the above things, we will be able to start selling the app to users. Once we pay back all of our bills that we have from starting up, we will be able to start to see positive cash flow.
April 19, 2016 at 12:53 pm
Never run out of cash is what I’ve herd a numerous amount of times and it is very true. With Ghost Fence, our company will be short in cash during the initial start up. Just about like every new entrepreneur would be during their start up. Outside investors would be crucial to our start up cash flow needs. Just like comparing General Motors to Tesla in market value, I feel like barbed wire fence and Ghost fence would be a similar situation. Ghost Fence might have a good revenue and have a negative dollar amount after EBITDA. Ghost Fence could have a similar market value to barbed wire fence, because the long term potential could be greater than just barbed wire fence
April 19, 2016 at 1:36 pm
Me and my business partner Corly will arise our business value basing on 3 main pillars: strong commitment of both of us in building the business, partnership with some Iowa State University professors and trials for farmers, that in our opinion will be amazed by the efficiency of our app, they will really appreciate the time saving. Therefore the investors will be willing to invest more in our company, our success will convince them and we will never run out of cash. Obviously of share of ownership will be in this way reduced, but it is better to own a little piece of a big cake rather then a big piece of 0.
April 19, 2016 at 5:10 pm
No-Scoop will create business by moving product we will generate lots of income this way. In the Ag Industry I see us not having any problem moving product or ever running out of possible people to sell to. We will also be servicing the product we sell which will help. It can be very profitable being an in house business. I do not want to have to deal with a bunch of investors and dealers and everything. I do not like answering to other people. This will be a good business.
April 19, 2016 at 5:53 pm
T&K Nielsen Farms has already started it’s path toward financial success. By using equipment that the company has already purchased, this will help us offset some of our start up costs. The machinery and equipment was originally purchased for personal use. Additional finances that the business may need will be obtained from loans from our local bank. We will try to refrain from having outside investors. I beileve that we need to keep machinery for a while in order to be as profitable as possible.
April 19, 2016 at 7:14 pm
Our largest cost flow at the beginning will be in initial development of our product in order to build a prototype since it could possibly be an expensive feat. Once established and successful, the enterprise should grow fairly quickly and efficiently. The initial expenses are in materials (steel, welding supplies, conveyors, storage bins) as well as in labor including a welder and the manufacturing work. To gain someones trust in order to build a dry system and test on someones property may also take some money. If we were able to pitch our idea effectively and project how much it would take to make the successful, working prototype in order to model it and show it off to other potential customers.
April 19, 2016 at 7:16 pm
My business of shrimp farming is not an easy business to generate start-up cash. Many investors deem a new business like mine as higher risk, due to that the finical model is relatively new. For shrimp farms getting start-up cash will have to come from a small pool of investors that share the same ideas and goals that I have. Family members may be a good place to start. Once the capital is raised the race to become cash flow neutral will be relatively easier. Before production has even started letters of intent will be needed in order to properly gage the amount of shrimp that is needed to be produced. The cash will not necessary be up front, but will be contracted to be payed when the product is delivered. Hopefully long term value will be given in the satisfaction of the product.
April 19, 2016 at 8:38 pm
Artisan Farm Hub will become cash flow positive through increased meat sales with time, followed by more farmer relationships to reach full capacity for our slaughter services. Our cash flow story will also be built around our unique marketing strategies for “delicacies.” Initial enterprise value will come from breaking through the regulatory hurdles of an MSU in Iowa. Moving forward, the relationships with farmers will be a huge value. There will also be value in proving the model and showing the ability to expand regionally.
April 19, 2016 at 9:19 pm
New Age Commodities will most likely become cash flow positive after the first year of commissions and brokerage fees are collected. I say this with confidence because there very few expenses relative to the potential profits that the company can produce. Over time, with more farmers hedging their grain with us, we will collect more commissions. With more investor capital in our trading account we will be able to have larger gains and in turn more profits through our commissions on gains. It takes less than $25,000 to start the business, and the first year projected profits well more than triple that number. The key will be gaining customer confidence, clients, and trading capital as fast as we can in order to pay for our initial investment very quickly.
April 19, 2016 at 9:22 pm
The pathway to cash flow positive for Trucker Trackers involves gaining enough downloads to offset the costs it takes to design and develop the app. To get the app up and running we must gain investors to pay the website to create the app. Once it gets released and companies begin to use it we will gain the capital that we need to continue to improve the app. That is how we will build enterprise value for our business in the future, by using the money we get from downloads to make it even better for our customers in the hopes that they tell their friends and we get more downloads.
April 19, 2016 at 10:56 pm
At Sound Link Helmets, I think our biggest concern will be the up front investment purchases that we have to make on manufacturing equipment. Obtaining customers should remain simple as long as we can keep the price of our helmets in a reasonable range. I expect our business to go through a slower transition from startup to profit, but we can definitely get there. With a market that may limit possible sales, being as efficient as possible could make the difference between success and bankruptcy.
April 19, 2016 at 10:56 pm
I have a feeling that Heartland BioPlastics will have higher expenses than revenues for the next 10 years. However, in our 10 year plan, we do not actually build the plant producing PET until around year 7, so that is to be expected. We want to spend as much time as we can nurturing the relationships that need to form on both the sourcing and the sale sides so that we can spend as little time as possible on the left side of the teeter-totter.
April 20, 2016 at 10:33 am
With Voss Construction and Tiling I plan to start the company out small, and grow as time goes on. Right now I am at the mercy of commodity prices, and most farmers are not wanting to put in tile like they did a few years ago. I project in the next few years things will get better and farmers will be willing to makes changes to their farm. The beauty of tiling is the rate of return is very fast. So even in a bad year I truly believe I can turn a profit. I first need to pay off the loan for the equipment before I can keep cash on hand.
I plan to build value by the service I perform, and the quality of my work.
April 20, 2016 at 11:06 am
At Rain Landscaping it will take some debt for us to reach cash positive. We will have to by the equipment and materials to construct our products as we are starting with absolutely nothing. Once we get a few products sold we can then start to decrease our debt. We plan to be increasing sales year in and year out. This will help us increase our revenue. Most of our costs will be initial and then will be covered by the price we are selling the product for. We will also build value by the way we conduct ourselves towards our customers and the quality work we do.
April 20, 2016 at 4:17 pm
Rocky Ridge Orchard and Vineyard will take a few years to cash flow positive because of the high start-up cost. Like any farming operation it will be extremely expensive to get started, but once the operation is started the cash flow should not be an issue. In the early years we will seed some of our unused land to annual crops to get revenue off of. Then once the operation starts to grow we will convert the annual crops into perennial crops like apple and grapes. We will build enterprise value by creating a brand that has value to customers. Like Nike for example, what is the swoosh worth? Can anyone put a value on that little symbol? Hopefully as time progresses and we build our brand a monetary value will come a long with it. Rocky Ridge will also accumulate assets such as equipment and land that will be worth money in the future.
April 20, 2016 at 4:21 pm
Our pathway is going involve a lot of ups and downs. Mainly in part that we are selling a product with little market history. I think the best way for us to build a cash flow will be though bootstrapping and angel investors as this allows us to maintain a strong hold of shares in our business’ youth stages. We need to establish our brand to be better than others to gain the investors trust to release equity capital we need to build our business into a bigger company and be able to compete at a bigger market level of course only after we have grown enough to gauge our business’ market value. The strengths our business has as a startup will be R&D that leads into our strong prototype helping us get the successful consumer trials we need to add critical trust. I think the partnership Trey and I have formed is helpful in gaining trust of investors also. The biggest concern I have with using equity as a major source of cash flow is giving away shares early on in a shared company.
April 20, 2016 at 4:34 pm
Elite Self-Storage is unique because the facility itself is a large portion of the asset. Historically, the actual land and location is 30%-40% of the value on self-storage facilities (assuming they are operating near 80%+ capacity). This means the pathway to cash-flow positive comes from filling up units as soon as possible for the maximum allowed price. The positive trend comes from longer term contracts and customers.
By using all income to pay down debt as rapidly as possible, the long term value grows as the debt becomes reduced. This in a sense means that when one location becomes paid/near paid off, it is able to be leveraged for expansion. As these locations and businesses grow, they become of greater value as a package because their combined income/leverage can be used together.
April 20, 2016 at 4:39 pm
With Cattle For Rent, we already have many of our assets and supplies that we will need. However, if we would like to meet maximum efficiency there are a few things that we could purchase to help us. A few of these things would include a tub and alley system so that we are able to move cattle through more quickly. Another piece of equipment that we could get to maximize efficiency would be a skid loader and a feeding wagon. Most importantly, we could improve our calving barn and facilities because the calves are the most important part of our business. We could go through local Ag-Lenders to get capital or we could ask Trans Ova Genetics if they wanted to be an investor in our business along with the relationship we form with them. When we begin to grow our business, we will need to raise more capital so that we can purchase more land and cattle. As we get more land and cattle, we may need to improve our facilities and equipment so that we can maximize our efficiency to the fullest.
April 21, 2016 at 10:22 am
Blue Mountain Shrimp Co. is a tricky business to produce financials. Having no assets, supplies, or money the starting figures are quite pricey. I think this is where having a devoted team working n a start-up is one of the most important factors in being successful. If your team is not devoted and driven to have your business succeed it can cause issues and have a negative effect on your revenues and your donor participation. When people buy your product they are also buying what your business and team stand for. Having non-motivated people can greatly influence how customers view your company especially when you are a start-up business.
April 21, 2016 at 10:35 am
Voss Construction and Tiling will start out small and grow throughout the years. Starting out for this business we will be paying off the loans that were obtained for the tile machine and other equipment that we need. After some time goes by we will be getting more jobs. This will make our business have a positive cash flow. Voss Construction and Tiling will build value over time by having quality work and leaving our customers satisfied.
April 21, 2016 at 12:35 pm
With PurePork, we somewhat have a little advantage with who we picked as our supplier and market. Niman actually accounts for our business to use a creditor and accounts for interest and payments in their market value prices. This allows us to maintain a fixed profit margin even with loan repayments. To then build a larger enterprise value we will invest to vertically integrate or process, from feed to farrowing, we can cut our costs and increase our margins as time goes on.
April 21, 2016 at 12:45 pm
With Tolliver Lawn Care & Snow Removal. We plan on starting out small by purchasing one machine with all of the attachments, and lawn care equipment, and gradually building the business throughout the years. Starting out, we will obtain quite a bit of debt due to lawn care equipment purchases. After some time goes by, we will be getting more clients, and more business, which will lead our business to positive cash flow. Tolliver Lawn Care & Snow Removal will build value over time by providing professional quality at an affordable price.
April 21, 2016 at 5:06 pm
Globe Wool will start out by building a solid relationship with women in developing countries. We will then find a good customer base here to by contacting friends and family. Once we start building a reputation with our quality products then we will create a positive cash flow. After we build our business then we can start expanding into other countries then building more of a customer base. We should be staring to gain a cash with in the first year.
April 21, 2016 at 8:25 pm
Crescent Hill Farm will have a lot of expenses in the beginning because the venue will have to be built. The cost of the barn is fairly expensive so it is a matter of gaining investors to help fund the cost of the building. Being that there are not many venues in the area where Crescent Hill Farm will be located, we predict that 60% of weekends can be booked within the first year. There is a demand in the area for venues so bringing in a customer basis should not be an issue for the business.
April 21, 2016 at 9:32 pm
At TG Blinds, our expenses will be high in the beginning because we would need to purchase our materials needed to make the blind. We would need a warehouse of some sort because we have quite a bit of storage. I didn’t think at first we’d need a warehouse, but after you think about it there’s a lot of materials we have to store. Starting out will be the hardest just making a name of ourselves. Trials would be one way to create customers. Maybe even have a “Lucky Winner” on social media to help get our name out there, but also create attention. The thing about our business is that we should only need one warehouse unless we have great success and turn to retail. If we went retail our warehouse would have to increase in size. I wouldn’t say there’s a demand for our product, but I feel as if customers could love our product.
April 21, 2016 at 9:49 pm
Step-EZ will have a high amount of expenses in the beginning for product development. Manufacturing will be our biggest cost at the beginning. As we get a prototype we can start marketing and selling our product to start bringing in money. As we begin making sales, we will look to expand facilities and employees to make even more sales to bring in revenue. Our goal will be to build customer relationships early and get a spot in the market. This will happen overtime and customer feedback will help us improve the product and expand into new markets.
April 21, 2016 at 11:41 pm
Dietz One Pass will have a pretty high amount of expenses right away. Even though Drew does own a bar right now and is using his fathers tractor for just putting anhydrous on, when we would make the switch to put on p&k and cover crops the parts to make that work would be high. Along with the electronics and gps that would have to go along with it also. The biggest thing that may hurt us would be that our business only runs part of the year. That is why we look forward to expanding to many acres to be a big part of our earnings. It will take a good amount of time to pay off our equipment but that is the main expense, other than parts, fuel, and labor. Since our business is a custom service we lay it down and leave the rest of the farming/harvesting, etc. to the farmer. To expand we would look into being in touch and on good terms with coops around the area to get our name out. Within our first full year doing this specific service, we would want as much feedback about how the products worked together as much as possible, so we can expand from there.
April 22, 2016 at 9:58 am
With Stock Shepherd, we will first do research trials to make sure our product has plenty of backing so producers will buy the product. We will also make sure our prototype is in perfect shape for customers to try, I think this will be the largest expense. Then in order to keep building our enterprise value over time we will use customer feedback and make our product better than every before.
April 22, 2016 at 10:58 am
At The Farmers Marketers our biggest issue is not that our startup cost are high but that it might take time for a substantial cash flow to come in. In order for The Farmers Marketers to be successful we need to invest in technology that is extremely reliable because our whole business is web based, we might also have to provide free trials that will cost us the expense of time and salary, but in order for The Farmers Marketers to establish long term success, customer acquisition and developing a great reputation is more important than short term cash flows.
April 22, 2016 at 11:15 am
At The Farmer’s Kitchen, our main start up costs will include the building/location of the actual restaurant, labor, and the food. These will be moderate to expensive start up costs, depending on how much we want to spend on the building and how close we are able to source our food to work with. We will work towards cash flow positive by continuously incorporating new aspects of our business such as making take home meals for families to enjoy at home and also increasing our sales of meals served by 30% within the first year of business and thereafter as well. I think the key aspect for building value in the long term will be keeping it new and fresh. With a restaurant you cannot patten an idea, so people can easily copy you and as the trends go towards more local food and knowing where your food comes from there is bound to be more restaurants like ours popping up all over to meet demand.
April 22, 2016 at 11:30 am
The big way for Ag Realities to build enterprise value is going to be largely based on the relationships that are built with both the universities where Ag Realities markets its trips as well as the farms and businesses that are toured on the trips. With solid relationships, Ag Realities will be able to continue to offer varied interesting and educational trips. In order to make a positive cash flow, start up capital will need to be gather, this will be done mostly through investors. In addition by working part time for Ag Realities the founders will not need as much monetary compensation for the time invested. This will help to keep the cash flow positive until the revenues have increased enough to support full time employees.
April 22, 2016 at 12:12 pm
The biggest way my company will have positive cash flow is with the beef sales. We want to add the tourism to the beef company to bring in more revenue. Once the tourism starts we will be able to make more money and we can put that money towards feed and maintenance costs of the cattle. As for enterprise value, in the long run, we just need to continue feeding our cattle and making sales.
April 22, 2016 at 1:38 pm
Getting Crescent Hill Farm to cash flow positive will require the development of good relationships with many people: clients, wedding planners, the community, as well as other local businesses. By establishing and maintaining those relationships, the business can generate more recommendations, and therefore more business. We will create more enterprise value by maintaining the uniqueness of the facility, and eventually adding other features based on customer wants. We also hope to build cabins and a large pond in the long run to become more “all-inclusive.”
April 22, 2016 at 2:27 pm
The biggest way that our company will create enterprise value in the long term will be to establish a loyal customer base. While it will initially be challenging to get customers, as their are so many different hunting outfitters in the market, it will be setting ourselves apart from a customer service perspective that will create the most enterprise value for us. As our customer base grows and more and more consumers come back every year, we will not only have to spend less money on marketing and advertising, but will be able to better use this money to improve our company. From making our business more efficient, to having a higher successful hunt rating, out enterprise value will increase in the long run.
April 22, 2016 at 3:00 pm
I think for McKinnie Hemp Co. our biggest concern is making profits. There are currently not as much customers in the market than we thought. Although Hemp production in the USA is projected to significantly increase as soon as it becomes legal, there is not enough production to make significant revenue. It really can hinder the ability for McKinnie hemp to invest in R&D.
April 22, 2016 at 3:57 pm
Just about like everyone else our main concern for Ames Film House is getting the money to get started. It is very hard to determine what our revenue and expenses will be. We will just have to use our best educated guesses for these numbers. With just getting started it is very hard to get numbers that could actually represent our first year of business.
April 24, 2016 at 10:33 am
For EquiSpection Rx, we will create enterprise value through continuous innovation. We’re hoping to establish our initial product with the microchip, but after inserted, they will not be able to be altered or changed. However, if it connects to a phone app, we have the possibility to add more features as we expand. This will create value for our customers and potentially attract a larger market share. Our development costs may be substantial, but if we license our technology as planned further development will only exist in software.
April 24, 2016 at 6:36 pm
Artisan Farm Hub will need to sell slaughtering services and product. As soon as the Mobile Slaughter unit is purchased, it can be used. Animals can be custom slaughtered on farm and delivered to the locker/butcher of the owners choice. Once the storefront is built, the meat can be processed by Artisan Farm Hub and sold for profit.
April 24, 2016 at 9:18 pm
No Scoop will generate plenty of profit so as a business we shouldn’t have a problem with expenses. Within agriculture today, we expect things to be well developed making every day life more efficient and safer which is the objective of No Scoop. We also don’t want to get involved with other companies when selling product in hopes to decrease difficulties regarding how expenses are weighing down our business.
April 24, 2016 at 9:58 pm
For Trinity Scales it has been difficult establishing a price on our innovative business. Having different variable costs it is difficult adding up all of the factors and creating a profit. Elon Musk as well as many entrepreneurs, I’m sure struggled with this while approaching a new market. Creating a positive cash flow in a financial statement has been the most difficult process for our business. Yet, this is the most important process while creating a business that will be successful in the long term.
April 24, 2016 at 10:31 pm
I think the most difficult part of our business is the different barriers it needs to go through to gain a return. We need to make the sale to the study abroad office, then find students interested in our trip. Without either of those being successful we would make $0. With this being said, I think that it is extremely important to increase sales overtime to become more profitable. By selling a service, we are selling the relationships that we gain across the US which would also require time to build, which is the core of our business.
April 24, 2016 at 10:55 pm
Whitetail Science will be difficult to gain a positive cash flow position for the first couple years due to the cost of equipment and the low marketing expenses. After the first few years of struggling it will prosper due to the quality work we will do. The biggest problem will be financing in the beginning. It has been difficult to establish a price on the incomes of the products and services, jumping into a new market. There are so many variables and unknowns with what we are trying to do with our business.
April 24, 2016 at 11:38 pm
I believe that the pathway of my business to a positive cash flow would begin with prototyping. Once we have a good prototype, we can increase our cash flow. Also, after researching and developing, we can increase our cash flow.
Building an enterprise value in my business over the long-term is done by saving money. If we save money, then we can have support if we need it. We can build our enterprise value with our savings to buy new items and grow our business.
April 25, 2016 at 12:25 am
Cash flow is key for a developing business and building an enterprise. For TG Blinds we feel like the money to get started building is there but how can we best use our financial abilities to market our product. Developing good relationships with friends, hunters and prominent people is a way to get things started positively in all aspects of starting the business.
April 25, 2016 at 12:48 am
I think the path forward to cash flow positive for Heartland BioProducts is through scale ability over the long term. This means that in order to make up for the sizeable fixed costs and capital expenditures in the beginning I need to have sever sustained years of revenue growth and market size increases. Now due to the massive size of the PET market this isn’t a problem but capitalizing on this could be. If Heartland isn’t able to scale up, then it will not be producing enough cash to overcome the risk of holding so much equipment and assets. Also the refining of the conversion begins to play a bigger role as we move away from our biggest expenses being capital assets and we start to move towards variable costs being the biggest.
April 25, 2016 at 4:23 am
In our business we will have a large up front investment with equipment and other technology advancements. We will need to run over many acres to produce revenue and cash flow positive. We will maybe not cover the up front costs by just the number of acres right away. It will take a few years to become cash flow positive and produce a steady income. We hope that the practice will become adapted, but this could remain an issue as well.
April 25, 2016 at 6:47 am
At 9 Line for Life our main enterprise value will come from a key partnership with the organization Stop Soldier Suicide. By partnering will this already established Veteran organization we will be able to develop our business faster than if we were creating our organization from scratch. We will depend on donations from other Veteran organizations such as the Wounded Warrior Project and donations from the general public in order to have positive cash flows.
April 25, 2016 at 8:56 am
It is important to have positive cash flows within a business whether it is a profitable business or a non-profit business. As a startup business you have to go into debt in order to get your business off of ground but you have to make sure that you will have cash to pay off that debt down the road. With 9 Line for Life a non-profit business we plan on having cash to runoff off of right off the bat. We will go into debt but as we do we will have constant cash coming in. Where exactly will we get our cash? Well we will get our cash mostly from donations by families and other organizations.