Executive Coach and Business Accelerator, Christine Comaford shares more on her “Evolve as an Entrepreneur” series. As a top Executive Coach and the CEO of Mighty Ventures, Christine has coached thousands of business builders to higher revenue, bigger sales, and better business plans and financing pitches. As the New York Times Best Selling Author of Rules for Renegades she has inspired entrepreneurs around the globe.

To manage the expansion of your business, you ABSOLUTELY need to know how to project future revenue.  Knowing the mechanics behind this is VITAL to your growth. Whether your goal is to boost the confidence of financiers or to communicate your ambitions and policies to your team, your business will always benefit from your clear vision and intentions on how to get there.

I’ve been asked about revenue projections repeatedly during my Business Acceleration Intensive weekends. Here’s what it usually sounds like, “I need to know what a decent five-year revenue ramp should be for my business plan. How do I make it attractive to financiers?“ The problem? CEOs wait and ask me this question far too late in their process.  Learning this at the BEGINNING of a financing effort, or even earlier, will take you MUCH farther on your expansion journey.

Why?  Because financiers like to see a decent revenue ramp, plus a controlled cost structure. Sloppy cost control will botch your profitability at the speed of light. Also, there are key inflection points that are expected in the growth of a business if it is to be considered compelling.

Let’s use this example. Company X is a product company, expecting approximately 70% revenue from products and 30% revenue from services. I’d expect cash-flow breakeven at the end of Year Two and profitability at the end of Year Three. By then, initial development costs should be covered by sales. And the company should know the estimated lifetime value of a customer, have repeat purchases, and have solid expense data, too. That’s because in Year Two it’ll have its internal systems and processes in place and run more efficiently.

A Smooth, Upward Path

Here’s a revenue ramp example if Company X is seeking equity financing:

Year One: $500,000 to $1 million (shows X can go from zero to somewhere)

Year Two: $1 million to $2 million (double previous year’s revenue)

Year Three: $3 million-plus to $6 million-plus (triple to quadruple previous year’s revenue—Year Three is when the staff, systems, products are solidly in place and a customer base with repeat sales is firmly established. This is when X is ready to blow the doors off!)

Year Four: $9 million-plus to $18 million-plus (triple or more previous year’s revenue)

Year Five: $27 million-plus to $54 million-plus (triple or more previous year’s revenue)

Remember, equity investors want to see rapid growth. They’re investing for a glorious exit, and generally want startups to get to $50 million-plus in revenue in five years or so, depending on the type of business.

A Gentler Incline

If you’re seeking a loan, I’d dial down the revenue projections above, as the goal here is to show a stable, growing company that will have the ability to repay its loan on time. In this case, again using all the assumptions above, I’d lay out the revenue projections like this:

Year One: $500,000 to $1 million
Year Two: $1 million to $2 million (double previous year’s revenue)
Year Three: $2 million to $4 million (double previous year’s revenue)
Year Four: $6 million to $12 million (triple previous year’s revenue)
Year Five: $18 million-plus to $36 million-plus (triple or more previous year’s revenue)

LEARNING how to build a business that has expansion BUILT IN to it’s plan, that is a company that will give you CHOICES.  I’ve been gifted to take a LOT of companies down that path and through that journey – teaching them to understand their top line AND their bottom line.  If you’re ready to rock and to build a company that is READY to expand and READY for financing, feel free to get on board.

I’m taking my BAI weekends on the road and building communities of business builders all over the country.  Because Business Acceleration is not a theory, it’s your future.  http://bit.ly/ComafordBAI

Christine Comaford, Executive Mentor
CEO of Mighty Ventures, Inc.
NY Times Best Selling Author

Christine is the leading authority on business acceleration and optimization.
She has built and sold 5 of her own businesses with an average 700% ROI.
She has served as a board director or in-the-trenches advisor to 36 startups.
She has invested in over 200 startups including Google.

Christine has consulted to the White House (Clinton and Bush), as well as 700 of the Fortune 1000, and 300+ small businesses. She repeatedly removes obstacles and optimizes performance in companies large and small.

1. Create A Capital Acquisition Strategy.

2. Contact The Targeted Investors: Try to do this through a personal introduction if possible–this will move you to the top of the stack.

3. Have The Initial Meeting: Don’t break out the business plan yet–use the financing pitch presentation: If the investors are interested and request it, give them the executive summary. But don’t set a price for your company. Keep it quiet.

Ask the INVESTOR what they think it’s worth.

4. Meet With The Investment Group: If the investors review the summary and request another meeting, it means they’re very interested–and want more of their group to come in. If all goes well, go ahead and hand over your business plan.

5. Secure A Lead Investor. This person does most or all of the due diligence, and helps bring other investors into the deal. The lead drives the process, so get one PRONTO.

6. Set The Price. Preferred stock often starts out at $1.00 per share, where common stock will be about 10% of this price. Founders stock (or sweat equity) is often a penny or so per share. Get help from your startup-savvy attorney in setting the stock price,  negotiating the employment agreement and vesting schedule, etc.

That’s it–that’s my main checklists. Print this email out and stick it up on your wall or fridge.T Then, as you finish each step, cross it off and move on to the next one. You’ll be surprised how motivated you’ll be to get to that last step!

If you’re REALLY ready to meet investors and build a rockin’ financial pitch, come to my 7 Figure Business Summit – where there will be amazing angel investors to meet and listen to.  The Summit is only DAYS away now (4/30-5/2) – so hurry! Get your seats before they’re gone. (As I write this, there’s only 30 seats left – and you can STILL bring a friend for half price. (My personal recession buster) – 7 Figure Business Summit.)

To your amazing and IMMEDIATE 7 Figure Success,

Christine Comaford, 7 Figure Business Builder

CEO of Mighty Ventures, Inc.

NY Times Best Selling Author of Rules for Renegades

PS: IF you cannot attend my Summit for any reason, then by all means, grab my Results Now Webinar and get started – but I think you should ALL be at that Summit and give me a chance to see you and hear the extraordinary life that YOU want to build.

Christine Comaford believes every entrepreneur has at least one multi-million dollar business inside of them. Her 7 Figure Business Formula has created over 153 multi-million dollar businesses. Learn the 6 proven steps to YOUR 7 Figure Business here: http://bit.ly/ComafordWebinar

Today is the second part of my blog on what makes your team members feel a sense of ownership.  Remember, there’s a lot more to be said about team BUILDING and ownership, and I go into tons more detail about this at my 7 Figure Business Summit on 4/30-5/2.  The event is only TWO weeks away now, and there are less than 30 spots left.  You can still come for the early-bird price of $997 AND bring a friend for half price. (That’s MY PERSONAL business acceleration recession buster — 7 Figure Business Summit.)

Reminder: Your comments and feedback on this blog are always welcome.

If you want more accountability, more initiative, more caring and concern for your business, you’ll want to crank up the aspects of ownership that a team member feels.

5. Authority.  This is the degree of autonomy the person has to make decisions without you.  Remember, a group of partners has limits on individual authority, so saying “owner” or not does not answer this question, it’s independent, but more authority does make someone feel like they have more power over their environment and life and thus feel more like an owner. Your team members need to “own” their areas completely without your micro-managing them, and likewise, major corporate decisions are yours, the CEO’s, and these must be respected too. It’s fine and even good to be questioned. If the emperor has no clothes, speak up for goodness sake. We all have reality distortion fields. The question is, is someone’s about to damage the company? If so, speak up, if not, let them thrive and control their area of responsibility.

6. Consultation.  People like (and want and need) to have their advice solicited, to be listened to, to be consulted on major decisions. This does not imply you have to do what they say, but does commit you to ask their opinion and listen. And heck, if you don’t want to consult your team members, then you have the wrong team. Remember how I say it’s crucial to hire people who are smarter than you? This is one of the many reasons why. You’ll want to tap into their smarts. Appreciation and acknowledgement are conveyed when you ask someone’s advice, when you respectfully listen to it and consider it.

7. “Marriage.”  This is the psychological aspect of feeling a sense of mutual commitment.  It is in some ways the aggregate of the other rights, but in my experience is more about the manner in which you deal with the person, the way you introduce them to the world externally and internally, and whether you act like the senior partner or the boss. For instance, I have an agreement with my team members that we’re in this together, and neither one of us will bail on the other without voicing our concerns and trying to remedy the situation. Sounds like a marriage doesn’t it? It sort of is, and when you have this degree of mutual commitment, it makes the hard days easier, the burdens lighter, the trust level higher, the road smoother. Because you’re not alone, as so many entrepreneurs feel they are.

8. Time.  All of these rights can increase or decrease over time (vesting).  No one but a founder (and often not a founder) gets everything irrevocably all at once.  Trust is earned. It’s a cycle of testing, and trusting, then testing some more, then trusting some more.

A sense of ownership is a beautiful thing. What are you doing to foster this within your team?

To your amazing and IMMEDIATE 7 Figure Success,

Christine Comaford, 7 Figure Business Builder
CEO of Mighty Ventures, Inc.
NY Times Best Selling Author of Rules for Renegades

PS: IF you cannot attend my Summit for any reason, then by all means, grab my Results Now Webinar and get started – but I think you should ALL be at that Summit and give me a chance to see you and hear the extraordinary life that YOU want to build.

What is it that makes a team member feel a sense of ownership? Is it autonomy? Money? Advancement? What really engages people to rise up, to act like owners, to take your business personally?

I was pondering this with my friend Adam recently, and we came up with 8 vital keys to ownership. I’m sure we missed a few aspects, but consider how you’re engaging your team members with the first four ingredients of ownership.  I’ll post the rest of the list on Tuesday – so definitely schedule five minutes to read the rest of the list then.

Reminder: Your comments and feedback are always welcome.

If you want more accountability, more initiative, more caring and concern for your business, you’ll want to crank up the aspects of ownership that a team member feels.

Title/prestige (e.g. a title that conveys you are a shareholder, partner, principal, member, etc.   There is some legal risk here that if you call someone a shareholder but they aren’t, they will later claim they are.  Therefore this should be accompanied with an employment agreement or signed side letter that says that title is X but regardless of title they are not a shareholder (if they are not) and have no ownership interest in the company). Now, that said, I am all for incenting team members with shares of company stock once certain objectives have been achieved. The point is to state these clearly.

Money. Someone can have their compensation tied to the performance of the company without being a shareholder.  This is “profit sharing” and can be complex because expenses, and thus profit, can vary widely, and although you want your team to be frugal, you also don’t want to have to step through your books with them. Again there are legal implications of promising a share of profits so you want to be careful to expressly limit rights.  Also it is important in explaining to a non-entrepreneur with experience only as an employee that one of the wonderful things about tying your compensation to profits is that it can go way up AND WAY DOWN.  If you want to be an owner, you go to the end of the line after everyone else is paid.  If things turn south and we have to cut outflows, you and I are the first ones to be cut, and the last ones to be restored.  Still loving the idea of being an owner?  Great!

Upside. This is benefiting from the value increase of the company from today through exit, but it is ONLY relevant upon exit.  If no exit is contemplated or occurs, upside is not real. This is why I like all entrepreneurs to have a clear End Game, of Freedom Finish Line. If you know when you want to sell your company, for ideally how much, to whom, and what assets will be most compelling, then fine—it is fair to set the Upside Expectation with your team members. If exit is contemplated, there can still be a “trust me” approach. Now if the End Game is a certain ideal annual revenue level for a lifestyle business, the Upside for team members could be bonuses tied to revenue or some other incentive.

Job Security. An owner can’t be fired unless you have a board of directors that can vote you out (this is one of the many reasons why you need to learn to manage your board, and of course have the right blend of people you trust on it, outnumbering any challenging personalities. You’ll also want a founder agreement to state appropriate protections for termination (e.g. severance).

Remember, there’s a lot more to be said about team BUILDING and ownership, and I go into tons more detail about this at my 7 Figure Business Summit on 4/30-5/2.  The event is only TWO weeks away now, and there are less than 30 spots left.  You can still come for the early-bird price of $997 AND bring a friend for half price. (That’s MY PERSONAL business acceleration recession buster — 7 Figure Business Summit.)

To your amazing and IMMEDIATE 7 Figure Success,

Christine Comaford, 7 Figure Business Builder

CEO of Mighty Ventures, Inc.

NY Times Best Selling Author of Rules for Renegades

PS: IF you cannot attend my Summit for any reason, then by all means, grab my Results Now Webinar and get started – but I think you should ALL be at that Summit and give me a chance to see you and hear the extraordinary life that YOU want to build.

One thing you ALL know about me — I want your business to be successful. To help, I’d like you attend a *free* tele-class with me on how to build a 7-figure business. http://bit.ly/CallWithChristine

On this call you’ll learn:

* A crystal clear solution to the 3 things you are doing RIGHT NOW that keep you overworked, underpaid, and feeling consumed by your business

* The KEY Question to Ask Yourself to Focus ONLY on the Needle-Moving Activities that will generate Forward Momentum and Big Results Quickly!

* Simple Strategies to build a Support System that gives you Complete Control and Ultimate Freedom over Your Business & Lifestyle

* The #1 Obstacle preventing You from Achieving Your Business Vision… and How to Break Through To New Levels of Success!

* The 6 step 7 Figure Business Formula that has enabled thousands of CEOs to build 7 figure businesses WITHOUT burn-out!

* 1 surefire way to get your team to become self-managed, highly accountable owners of their areas.

http://bit.ly/CallWithChristine

I don’t want you to THINK about attending this tele-class, WANTrepreneurs need to stop and think about every small aspect of their business and over-analyze opportunities.

True entrepreneurs TAKE ACTION when an opportunity comes their way. So I want to you COMMIT to being there for one of the upcoming dates.

http://bit.ly/CallWithChristine

Christine Comaford, 7 Figure Business Builder
Founder & CEO: Mighty Ventures LLC
NY Times Bestselling Author of Rules for Renegades

PS: Do this now!!! Don’t put it off until later or chances are you’ll never come back to it. I want to help, but you have to SHOW UP. http://bit.ly/CallWithChristine

Okay! Get a cup of jo, because this is a good one!

If we’re going to REALLY get down-and-dirty about building and funding a 7 Figure Business, let’s consider equity financing first. Each round of financing should be large enough to last you 12 months or so. Most companies do 3-5 financing rounds prior to exit (IPO or acquisition). The first financing round should be a smaller one – a few hundred thousand dollars usually from friends, family, or angel investors. The goal is to get a product in beta test form and prove your idea.

Next is a more formal financing round, often multi-millions, with institutional investors (such as venture capitalists) coming into the picture. Then comes round three, sometimes with corporate investors and more institutional investors. At the third round, the exit or liquidity event should be planned.

The other source is similar, except your financiers are angel investors instead of institutions. You still need to have the right corporate structure and you’ll have the ups and downs that come with someone else owning a sizable chunk of your company. Remember–the goal of any investor is to make money as soon as they can and at the highest value they can. This changes the course of a company’s business acceleration — a LOT!

Regardless of which equity-based approach you take, you’re selling a piece of your company, so you’ll be losing some control. You’ll now have partners who can vote on company decisions you want to make, and sometimes your plans will be shot down. That said, this may be a better approach than dangling alone on the financial hook. With equity, the company’s assets are at stake; with a loan, your personal ones are. Either way, though, your business acceleration and 7 figure success almost demand that financing is part of the deal.

This week, jot down 5 people who you could target as investors in your company. Think about how you can approach them, and how you can sell your business idea. If you’re ready to get your pitch in order, then you’re probably ready to work with me. How? Well, I mentor one-on-one and in small groups, through my Business Acceleration Mastermind program, and also with my Business Acceleration Intensive weekends.  I also mentor at live events, like my 7 Figure Business Summit.  THIS event is happening in only FOUR WEEKS.  4/30-5/2.  So hurry!

IF you cannot attend my Summit for any reason, then by all means, grab my Results Now Webinar and get started – but I think you should ALL be at that Summit and give me a chance to see you and hear the extraordinary life that YOU want to build.

To your amazing and IMMEDIATE 7 Figure Success,

Christine Comaford, 7 Figure Business Builder
CEO of Mighty Ventures, Inc.
NY Times Best Selling Author of Rules for Renegades

Christine Comaford believes every entrepreneur has at least one multi-million dollar business inside of them. Her 7 Figure Business Formula has created over 153 multi-million dollar businesses. Learn the 6 proven steps to YOUR 7 Figure Business here: http://bit.ly/ComafordWebinar

Hi gang. We’re going to pick up where we left off last week regarding how to obtain financing for your own mighty venture. Rememeber though, if you’re REALLY serious about how to win in the financing process, being at my 7 Figure Business Summit is a MUST.

We talked about getting investors to put money into your business, but if your company  is on the smaller side with fewer (initial) lofty goals and a more organic growth curve, a loan can be a good financing method.  Loans come in three tasty flavors:

–Secured Small Business Administration (SBA)
–Secured Small business bank loans
–Unsecured loans over the net

SBA loans are easier to get if you have assets to secure the loan with, a solid pre-existing banking relationship, and a high tolerance for bureaucracy. The process can be excruciatingly slow, but if you make it through, you can get a six-digit loan on pretty favorable terms.

A small business bank loan also requires a pre-existing banking relationship and high tolerance for bureaucracy, but you’ll get okay-to-pricey terms based on your credit rating.

An unsecured loan requires no collateral (a home or other asset) to secure it. Check out www.prosper.com (their current max $25k). If you demonstrate good will with prompt payments, you’ll be eligible for another, often larger, loan in time.

Now, the first secret about succeeding in the financing process…

Raise money BEFORE you need it, because the financing process always takes longer than anticipated. For institutional investors a realistic expectation is three to six months from the first meeting to the wire-transferred funds. Financings sometimes occur in far less time, but you must be prepared for the long haul.

Start raising money six to nine months before you’re due to run out of cash. Have a strong banking relationship already established in the event that you need a bridge loan to tide you over during an extended financing process.

This week, think about whether a loan is best for your business or if finding investors would be more to your advantage. Begin to outline a business plan that centers around your choice. If you’re REALLY serious about how to win in the financing process, being at my 7 Figure Business Summit is a MUST.

You can also find much more information on this – and all of my business acceleration tips, including needle movers, business model, mentorship, board of advisors, etc., at http://www.ResultsNowWebinar.com – it’s a GREAT opportunity to MOVE your biz (and get my personal mentoring).

To your success and your winning relationships!

Christine Comaford, The 7 Figure Business Builder
CEO of Mighty Ventures, Inc.
NY Times Best Selling Author

PS:  This is the ONE event you must be at this year: http://www.7FigureBusinessSummit.com

Recently at a party, another entrepreneur asked me, “What’s your biggest investment right now?”  I’m sure he meant financially, but when I REALLY think of what I invest most carefully, I think of my TIME.

So when I invite you all to take three days away from your business and travel to San Francisco to work with me, I KNOW what I’m asking.  But let’s get clear about one thing.  Freedom isn’t free.  It’s got a straight line connection to one thing — and one thing only: RESULTS. And you CANNOT build those results without investing your time with a mentor.

Get this you guys.  You can’t go into a store and buy success. You can’t visualize it in your morning meditation.  You won’t find it under your pillow.  SUCCESS isn’t soft and mushy.  Success is a tangible reality and it comes from ROCKIN your results and bringing them to a 7-Figure Level of Success.

Mentoring you to 7 Figure Results is my mission.  I have 28 YEARS of building businesses, business acceleration and creating REAL results.  Without that piece of the puzzle, I hate to say it, but you can forget about success — even if you “make it” — you’ll be tied to your company 24-7-365.  That’s where a MENTOR comes in.

Once you learn the path to building REAL results, it’s like breaking out of that prison.  Your company becomes your freedom, instead of your sentence.  If you’re ready to work with me, I’ve got an invitation for you!  And if you’re not 100% sure of your investment and how the 7 Figure Business Summit fits into YOUR success plan, you can click the button at the top of the page and request a “Summit Strategy Session” with one of my team.

http://www.7FigureBusinessSummit.com

Christine Comaford, The 7 Figure Business Builder
CEO of Mighty Ventures, Inc.
NY Times Best Selling Author of Rules for Renegades

PS:  http://www.7FigureBusinessSummit.com

How do you find funding for your business? Darts? Magic 8 Ball?  I don’t think so. Truth is, if you don’t develop a solid capital acquisition strategy, you’re likely to get the wrong money at the wrong time from the wrong financiers on the wrong terms.

Let’s say you’ve got a terrific business plan and you’ve honed your twenty-minute financing pitch. You’ve built a great team, got all your ducks in a row, and now all you need is cash. The first question you have to answer is “How much do you need?” And there are 2 simple rules to follow here:

Rule #1: Take more than you need.
Rule #2: Only if it’s cheap.

Always remember that cash is cheap, equity is not. If you sell a percentage of your company, it’s very, very difficult (and very, very expensive) to get it back. This is why it’s a great idea to take multiple financing rounds, especially in the startup phase when your company’s value is low.

I promise to write more on this tomorrow.  For today, that’s it.  I have to go and help one of my mentoring peeps through their own funding pitch.  (That client actually started out with me through my Results Now Webinar – a GREAT program for entrepreneurs who are too busy to get to my Summit in April.)

You can find details at http://www.ResultsNowWebinar.com – it’s a GREAT opportunity to MOVE your biz (and get my personal mentoring).

To your success and your funding success and business acceleration EVERY day!

Christine Comaford,

The 7 Figure Business Builder
CEO of Mighty Ventures, Inc.

PS:  This is the ONE event you must be at this year: http://www.7FigureBusinessSummit.com