The biggest error in planning may not be spreadsheet calculation error. Or cost estimation. It is most often missed assumptions about the market, the competition, the speed of adoption, or other critical metrics you’ve researched, or selected, or even just guessed at to create your plan.
Business plans that I see often show three to five years of projections, demonstrating profitability at the end of so many months of operation. Most every one of these uses an accrual basis for determining break-even, never attempting to predict the cash impact of major items.
Since Bill Hewlett joined with Dave Packard in 1939 to create what is today one of the world’s largest computer companies, there has been an evergreen debate as to who is more important in starting a tech company: the techie or the business guy?
Not all companies are successful. The end game can be a failure of the business. In fact, many angel investors or venture capitalists look for and respect the lessons learned by entrepreneurs that have survived a failed business.
Growing companies usually require more working capital during their periods of rapid growth. In past insights we have calculated the amount of additional capital needed for a business as it grows, and the additional capital required is often surprisingly large.
From a sports car to an aircraft to a super tanker, successful operation depends upon the pilot’s understanding and urgent, timely use of a dashboard. Real time information is critical to real time decision-making, and increasingly in the modern business world, decisions are made by management without extended meetings or discussion with others.
At the MIT Center of Collective Intelligence, professors and graduate students are wrestling with an important opportunity—and gaining ground. With new collaborative tools available for use in the cloud, people are no longer isolated in their creative endeavors.
There are a number of key performance indicators that help new generation company management see more clearly their progress and corporate health. Here are some of these measures, and how to calculate them. You will recognize the value of these for any business, even if they have not been in common use in the past.
Small Biz Club is the premier destination for small business owners and entrepreneurs. To succeed in business, you have to constantly learn about new things, evaluate what you’re doing, and look for ways to improve—that’s what we’re here to help you do.