Stay on top of your finances. Don’t leave that up to others. This was the warning from Jack Foley our guest speaker on financial planning for lean start-ups. As a class of potential entrepreneurs it seemed like we all had a lot to learn from Jack who was eager for us all to tackle the complexities of financial management. Introducing us to FaB Linker (www.FabLinker.com) Jack shared the key financial concepts to help start-up businesses build a financial plan and more importantly how to effectively manage and track their money and finances. FabLinker was created to ‘ help entrepreneurs and non-financial managers understand, enjoy and use appropriate financial skills’. During the lecture Jack walked us through the language of Finance explaining the key financial terms - Balance sheet, Equity, Liability and many more. Learning the language of Finance helped provide a starting point to deepen my knowledge of Finance planning and reinforced the importance of building the necessary financial skills to engage with potential investors. The FabLinker software system Jack shared proved more challenging to absorb and was not possible to apply to our project with just a week to go before our final submission.
Engage Digital Financial Planning
To define our financial plan we had to first decide on our Revenue Stream, then look at our pricing plan and our sales pipeline. Mapping out our financial plan below for year 1 we focussed on start-up cost for estimating running costs per month versus potential revenue per month.
Revenue Stream
- Year 1 - 3 : SME subscriptions
- Year 4 + : Reports for 3rd party bodies
- Pricing plan
- Freemium model
- Premium model
- Concierge service
- Sales pipeline
- 5 team members – 20% conversion rate of meetings
- Year 1
- First half
- Business development, brand development, technology development, networking, promotions and marketing
- 10 prototype clients SMEs in Dublin City
- Cost in Year 1
- Data analyst salary: €45,000
- Outsourced development: €40,000
- Overheads: €25,000
- Promotion: €10,000
- Total: €120,000
- Second half
- 10 paying customers at €3,600 annual subscriptions.
- 10 customers paying €500 in concierge fees
- Revenue in year 1
- €36,000 in subscriptions
- €5000 in concierge fees
- Total: €41,000
- Deficit: €79,000
This is our MVP financial model and hope to be able to leverage the FaBLinker system as a reference point for future financial forecasting and tracking.
Focus and important To Do’s for our team.
With less than a week to final submission the main areas of focus for our team are as follows:
- Aisling: Complete draft presentation for Mon 24th Nov final presentation.
- Claire: Complete final prototype for the Engage Digital Giftitude App.
- Marie: Complete final consumer interviews to test hypothesis around Gifting versus discounts as our value proposition for consumers.
- Gearoid: Review all interviews across SMEs and Consumer sets to identify trends and conclusions.
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