ENT 650 – Week 8

A Takeaway from what I’ve learned so far…

This semester was a real eye opener for me. I thought I was done with my Sources & Uses spreadsheet at the end of ENT 640, but there was so much more to learn about this one little spreadsheet (and everything was so important!). I had no idea how involved valuing a company actually was. I hear valuations all the time on the podcasts I listen to and the TV shows that I watch about entrepreneurs. I guess I never really thought, in detail, about how they come up with the valuation of their companies. I thought it was based more on how much revenue the company made before taxes and expenses were taken out.

There are so many ways to get funding to keep your business going, or get it off the ground. I learned more about crowdfunding, equity shares, and debt financing than I’d ever known before. I was happy to learn about ways to find cash in your business through inventory reduction and accounts receivable. I guess I had never considered what my business would look like if nobody was paying on time. I just assumed everyone paid on time. I never knew about incentives from suppliers for paying your bill in full, on-time or early. Paying on-time or early is a great way to cut costs because of the discount you receive on your bill. If you are buying super large quantities of an item, that’s a huge annual (and lifetime) savings!

I was also grateful for the guidance the harvesting assignment gave me. Who knew it was so important to start thinking about your exit strategy?!? When I thought about starting my own business, I never thought about how I was going to sell it…just how I was going to build it. With the many different ways you could lose your business to equity partners, the government, or just leaving it behind when you’re ready to retire…having a strategy is extremely helpful. Stick with a plan A, if that goes south…move on to plan B. Hopefully, you won’t have to worry about a plan C.

2 Comments

  1. Alex,
    I agree with your entire post! Seriously, I thought I was done with the whole spreadsheet assignment after ENT 640. Taking this class forced me to go deeper and really evaluate my assumptions concerning cash flow management. How could I operate on a slow influx of cash and how much would I need to stay afloat.

    Being forced to evaluate my business’s cash flow against industry standards was such a blessing. I would have never considered making payment arrangements with vendors to float my cash to pay other bills. I don’t even do that in my personal life (WAY TOO STRESSFUL) but seeing the benefits it could have on a business made me change my perspective. I would never recommend “robbing Peter to pay Paul” but to may money, you need money and keeping cash to pay for immediate supplies may be the best option to pay bills on a later day. I believe the key is not to make it a habit. Maintain good communication with vendors and be vigilant in keeping your promises.

    Like

  2. Hi Alex,

    As an entrepreneur, we’re never done with numbers. This course and ENT640 have helped us to build a foundation for understanding business financials. These are a critical piece of entrepreneurship and so few entrepreneurs truly understand their numbers. I applaud you for your continued diligence in the process and what you have learned about cash flow and other business financials.

    Like

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