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Financial Planning: How Do I Prepare to Present to Investors?

by Mike Baer

Funding for your new business is obviously crucial – no cash, no business. So let’s think about this from an investor’s perspective. What is it that interests him or her? What does he or she want to see? What questions answered?

Here’s what I’d be asking:

  • What exactly is the product or service that you intend to sell? Don’t assume that I understand it. Make it simple for me.
  • What is the market demand for this? Is it a cool idea, a “me too,” or is there a real demand? In other words, do people really need/want your product or service?
  • Who will your competitors be? How is your idea better than and different from theirs?

This first set of questions is about your viability in the market place. Is this a real business? This second set of questions is about you. Can I count on you? Read more

Starting Lean: Soft Launches Help Avoid Hard Landings

by Mike Baer

Adapted from material developed for a Third Path Initiative training module.

A very common story among highly excited entrepreneurs goes something like this: get a great idea, build the product, go whole hog to market, wait and lose a lot of money. It’s equivalent to the leadership anti-mantra “ready, fire, aim.” I call this the “emotional/entrepreneur syndrome” where any action is preferred to analysis and patience.

Contrast that with a less common but much wiser approach. Get an idea, test the idea, check out the landscape, build a sufficient product to try out, go lightly to market, listen, and adjust. Boring? Not at all…unless you just get off on failure.

This approach has been called many things over the years. It’s not new. Soft opening. Soft launch. Lean startup. Trial and error. Jesus put it this way:

For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him… – Luke 14:28-29, ESV

Out of context, I admit but true nonetheless. Take your time and do it right.

Here are the steps I’d use if I was doing another startup. After my initial ideation, testing the market, and market research, I’d: Read more

Developing a Flight Plan for Your Business

by Mike Baer

Adapted from material first published on the Third Path Initiatives Blog.

Values. Vision. Purpose. Operating Principles. Those are pretty lofty altitudes in your business development process. They are all necessary; just as a solid foundation is necessary if you are going to build a home that lasts. However, with the foundation laid it’s time to begin executing on what you actually want to do.

We call this Flight Planning. It’s part strategic plan and part market plan and part organizational plan and mostly action plan. Over the last 20 years we’ve seen a large number of startups and small businesses achieve amazing results by devising and then doing this simple 3-step process.

Step 1: Set Targets and Objectives

The first step of the Flight Plan is to determine where you actually want to be in the next year (Objectives) and the next three years (Targets). It’s useful to set the information out, as follows. Read more

Getting Started with Market Research

Once a month, our panel of mentors answer your practical business questions. Send us your questions!

 

Dear BAM Mentor,

I’m developing a business plan for a BAM company. What are some ideas, tips or resources you would suggest as I conduct market research and analysis, especially in a BAM setting?

~ Anticipating Analysis

Dear Anticipating,

The question of market research comes up constantly and is both a very important part of a business plan and at the same time can be a big waste of time. Let me explain.

If you are doing a business plan to guide your launch and actions, then all you really need is to figure out a few basic things:

1. Who else does what you plan to do?

2. In what ways are you better, faster, cheaper, easier to access, etc.?

3. What price point will your potential customers accept? What do your competitors charge?

4. Where, how, when will you distribute your product/service? Does it fit with where, how, when people want to buy?

5. How many potential customers are there? How many of them will you be able to convert into actual customers?

6. What laws, taxes, licenses, etc. exist that will affect your business?

Beyond these few things much more research will not give you ROI. So don’t do it. Read more

2IC: Business as Mission for the Rest of Us [Book Excerpt]

by Mike Baer

God graciously invaded my life in early 1974. Actually He had been battering at the gate of my self-centered fortress for some time prior but it was in February of that year that, like Lydia, the Lord opened my heart and I believed. My conversion was dramatic. Not emotional. No fireworks. Yet one man knelt down to meet Christ and another, entirely new person got up to live for Him.

Within a week I had connected with 3 other new believers on the campus of the University of Tennessee. We all faced a common dilemma. What do Christians do on Friday night? We were expert in what pagans do. But what about the followers of Jesus? Not knowing any better we decided to get together to read the Bible, to pray together and to play cards. That first evening there were 4 of us. The next week there were 8. Then 16 and so on until soon over 150 students and young people began to gather to study the Word, to pray, and eventually to exercise baptism, the Lord’s Supper and Church Discipline. Without our knowing it God had used us to plant a New Testament church. I, along with a couple of others became the “elders” and “pastors” of this congregation and from that point I spent the next 15 years in a pastoral role for several different churches around the U.S. I jokingly refer to myself as the “accidental church planter” because only God could have engineered such a path. Read more

An Abundance of Counselors: Practical Steps to Set Up an Advisory Board

Once a month, our panel of mentors answer your practical business questions. Send us your questions!

 

Dear BAM Mentor,

I keep hearing that having an Advisory Board is good idea for a BAM company. How is an advisory board different from other kinds of boards and how should I go about setting one up?

~ Needing Advice

Dear Needing Advice,

The question arises as to the purpose and practicality of an Advisory Board for a small business or a startup. I have had advisory boards for several of the businesses I’ve launched and served on advisory boards for others. Needless to say, I am a big fan.

King Solomon put it like this:

“Where there is no guidance, a people falls, but in an abundance of counselors there is safety.”  Proverbs 11:14

“…for by wise guidance you can wage your war, and in abundance of counselors there is victory.”  Proverbs 24:6

The basic premise of an Advisory Board is that, rather than try to figure out everything on your own, you can enlist the wisdom, perspective and experience of others to help you “wage your war.” In addition to advice there is also a healthy element of accountability – something many entrepreneurs don’t want, but something all of them need. Read more

Breaking Down the Sacred-Secular Divide

by Mike Baer

Adapted from material first published on the Third Path Blog, as part of a series, reposted with kind permission.

What is the Sacred-Secular Divide?

You don’t have to go very far today to hear some reference to the ‘sacred-secular divide’ or the ‘sacred-secular dichotomy.’ It’s in all the books, blogs, conferences – and occasionally in a sermon. And it’s always in a negative connotation.

So what exactly is the sacred-secular divide? In one sense, it’s impossible to define. It’s a kind of culture, a nuance, an entirely too subtle way of looking at life, vocation and ministry. It’s a shadow that covers many other aspects of our lives. It seems innocuous, but it’s not. The divide is a false dichotomy, a false worldview, an infection in the minds of Jesus’ followers that has done incalculable damage to the cause of the Church.

However, we can at least approximate the meaning of the divide in this way. It is a view of life built on a separation or distinction between those things, people and places someone believes to be sacred (holy and of God) and those believed to be secular (worldly and not of God). Certain callings are holy (missionary, pastor) and others are secular, i.e. of the world and therefore unholy (business, medicine, construction, etc). Certain places are sacred as well—church buildings, graveyards, seminaries while others are secular—my house, your house, schools, and athletic stadiums. I know you might like the sentiment, but a candle lit in a church building is no more holy or special to God than a candle on my 2 year old grandson’s birthday cake. Caution: if that statement offends you, then you are living in the divide. In short, it is all about distinctions and separations and classes and castes. Read more

5 Key Positions in Your Start Up and Some Things to Avoid

by Mike Baer

Adapted from material first published on the Third Path Blog, here and here, reposted with kind permission.

 

I’ve consulted with a lot of business startups – usually after they’ve stalled or run into trouble. The problem in almost every case I have seen is not funding. It’s people.

Not having the right people around you from Day One is Problem One.

This post will address some of the key things to think about when it comes to your team.

Team Composition

Exactly what you need in term of skills depends largely on the type of business you are starting and the particular impact strategy you’ve chosen. Nevertheless, here are some basic positions you need to have filled – even if you have the same person filling two boxes on the organisational chart or if you outsource. Read more

5 Funding Models for Your Kingdom Startup

by Mike Baer

Post first published on the Third Path Blog, reposted with kind permission.

The still famous line from the movie Jerry McGuire is “Show me the money!” Some of you have been thinking that as you’ve read the rest of this series. How do I get money to launch my startup? I’m going to outline several “programs” you can consider:

The “Missionary for a Moment” Model

I have to tell you upfront that I have rejected this model for years. However, recently a close brother whom I respect greatly challenged my thinking and got me a little closer to acceptance than I was before.

The Momentary Missionary Model essentially uses raised donations or support to cover living, travel and certain startup expenses just like a normal missionary would raise support to cover living, travel and ministry expenses. What makes this work is that you are committing to your “donor-investors” to be off their giving roles within a specified period of time, to have your business profitable and to live off it.

Your donor audience in this scenario is sympathetic although they may not be the most investment savvy. Be careful to not take unintentional advantage of that sympathy. This is business. Read more

How to Prepare for Investors

What would you say were the most important things to prepare or think about as I approach a BAM investor? What are some typical pitfalls or mistakes I could avoid?

Funding for your new business is obviously crucial – no cash, no business. So let’s think about this from an investor’s perspective. What is it that interests him or her? What does he or she want to see? What questions answered?

Here’s what I’d be asking:

  • What exactly is the product or service that you intend to sell? Don’t assume that I understand it. Make it simple for me.
  • What is the market demand for this? Is it a cool idea, a “me too,” or is there a real demand? In other words, do people really need/want your product or service?
  • Who will your competitors be? How is your idea better than and different from theirs?

This first set of questions is about your viability in the market place. Is this a real business? This second set of questions is about you. Can I count on you? Read more

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