How To Close Out The Year

As if there isn’t enough to do in December, it’s time to organize for closing out the year (and maybe to start planning for the next year!). Some things to consider:

• Does anyone owe you money? If you have long overdue accounts receivable, this is a good time to follow up on it, and to make agreements for payment. You may also consider writing off anything that you don’t think you’ll collect as bad debt.

• Do you have appropriate documentation in place for all of your contractors? You’ll want to make sure you’ve collected a W9 form, and that you have a good record of what you’ve paid them over the course of the year. If it’s more than $600, you’ll need to send them a 1099 in January.

• Plan to do a count of your inventory and fixed assets. You’ll want to reconcile what you actually physically have against what you have on your books to close out 2016.

• Consider doing an annual performance review with your employees. These can be done at anytime, but for many of us, it makes sense to think back over the past twelve months, discuss what’s been accomplished, and set some goals for 2017!

• Do something fun! This is a stressful time for lots of people, which also makes it a great time for a potluck, gift exchange, or excursion -- anything that shows your employees, vendors, and customers your appreciation for their hard work and support of your business.

Need help with any of these items? Email us at info@fridayconsultingsf.com with questions.

SOCAP14 Panel Discussion Recap: Continuing the Impact Weavers Conversation

“Here’s to the doers, the practical ones who flesh out the visionary’s ideas against what’s real and possible, the ones who point out the barriers ahead of time and find a way to get the visionary’s idea turned into a product or a service.”   -Kevin Doyle Jones, Convener at SOCAP

Together, Social Capital Markets and Friday Consulting developed the Impact Weavers Award to change the conversation around who the heroes of social enterprise are, to recognize not just the visionary founders, but also the behind-the-scenes leaders who build the team and operational infrastructure to bring the vision to life. At Friday Consulting, we’re very familiar with this kind of internal role. We work with food and health & wellness entrepreneurs who have a vision for a business with social impact, but who may lack the bandwidth or knowledge to take that vision to the next level. question Playing this role ourselves, we understand how vital it is and call those who play this role “Impact Weavers” because we see them as skillful weavers, lacing together the many different parts that must come together to form a thriving, impactful organization.

During SOCAP14, we had the pleasure of awarding the inaugural Impact Weavers Award to two outstanding internal leaders: Mary Voelbel, Program Director at Upwardly Global and Lindsey Engh, Co-Founder and Managing Director at Impact Hub Seattle. We also had the opportunity to bring the conversation about impact weavers to the surface through a panel discussion about the important role internal leaders play in building successful organizations. Joining us for the discussion were the Impact Weavers Award recipients, Lindsey and Mary, as well as Sal Giambanco, Partner at Omidyar Network, and Shirley Gee, Managing Partner at Angel Plus LLC.

During our discussion, we asked the panelists: What are the key characteristics of a successful Impact Weaver? What do Impact Weavers need to be successful? What else can be done to change the conversation about the Impact Weaver role in social enterprise?

Here are some key takeaways from the discussion:

• Impact weavers are flexible and savvy. They engage in continuous self-reflection, exude humility, are great at delegating, and hire to compensate for weaknesses.

• Impact weavers need a learning culture that supports innovation. Give them permission to try things out and take risks, while providing formal pathways for feedback.

• Impact Weavers should to be given opportunities to take more visible roles or claim credit for achievements. For founders, don’t just celebrate results, but also celebrate how and because of whom you achieved those results.

• For founders wanting to better support their internal leaders, invest in your people and thank them. Provide real support for your Impact Weavers, and all of your employees, by taking steps to understand the whole person.

We don’t want the discussion to end here! Friday Consulting will be continuing this important conversation about internal leadership in social enterprise through our Impact Weavers mentorship and discussion group. We invite you to help us change the conversation about impact weavers in social enterprise and join the Impact Weaver community! For more information about the group, please email anne@fridayconsultingsf.com.

La Cocina Workshop Recap: Investment Readiness 101 for Food Entrepreneurs

We had the pleasure of hosting a workshop on investment readiness at La Cocina’s Food + Entrepreneurship Conference a couple of weekends ago in San Francisco. We discussed what it means to be investment ready, how to get there, and what investors are really looking for.

For those who couldn’t join us at the workshop and attendees looking for a refresher, here’s a brief recap of the information covered during the session.

What is Investment Readiness?

Investment readiness is much more than just needing money. The need for funds alone does not mean you’re ready to seek them out, much less that you’ll be successful. There are four main components that make up investment readiness:

1. Vision and Goals

It’s important to know where you want your business to go and the impact you want it to make. Your vision should answer the question, “What type of world am I trying to create with my business?” Within this vision, understand what your special sauce is–the key differentiator that makes your business stand out from the rest and keeps your customers coming back.

This vision will shape your goals, both long and short term, and will be guided by your values and the core beliefs shared by you and your stakeholders. Ultimately, it will function as the framework for the decisions you make about your business.

2. Financial Fundamentals

It’s important to be able to speak to your businesses key financial metrics. A food business must understand its gross margin, as well as what its gross margin should be based on an industry baseline. Other metrics will depend on your particular business plan. For example, revenue per square foot is a key indicator for a retail business. You need set targets and outline a plan for how you will reach these targets and your strategy for expansion.

You are not investment ready if your business plan does not get you to the point of paying yourself. We often see businesses where the founders or senior employees are either not paying themselves or are paying themselves well below market rate. Your plan must include paying yourself market rate at some point down the line, and hopefully sooner than later.

3. Proof of Concept

Proof of concept demonstrates to others that your product or service is viable. Ideally, this is in the form of a prototype, product, or existing revenue, but could also be based on experience and related things you’ve done in the past or that your team has demonstrated experience in.

4. Clear and Confident Communication

The last piece of investment readiness is being able to clearly and confidently articulate the three pieces outlined above to others. Part of this includes understanding what your investors are looking for and the information they’re interested in, as well as preparing clear and compelling pitch documents.

In our Investment Materials Resource Kit, we outline what documents you should put together and the information to include in order to successfully pitch potential investors.

So, what are investors are looking for?

When pitching investors, they want to hear a story about who you are and where you are going. This story should contain three main parts: special sauce, financials, and your ask.

The special sauce aspect of your story helps investors understand what makes you and your business unique. This ties back into the vision you’ve created for your business and its impact on the world it operates in.

The financial component to your story should include both your historic and projected financials. You should be optimistic, realistic, and honest. The numbers included in your financial story should be well researched and backed by as much evidence as possible. Do not include pie in the sky numbers, but don’t sell yourself short either.

The ask focuses on the the size and type of investment you are looking for. Investors want to know why investment is needed at this time and where it will get you in terms of your growth strategy.

As you build your pitch, always remember that you are telling a story. You want to bring investors along with you throughout your past journey and into the future as you articulate these pieces of your story.

Additional Resources:

We’ve put together an entire investment readiness resource page on our website. There, you’ll find:

• Slide Deck from the La Cocina Conference
• Investment Key Terms
• Information about investment types and materials
• Slide Deck from a Finance 101 workshop

As you can see, there’s a lot that goes into investment readiness, and we barely skimmed the surface in our workshop. Our goal is to help you understand the bare basics of what goes into being investment ready, so you can figure out what your next step should be in preparing your business for investment.

We know it can be an overwhelming process, and that’s why Friday Consulting offers investment readiness services to guide you throughout your journey. We’ll work with you to craft your vision and goals, financial fundamentals, and proof of concept. We also provide pitch coaching services, assistance with developing investment materials, and support in finding the right type of investors for your business.

Sound like what you need? Send us message and learn about our services in more detail.

Top 3 Materials for Pitching Investors

Knowing the right information to present to your potential investors and preparing clear and compelling pitch documents is crucial when raising money. It can be a daunting and anxiety-filled task, but Friday Consulting makes the process easier by working with you to put together and provide feedback on these documents to successfully pitch investors.

To get you started, we’ve outlined the three most important materials to prepare for your pitch.

1. Executive Summary

The Executive Summary is a one to two page high-level summary of key points about your organization. This is the first thing you will send to your potential investors after meeting or being introduced to them and initial information is solicited. Your goal here is to whet their appetites–get them interested in your business and open to receiving more information. Include your high-level goals and key drivers.

2. Pitch Deck

Next, you should follow up with a conversation where you walk your potential investors through a pitch deck, either in person or by phone. This deck should not be too text-heavy, since you’ll have the opportunity to provide verbal comments. Instead, focus on graphics and visuals that expand on information in your executive summary.

Remember to tell a story about who you are and where you’re going. Exactly which headings you include and in what order will depend on the story you’re trying to tell. Don’t forget to make the text scannable and focus on the visuals. Anything that can be represented graphically, instead of being spelled out in works, probably should be.

3. Business Plan Deck

Finally, you’ll want an expanded version of your pitch deck that stands alone and doesn’t need you to walk someone through it. This Business Plan Deck follows a similar outline to the Pitch Deck, but may include several slides with more information on each topic, including written text and data. You should include more financial information–think about including multiple slides under the same heading that cover your balance sheet, cash flows, etc–as well as operational information. You should also address the question of how you are going to reach your goals, including go-to market strategy and customer acquisition. As with the Pitch Deck, the Business Plan Deck should be scannable and use bullet points, tables, and infographics to provide information as much as possible.

For detailed outlines on the key elements of the Executive Summary, Pitch Deck, and Business Plan Deck, see our related resource kit.

Need help crafting your pitch and investor materials? We’d love to help! Send us a message.

Photo credit: http://401kcalculator.org

Client Spotlight: Stag Dining

Anil Margsahayam is one of the five founders of Stag Dining, a full service event production and catering company combining excellent cuisine, art, and sustainably sourced ingredients in a festive, yet sophisticated atmosphere. Sustainability is truly at the core of the company and the group is dedicated to making sustainable decisions for their venue, decor and food. They take pride in sourcing local fare from organic farmers and ensure that each dinner is a zero-waste/landfill free event.

Stag Dining began in 2010 and has been a client of Friday Consulting since June 2013. Friday Consulting has worked with their team on financial modeling, accounting, operations, and human capital management.

We chatted with Anil about the Stag story and what challenges the group has overcome in starting their sustainable food business.

What was the inspiration for starting Stag Dining?

Collectively, the Stag team has known each other for about 20 years. Matt, Jordan, and Ted all went to high school together. Emory, Matt, and myself met in college at USF and Jordan and Ted have worked together for years as chefs. We’ve all been lifetime friends and over the years have become interwoven. We each bring a vast array of skillsets to the table and we decided to think about ways we could pull all of our talents and experience together. Our first thought was to do some type of food truck and from there we began asking ourselves questions like, “What type of food truck would we want?” and “What would it take to pull something like this off?” After some thought, we decided to take a step back and started hosting dinners. The idea for these dinners actually ties back to something we used to do throughout our friendship. We enjoyed breaking bread together, celebrating friendship, nature and feasting together, family style. Organizing the dinners and events seemed to be a really natural transition from what we were already doing together for fun. We started hosting these intimate dinners that became so popular that we put the truck on the backburner and focused just on the dinners.

In the midst of our first year of business, we developed a great relationship with Adrian Grenier’s SHFT.com. They filmed one of our events featuring Aloe Blacc in the Summer of 2011. The event was so fun to put together that they invited us back to the Sundance Film Festival that winter to work with Ford Motors. Ford was at Sundance to highlight their sustainable materials initiative and asked us to tell their story through food in a supper club environment. We carefully wove Ford’s vision into our dinner using all sustainable and local ingredients from the Salt Lake Valley. What transpired was a magical night that featured great stories by Peter Glatzer and Adrian, complemented perfectly by an unplugged set from Aloe and Joel Van Dijk. Diners had a great time, we rocked Sundance, and came back to San Francisco with ambitions to evolve our business into a full-service event production and catering company.

Now, we have an amazing product thanks to the magical talents of Jordan and Ted, but also because of the experiences we create, which ties back to our own tradition of family style meals and communal gatherings. I really think it’s this aspect of our company that helps us stand out.

What challenges do you/have you faced while building Stag Dining in relation to finance, human capital, and/or operations and how has Friday Consulting helped you overcome these challenges?

At the most basic level, a lot of our financial reporting lacked the pin-point accuracy we were striving for. Shivani has really helped us keep track and analyze our books, her industry expertise has given us a lot of new insight to our performance. Working with Friday Consulting has definitely helped us run a tighter ship. Shivani has also worked with us to evaluate our company as a whole and how we work together interpersonally, so we can be more efficient.

From a human capital management perspective, as we’ve continued grow, it has stretched our company to manage every aspect of our expansion. Shivani has helped guide us through the process and create a financial model for scaling our business. Creating this structure has allowed us to build out our team and bring on a new Friday Consulting bookkeeper as well as additional employees to help us optimize our company performance. With these recent additions to our team, we’re already seeing better efficiency and growth in our business.

What advice do you have for food startup entrepreneurs just starting to build their businesses?

I think it’s important to be able to bootstrap something and start working on it with your team as quickly as possible. It’s also important to identify and utilize expertise and experienced professionals early on like Shivani, who can help get the key business structures in place. Lastly, you really have to be able to build key people and essential roles into your business plan. You may initially have team members that say they can take on many different roles, but it’s not sustainable or efficient to have team members wearing too many different hats.

To learn more about Stag Dining visit: http://stagdining.com/.

Stag Dining: Facebook | Twitter | Instagram

Client Spotlight: Tomato Sherpa

Stacey Waldspurger is the Founder and CEO of Tomato Sherpa, a Berkeley based meal delivery service that makes it easy for busy professionals to cook at home. Tomato Sherpa offers delicious new recipes each week that can be catered towards a variety of dietary preferences. Choose the recipe and portion size, and they’ll deliver you a perfectly packaged meal kit with locally sourced ingredients to cook and enjoy in the comfort of your own home.

Tomato Sherpa launched in March of 2013 and has been a client of Friday Consulting since January 2013. Friday Consulting has worked with their team on projects related to financial modeling, operations, accounting, and fundraising. Currently, Shivani Ganguly, Founder and Principal Consultant at Friday Consulting, also functions as the CFO of Tomato Sherpa.

We had the chance to sit down with Stacey and ask her a few questions about her journey in building Tomato Sherpa and some of the challenges she has faced as an entrepreneur and founder.

What was the inspiration for starting Tomato Sherpa?

Tomato Sherpa was formed when I was attending Presidio Graduate School for my MBA. My capstone team and I really wanted to create a viable business that made an impact on the community, health, and local economies. We took some time to think about what brings communities together and we kept going back to food. There is a surprisingly high number of folks that enjoy cooking: 79%. However, the producers of convenience foods, like microwavable meals, are trying to convince us otherwise. We dug deeper and realized that there is a health epidemic within the corporate work force because people don’t have enough time to shop and cook. We decided that we wanted to make cooking quality food at home easier and more accessible for professionals with limited timed. From there, we came up with the idea of creating recipes, packaging ingredients, delivering the food, and teaching people how to cook, while saving time in their evening hours.

What challenges do you/have you faced while building Tomato Sherpa in relation to finance, human capital, and/or operations?

One of the things that I’ve learned during this journey is that knowing your strengths and weaknesses is an important part of being a founder. For any founder, you have to really understand those weaknesses, so that you can bring people in to help form the foundation in the places that you are missing.

I have a really good sense of the market and design, which has allowed me to create the business strategy and the structure of the company on my own. However, I knew early on that I lacked the financial component of being able to tell the story of the business in numbers. I also needed guidance with fundraising and understanding who the appropriate investors are for Tomato Sherpa.

How has working with Friday Consulting helped you overcome these challenges?

Friday Consulting has been like a member of our team filling in the gaps. Shivani has helped us build a strong foundation, which is essential to creating successful business. By working with Friday Consulting, we were able to outsource our weaknesses and function in a lean start up capacity without having the overhead of a whole team.

For financial modeling, Shivani took a deep dive into the business in order to create a concrete and aligned financial story. We worked closely together to create accurate financial projections, which is so important for a food business, since margins are key. In order for her to create an accurate representation of our financial story, Shivani got to know our business really intimately, coming into our kitchen to see how things are put together and helping us make the right operational changes to make things run more efficiently.

For the fundraising piece, Shivani has really been key in helping me understand and identify who the appropriate investors are for Tomato Sherpa. She’s helped me build, practice, and hone my pitch and is also helping pitch to some investors.

The other aspect that Friday Consulting has supported us with is being a mission driven company. Shivani and I went to school together at Presidio, so we have a deep alignment in our personal mission and values. At Tomato Sherpa, our mission is at the core of our product, partners, suppliers, and customers, and I don’t have to explain that to Shivani because she fully understands the mission and works had to incorporate it into all of her work for us. We couldn’t be a mission driven company and work with someone who doesn’t understand this objective.

What advice do you have for food startup entrepreneurs just starting to build their businesses?

What I’ve learned over the past year with Shivani and on my own is that there is such a rich network of companies in the food start up space that are so supportive of each other. Connecting and getting to know all the players in this network has really been a huge advantage for myself and Tomato Sherpa. The more you share, the more you will flourish. Some entrepreneurs’ gut instinct it to want to keep their idea a secret and protect it, but that’s really not helpful at all. By sharing, you open up the opportunity to receive great feedback, partnership opportunities, and new ideas. Networking and sharing your idea(s) is a huge learning experience and will allow you to improve yourself and your business.

My other advice is to really focus on market feedback early on. Get a prototype out to an audience at the earliest stage possible. Then iterate, iterate, iterate, iterate! We really focused on this lean startup mentality and because of the market feedback that we received through our prototype testing, we have a better product.