From Kickstarter to Consistent Cash Flow: The Roadmap to a Sustainable Business

A successful product launch is one of the great highs that an entrepreneur experiences, and few moments are as validating that you are taking your business in the right direction. Not long after the confetti falls, the reality sets in that there’s a job to be done. 

For a new business, this is a significant fork in the road: 

Should you periodically use kickstarter for each new product release?

OR

Should you create a self sustaining business?

What are the ingredients of a sustainable business?

1. You have the first key ingredient: customers. 

2. A clear end goal and a plan for the future.  

3. An ecosystem of experts.  Entrepreneurs surround themselves with people who can begin to help carry the load.

These are not small tasks, but it’s the only way for you as the business owner and visionary to get your head above water. Your new job is to make sure everything is moving in the right direction.

What numbers do I need to know to be sure I stay on track?

There are a million different numbers you could try to keep an eye on within your business. In order to cut through the noise, we’ve found there are a few key metrics to pay close attention to, especially in the early days of a business (before calculating working capital, financing needs, etc.):

• Burn rate (fixed monthly expenses to run the business)

• Fume date (total free cash in bank divided by burn rate)

• Number of units or orders to break even each month  

• Capacities / bottlenecks (the constraints capping your growth)

Once you understand these numbers, you can make operational decisions (order more units, hire the next person, buy the next machine, etc.) and know exactly when you can afford to make the investment--essentially, a roadmap for growth. How’s that for peace of mind?

We recently used these exact concepts to help Plot Devices (a company that launched on Kickstarter) build out a growth plan. Anne Fogerty, one of the founders spoke of the impact of these concepts on their business: 

"Working with Amplify pushed me to articulate exactly what I want to accomplish with Plot Devices and drill down into what it's going to take to make that happen. They made sense of the chaotic inner-workings of my business and built the tools I needed to move forward. Now I can easily keep a good pulse on how things are going operationally and make informed decisions to ultimately grow the business."

If you’re looking to take the next step toward building a sustainable business, we’d love to talk. Feel free to schedule a call here.