Let’s face it, paying taxes isn’t fun. However, it’s best to get ahead of it to ensure you don’t end up paying any fines or late fees.

Luckily, fractional financial service companies, like Skyview CFO, have become more commonplace over the last couple years. The lingering effects of the pandemic have led to a rise in freelancers, and virtual services that mesh with the work-from-home or hybrid working environments

Fractional financial services can help business owners save time and money by ensuring your accountant doesn’t have a large pile of disorganized information to bill you at a substantial hourly rate to make heads or tails of.

What are Fractional Financial Services?

At Skyview, we provide three different types of services: Fractional bookkeeper, controller, and CFO services. Think of us as the translator between you and your accountant. Maybe you just need someone to clean up your books, or just an extra set of eyes on your numbers. That can seem costly, especially if you don’t have the budget to hire anymore full-time employee. This is where a fractional services can be a cost effective solution.

Fractional Bookkeeping

It’s 2023 and the days of bookkeeping being recorded in actual books are well and gone, as are the days of needing a software downloaded on your desktop. Accounting platforms, like QuickBooks have made the shift to online which allows for the virtual bookkeeping industry to exist.

The average salary for a full time bookkeeper is approximately $50,000. By providing our services virtually on a part-time basis, we are able to come in at a significantly lower rate – as lows as a couple hundred dollars per quarter!

A fractional bookkeeper will categorize your income and expenses, save and file your receipts, reconcile your bank accounts, process your payroll and produce your financial statements essential for both you and your accountant.

Fractional Controller

A fractional controller is more hands on than a bookkeeper. They can provide services such as budgeting, forecasting, price shopping, pricing strategy, and other analytical reports, in addition to the standard bookkeeping services above

Fractional CFO

A fractional CFO is more geared towards startups who need financial guidance, business planning, and funding tactics. This can be a much better alternative to a full-time CFO who will either demand a substantial salary, or equity.

Find Out More

If any of these services appeal to you, or if you just want to set up a free consultation drop me an email at brandon@skyviewcfo.com !

I often see business blogs that recommend “top banks” and other financial products for small businesses. Having worked at a bank, and now being a a small business owner, I have come to notice that most of these blogs either fail to recognize which factors are most important to small business owners, or they’re simply paid by sponsors. I mean, they can’t possibly believe that Axos is the best bank for small business owners. But not to worry I am here to the rescue! This post is an unbiased, unsponsored account of which factors you should consider when selecting the right bank for your small business. Hopefully you can take some ideas away, make your own decision and not fall victim to targeted ads that don’t actually have your best interests in mind. Also, you don’t have to be limited to just one bank! It is good to utilize multiple banks so that all of your precious eggs are not in one basket.

1. Accessibility

Even in today’s day and age with virtual banking, it is important to do business with a bank that has real people and has plenty of accessible branches and ATMs in the area where you conduct business. For instance, I work in NYC where there is a Chase on every corner. That makes it convenient for me to pop in to see a banker, or utilize an ATM without having to pay a fee. However, there are plenty of states where Chase does not operate in. Of course, even if I am in NYC but I do a lot of business in Pennsylvania where Chase does not operate, it might not be my best option.

2. Fees/Balance Requirements

Many banks will advertise that they don’t charge any “common banking” fees such as monthly service, checks, wires, and so on. However, for most banks these fees ARE free ONLY IF you maintain a certain minimum balance. Be wary of advertisements from banks that claim to not charge any fees, when they might require you to retain a balance that is beyond your capacity and you’ll wind up paying them.

3. Saving Options

Depending on your business’ cash flow you may be sitting on a idle cash for short periods of time that you can’t put into investments, so it just sits in your bank account. Banks offer different interest rates and some are much more competitive. CDs are a thing of the past as I have yet to see one in the last decade to offer a sensible rate worth locking up your money. Today, there are some banks that offer over 1% APY, which is well higher than most big banks offer (usually in the ball park of 0.4%).

4. Borrowing Options

Whether it’s a Credit Card, a Line of Credit, or a Small Business Loan, it’s easier to borrow if you have a relationship and banking history from the lender. For instance if I have a my checking and savings at Local Bank. They will see how much money I bring in over the course of the time I do business with them. If I talk to my bankers there about my business and they get to know how it functions, when it comes time to borrow money, it is easier to articulate and prove why the bank should loan money to my business at a reasonable rate. It would be much more difficult to walk into a bank without any knowledge of me or my business and ask for a sizeable loan. When considering a bank you want to make sure they have multiple products with real people behind them.

10. UBER – 5/9/19 – $8.10 Billion (NYSE)

Although Uber made this list, it’s IPO was one of the most historically worst market debut’s, posting the largest first day dollar loss in IPO history. At one point investors were valuing Uber at $120 Billion, which would have been the most valuable company to debut on a US stock market, however after the IPO it’s valuation was just $69 Billion. Since the IPO Uber has faced a number of backlashes in regards to their culture and surge pricing tactics. However, its recent acquisitions of Uber Eats and Drizzly have kept the company stable during the tumultuous pandemic during which the company posted huge loses.

9. Kraft Foods – 6/12/01 – $8.68 Billion (NYSE)

8. AT&T – 4/6/00 – $10.62 Billion (NYSE)

AT&T’s successful IPO came just in the nick of time before the dot-com bubble burst. While many tech companies were withdrawing their IPO’s AT&T went with it and raked in a then-U.S. record $10.62 Billion, more than their pre-offer value. Today, it is the third largest wireless provider in the world behind Verizon and T-Mobile. Yeah, I’m surprised they’re behind T-Mobile too.

7. Rivian Automotive – 11/9/21 – $11.93 Billion (NASDAQ)

The youngest company on the list (sorry for the spoiler), Rivian Automotive designs and manufactures electric vehicles and related items and services. With an IPO share price of $78 they raised close to $12 Billion. Their debut day on the market was remarkable as shares ended the day at $100.73 giving the company an astronomically high valuation of $86 Billion, which is more than Ford’s market cap at the time, which is one of Rivian’s main financial backers. Make sense? Well, no it doesn’t as todays Rivian’s shares are trading around $26 giving them a market cap around $24 Billion less than 35% of their opening day value.

6. Duetsche Telekom – 11/17/96 – $12.03 Billion (NYSE)

5. General Motors – 11/17/10 – $15.77 Billion (NYSE)

4. Facebook – 5/17/12 – $16.01 Billion (NASDAQ)

Although Facebook ranks #4 on the list, and still has the record for the largest IPO ever on the NASDAQ, the stock had a tumultuous debut day on the market following as shares dropped significantly on opening day and plummeted nearly 40% in the first several months. Part of the growing concern among investors came from the fact that 57% of the shares sold on the IPO day were from Facebook Insiders. Finding itself in the midst of numerous scandals and PR crisis’, Facebook (now META) has done fairly well for itself, some might say.

3. ENEL SpA – 11/1/99 – $16.45 Billion (NYSE)

2. VISA – 3/18/08 – $17.86 Billion (NYSE)

1. Alibaba – 9/18/14 – $21.76 Billion (NYSE)

Alibaba made the strategic decision to go public on the NYSE despite being the Chinese rival to Amazon. Not only did they do that, but they did it on the NYSE instead of the NASDAQ, which traditionally is used for tech companies. However, many believe they were skeptical over the handling of Facebook’s IPO on the NASDAQ. Since it’s IPO Alibaba has experienced tremendous exist and currently has a market capitalization of $278 Billion, ranking it the 25th most valuable company in the world by market capitalization.

Sources

https://www.investopedia.com/articles/personal-finance/111015/story-uber.asp#:~:text=Uber’s%20IPO%20was%20one%20of,dollar%20loss%20in%20U.S.%20history.

https://companiesmarketcap.com/

https://www.renaissancecapital.com/IPO-Center/Stats/Largest-US-IPOs

The other day I was scrolling through my Instagram feed and noticed a post from an “investor-influencer” account. It read, “Hustling my way up the corporate ladder made me my first $100K, working in tech was my first $1M, building a real estate portfolio made me my first $10M, investing in crypto will get me to $100M, don’t doubt what hard work and consistency do.”

There’s a lot to unpack here. While there was probably no malicious intent, the ripple effect this “influence” could have, may lead to serious repercussions for the young audience consuming it down the road.

The post was made by Richard Garcia, an influencer with more than 315,000 followers on Instagram. He appears to be a successful business man and investor. According to his website, Garcia began his career working in finance, then moved to tech where he worked for notable companies like Google and Tesla. He also claims to have a real-estate portfolio of $8M (just 20% off from what he said on his Instagram post). Richard, if you’re reading this I believe you worked very hard to make it as far as you and I mean no disrespect, but I do caution against posts like these, because they can be very easy to misinterpret the actual hard work you put in to arrive at your success.

What jumped out to me immediately, as I’m sure it did for most of you, is that the post appeared to start off as a realistic tale of personal and wealth growth, but then it suddenly takes a sharp turn down a road built on the hopeful need of perpetual rising crypto prices. Taking $10M and turning it into $100M is quite the return on investment (ROI), and it accounts for 90% of the wealth created by Richard’s “hard work and consistency” theory.

While it’s plausible for certain cryptocurrencies to eventually be worth 10x their current prices, that ROI requires the least amount of effort compared to all of the other activities Richard listed. In fact, making an investment in crypto (with no research) doesn’t require any work, just money. Therefore, someone reading this post could say, ‘well if I can just skip to the investing part and I can get a 10x ROI, I can just skip the hard parts of Richard’s journey and still make a lot of money.’ However, those steps were important for Richard’s development, as they provided him with the capital to invest, as well as his business/investing knowledge and experience.

This is not an anti-crypto post. As a matter of fact, I do believe that cryptocurrencies (in one form or another ) will indeed be the future of monetary transactions across the globe. However, it is impossible for anyone right now to be sure as to what that one form (or another) will be. Maybe it’s Bitcoin or Ethereum that eventually become a universal dollar, or maybe it’s something that hasn’t even been invented yet. The upside for investing in the potential future of the global economy has brilliantly high ceiling, however, unlike investing in a blue-chip stock, it comes with a pitiless downside risk. The dangerous “Crypto-is-the-future-no-ifs-ands-or-buts” attitude can lead to something very similar to what most Gen-Zers are too young to remember: the 2008 Global Financial Crisis.

Richard is not a Gen-Zer, he’s a millennial like me, but I’m sure a large portion of his following are younger. If you are younger than me or Richard, or you want a good old reminder of what happened, I’ll give you a very brief history of what caused the The Global Financial Crisis of 2008:

In the early to mid-2000’s, following the economic resurgence from the dot com bubble (we’ll talk about that another time), house prices were rising exponentially year after year. If you bought a house in 2002 for $300,000, you could have sold it in 2005 for $700,000 (these aren’t actual numbers or percentages but it’s about the concept). Even if you didn’t have $300,000 or any potential to make that, a bank would happily lend it to you (even if you had terrible credit). Millions of people took out these loans known as adjustable-rate mortgages (ARMs) with the notion that, although they wouldn’t be able to pay it back if they kept the house forever, they could sell the house within a few years and stand to make a substantial ROI. And they did… until they didn’t.

In order to sell that house for $700,000 there must be a buyer who believes that the price of that same house will continue to rise and be worth $1 million in another few years. But what happened when that sentiment died down and suddenly the buying market wasn’t as bountiful? The person who took out the $300,000 loan got stuck with a house they couldn’t afford, and a bank who wanted their money back. So what happens to banks when most of their customers can’t pay them back? They can’t lend out anymore money. This further accelerated the dwindling amount of home buyers. What a lot of consumers start going bankrupt? They liquidate their other investments (stocks). That’s when the market crashes. While I skipped over a few major details, this brief history lesson is a description of a familiar market phenomenon known as a bubble. Once the vast majority of people were stuck with homes they both couldn’t afford nor sell, the growing bubble of housing prices burst and created a tsunami over the global economy.

Now let’s think back to our friend Richard’s post. Although he may not have meant to say this, his words can be interpreted by a young audience, naïve to bubbles, as ‘hey put your savings into a crypto investment and then one day you’ll be able to sell it for a lot more money and be rich like me (but also work hard)’. This could be true for a certain time period, but what happens when an entire generation too young to remember the effects of the housing bubble all have the same bullish sentiment that they can buy crypto and eventually sell it to someone else for a steep profit in the future? A bubble grows. And what happens to bubbles that grow and grow? They burst. And what happens when bubbles burst? Yup, the tsunami thing.

So let’s take our average Gen-Z investor who sees Richard’s advice and says to themself, “well if I can make 10x on my crypto investment, why would I even subject myself to the struggle of climbing a corporate ladder when I can generate way more wealth by not even working?” Maybe that person passes up on a $100K job opportunity which Richard worked so hard to achieve. Instead, to make that $100k, they take all $10K of their savings from their summer internships and jobs from college and invest in crypto. This act alone has multiple ripple effects on the economy. For starters, it becomes harder for a company like Google or Tesla to hire talented young minds like Richard, because all of a sudden it isn’t worth it for them to take the job. Eventually those company’s begin to incur larger labor costs in order to entice skilled workers to come work for them. Suddenly it becomes way more expensive for Google and Tesla to keep innovating at the same level of profitability, and technological advancements in general begin to slow down. Not only that, but as these major company’s bottom lines begin to fall so do their stock prices. What happens to the older investors in those blue-chip stocks (like ya boi)? Their wealth begins to dwindle as well.

With a declining market, it becomes harder for people even younger than our hypothetical Gen-Z investor to generate that initial $10K of savings. There are fewer stocks for them to invested in, and there are fewer jobs for them to get (because the company has to pay more for the experienced workers, they have less money to pay entry-level positions). Not only that, but the local restaurant owner doesn’t have enough money to offer that kid a waitering job for the summer. All of a sudden when Gen-Z-investor-person looks to sell their crypto assets for $100K, there aren’t any of the buyers that Richard said there would be. No cap. As a result, this investor lost out on creating self-value by passing up on working for an innovative company out of college, AND has lost all of their savings. Now imagine a whole generation of people like this: broke and jobless. What happens to the economy then? Tsunami.

I hope I’m wrong; some of my exes would probably agree that I often am. While I understand the general concept of cryptocurrencies, I am far from an expert. I am also not an economist either (I just read a lot of their books). What I DO have are two eyes and history to refer back to. As I look at these patterns of the past and see posts like Richard’s, I worry that the unleashed Crypto bullish investors of Generation Zed can unknowingly be led down a path to creating a bubble that can burst one day and send the global economy back under water.

Allow me to reiterate that I definitely can be wrong (and so can Richard). That’s why I’m invested in crypto myself. Before you start laughing, let me tell you that it only accounts for roughly 5% of my total investments. If Richard is right and it 10xs, I’ll be pretty happy (and will probably be called a dumb millennial by Gen-Zers (at least I’m no boomer though right?!)). On the contrary, if the whole tsunami thing happens I’m more diversified than the poor Gen-Z kid who sunk all of their savings into it. Who’s laughing then, huh?

The point being: I don’t want to dissuade you from taking risks, but when it comes to investing in new/unpredictable advancements in technology, take any advice (including this) with a massive grain of salt and do your own research before you put your entire financial stability on the line.

Spring ahead, but no more falling back? Changing clocks twice a year could soon be a thing of the past.

I feel that my future grandkids will think I’m insane when I try to tell them that we literally just changed the time twice a year. (That, and actually manually driving cars powered by gasoline which was the cause of many wars).

On March 15th, the Senate unanimously passed a bill that would make daylight savings time permanent in 2023. The next step is for the house to aprove it in order for President Biden to sign it into law, and all signs are looking like this will be a bipartisan* passing.

*Bipartisan means both parties agreeing on the same thing, yes, it’s a real thing.

If you’re a normal person, you probably hate daylight savings. Changing the clocks is not only annoying but messes with your sleep schedule. Look me in the eyes and find me someone who likes when it gets dark at 4:00PM.

However, it’s not just me ranting and complaining. Research actually does prove that the elimination of this semi-annual nuisance could prove beneficial for the economy.

Although previous studies found that very few businesses get a sales boost from shopping and spending during the later daylight savings time hours, there are certain industries that do see a benefit. Specifically, businesses that specialize in outdoor recreation realize more demand while it is light outside. Duh.

But aside from the few businesses that will see a gain in sales, the bigger economic gain will likely come from eliminating the worker productivity levels that drop as a result of the clocks changing. Studies have shown that most Americans lose an average of 40 minutes of sleep in the spring when the clocks change. This lack of sleep contributes to a decline in productivity in the days that follow. According to some estimates, the dollar value tied to this loss in worker productivity equates to more than $400 million each year.

But it’s not just losing the hour that leads to a lack of production. Adding an hour back in the fall also has leads to an 11% increase in depressive episodes, which contributes to a loss of productivity as well.

References: https://www.gobankingrates.com/money/economy/daylight-savings-time-become-permanent-economic-benefits/

As a small business owner, rapid inflation can be detrimental, but there are some ways to combat some of its negative side effects

Buy In Bulk

In periods when inflation is rapidly rising, the main notion is that something today will be a lot more expensive tomorrow. Therefore, as a business owner, if you are sitting on some free cash, you would be better off buying more supplies or raw materials than you normally would, because they will end up costing more as you continue to wait.

Raise Your Rates

If the price of everything else is rising, your products/services should too. Of course, you want to be wary as you do. Depending on your industry or clientele you may not have the luxury to raise your prices and maintain demand.

Fill Up Your Tank

If you travel by car a lot to conduct business, you want to fill your tank up as much as possible even if it is not empty. Gas prices are continuing to soar, especially with the escalating Russia-Ukraine conflict. By buying gas before you need it you are staving off the more expensive prices that will continue to rise in the near future.

Earn Interest

While it is best not to sit on cash, as rising inflation will continue to lower its value, banks tend to pay more interest on savings accounts when rates are high. Compare your bank account’s APY with other options and make sure you are getting the highest interest reward possible on your idle cash.

Utilize Freelancers

As inflation rises, so does the cost of living. As the cost of living rises, so does the cost for labor. If you are trying to expand but find it too expensive to bring on full time employees with high salary demands too large for your budget, an alternative is utilizing freelancers and independent contractors to fill in the gaps. For example, instead of hiring a full time bookkeeper for $60,000/year you can hire a virtual CFO… like Skyview… for as low as $150/month.

Imagine you are negotiating a raise with your manager…

They look at your proposal and say, “sorry, you’re a great asset to us, but this raise would put us over our salary limit for the company.”

And you respond, “but the company has enough money to give me this raise?”

“…yes.”

“And you believe I’m worth it?”

“Without a doubt.”

“But you can’t give me the raise because there’s a salary limit?”

“Yes, but it’s not our company’s policy, it’s the industry’s. Every company in our industry has to abide by the same limit,” they say.

You consider your options. “So, I could either stay here and make less money than we both know I’m worth, or I could find another company with more salary ‘room’?”

“That’s right, except there are only about 30 other companies, and only about 5 of them have enough room for this type of salary”

“I see.”

“Oh and they’re located in very random places across the country. Milwaukee, Indianapolis, maybe Utah?”

“Okay…”

“But even they probably wouldn’t want to pay you.”

“So what can I do?”

“Sign this deal.”

End scene.

While professional athletes are known for signing astronomically high contracts, they are subject to scenarios like this one.

Collective bargaining agreements known as (CBAs) are agreements between player organizations of professional sports leagues and the team owner’s. You may have heard the term “lockout” before, and that is what comes when the two sides can’t come to an agreement on a new CBA prior to the expiration of the one in place. Currently, the MLB and the MLBPA have not agreed to a new CBA and are facing a potential lockout, as their current CBA is set to expire tomorrow, 2/28/2022.

Baseball is unique to the other sports in the sense that it does not utilize a “Salary Cap”, however under the previous CBA if team payroll went over a certain amount, they were financially penalized with a “luxury tax” penalty. The NBA & NFL both utilize a salary cap that is derived from a certain percentage of the league revenue, while the NHL utilizes upper and lower “limits” for their salaries (very similar to a Salary Cap).

Let’s take a look at how the salary caps (and limits) are calculated for these three leagues, as well as how the luxury tax was assessed in the expring MLB CBA:

The NBA (2017 CBA)

Calculated by multiplying projected “Basketball Related Income” by 44.74%, subtracting projected player benefits, and then dividing the result by 30 (the amount of teams).

The “Minimum Team Salary” is the minimum total team salary that a team must have for a Salary Cap Year (90% of the Salary Cap).

NFL (2020 CBA)

The NFL breaks up their revenue into three different categories and assigns a different percentage for each awarded to the players, which they refer to as “The Player Cost”. According to the current CBA, The “Player Cost Amount” is be calculated by the sum of 55% of projected League Media Revenue, 45% of projected NFL Ventures/Postseason Revenue, 40% of projected Local Revenue, and 50% of the net revenue for new line of business projects, less 47.5% of the Joint Contribution Amount (amount contributed to retirement and benefits).

NHL (2020 CBA)

During the 2020-2021 season, the limits were set at the following amounts:
• Upper Limit = $81.5 Million
• Midpoint = $70.9 Million
• Lower Limit = $60.2 Million

According to the CBA, the Upper Limit increases if “Hockey Related Revenue” surpasses $3.3 Billion.

MLB Luxury Tax

Each year, clubs who carry payrolls above a threshold are taxed on each dollar above the threshold, with the tax rate increasing based on the number of consecutive years a club has exceeded the threshold.

A team’s Competitive Balance Tax figure is determined using the average annual value of each player’s contract on the 40-man roster, plus any additional player benefits. Every team’s final CBT figure is calculated at the end of each season.

In 2021 the threshold was $210 Million Dollars.

Now with all these restrictions in mind, let’s look at how the average player salaries looked during the 2019-2020 season:

As we see here, of the 4 major sports described above, it looks like the NBA players get the best deal, but this is largely due in part because they have the fewest amount of players on each team.

Now, let’s take a look at the 20 largest sports contracts in America:

Despite the NBA having the highest average, only two of them made this list which has 15 different MLB players on it (A-Rod twice). While the MLB system is definitely far from perfect, it is closer to real world scenario than the other sports as despite making half the annual average revnue as the NFL, their best players dominate the top of this list. Probably, because there is no “hard” cap on the salaries they can offer, allowing them to go “all in” on certain players, while the other league’s are bound by these hard limits.

Anyways, the point of this is not to throw a pity party for billionaire athlete’s, but just to say that these salary limits the league’s get away with imposing on their players goes directly against the American idea of free trade, market value, and basic anti-trust laws. Each of these leagues, essentially operate monopolies, generate billions of dollars, and use their monopolistic authority to control how their employees are compensated.

And yes you did read this right, Robinson Cano has a $240 Million contract.

That’s right! As you might be able to tell, I’m an avid writer and have enjoyed using The Skyview Scope as my creative outlet while I navigated not just the launch of my own company, but assisting over a dozen business owners as they set out to start their own companies. While, my business is less than a year old, and I am far from an “expert”, during this short time I have encountered many valuable lessons, spoke with successful entrepreneurs, and watched a lot of business movies and TV shows.

Sky’s the Limit: Navigating a Business Launch is a business help book comprised of tips, instructions, things to consider, and cautionary tales to be mindful of when launching a business. It will be available for purchase on Amazon starting March 1st.

Please fill out this form if you would like to pre-order a signed copy!

No payment necessary until the book is available for purchase.

Starting a business is like setting out for a long road trip. Before you begin, you need to pick out a car. The right car. Since you are the driver, you have to be comfortable in the vehicle you choose to operate.

Think about the last time you bought or leased a car; what did you consider? Cost? Down payment? Gas mileage? Horsepower? Aesthetic? Safety? These are all (to some degree) the same aspects to consider when deciding what kind of business you want to run.

As much as I would love to buy myself a Lamborghini, I don’t have the funds for it. Not yet at least. Go buy some brand new Skyview Merch. Anyway, just like a Lamborghini, I can’t simply sink money I don’t have into a start-up with initial expenses (the down payment) that are too high, coupled with ongoing maintenance fees that would continue to bleed me dry. Also, as someone living in Manhattan, it would not make sense for me to even own a car in the first place. There are other methods of transportation that are better suited for my lifestyle. Even if I had enough money to buy a Lamborghini, in Manhattan, it would make more sense for me to hire a luxury car service. Thankfully, I’m not faced with these dilemmas yet. I just ride the Covid-infested subway for now.

If you’re starting a business, the odds are that you already have an idea for the type of car you want to drive. But before you commit, you still want to make sure that it’s the best fit for you to maintain your lifestyle and reach your destination. If it gets poor gas mileage, if it’s unsafe, if it’s pink, you probably will want to consider other options. 

The good thing about cars is that if they breakdown, they can often be fixed. Along your journey you may need to change a tire, fix a broken muffler, change the oil, and so on. But even if you start driving and realize the car isn’t right for you, you can always turn around and restart you journey with a better suited vehicle. Of course, you’d rather make that decision 5 miles from where you departed as opposed to halfway across the country. BUT just because you start off driving with one car, doesn’t mean you have to commit to it for your entire life. In fact, one day you might even be able to buy a Lamborghini….

In the late 1800’s, a young engineer left his job at the Edison Illuminating Company to start an automobile company. After receiving praise and encouragement from Thomas Edison himself, he took his talented mind and exceptional engineering skills to begin a new chapter. However, the engineer’s company was not able to produce the sort of vehicles at the price and quality he intended, and it quickly failed. Instead of walking back to Edison with his tail between his legs, he designed a new car: A race car. It was a work of art that captured the attention of many players in the industry.

The success of the race car gave the engineer another chance at launching a new automobile company. The mission was to provide an affordable car for the average American (at the time, cars were a mere luxury for the rich). The engineer, however, had trouble shifting his focus from racing cars, where he was seeing success, to everyday cars. His financial backers grew impatient with the stagnant sales. The engineer decided to leave the company after many conflicts with the financers. That company was the Cadillac Automobile Company and was purchased by General Motors in 1909 for $4.75 million (approximately $145 million adjusted for inflation).

On his third attempt at starting a company, the engineer finally found his groove, and was able to finally focus on producing an affordable car. He and his partner leased a factory from two brothers, John and Horace Dodge. After a few rocky years, they were able to build and replicate the type of inexpensive car the engineer had envisioned. It was the first car to have its steering wheel on the left side, the entire engine and transmission enclosed, and a suspension using two springs. I don’t know much about cars, but apparently this was a big deal. It was very simple to drive and, when it debuted in 1908, it only cost American’s $825 (roughly $23,750 adjusted for inflation). About ten years later, a majority of Americans learned to drive with using this specific model, due to its affordability and simplicity. 

If you haven’t guessed by now, the name of that design is the Model T, and the engineer was Henry Ford. Despite Ford being a huge anti-Semite and documented scumbag, his persistence and development of the Model T, and eventually the assembly line, are two of the most important contributions to the industrialization of America. 

Ford had many ideas but was considered too volatile to be the president of the company that bore his own name. However, the Model T was led to his unfathomable success. Had he quit after the failure of his first few concepts and sidetracks, who knows how long it would have taken the country to develop a car ready to get America on the road. 

When starting a business, it is important to keep in mind that your initial model might not be the one that leads to your ultimate success. Customers may respond differently than you anticipate, it may be harder to pull off than you expect, but that doesn’t mean there won’t be opportunities to receive feedback, adjust your offerings, and come up with a viable solution that can get you where you want to go. 

I’ve always had the entrepreneurial spirit. At Syracuse, I sold T-Shirts that said “Beeracuse”, clever I know. I had many ideas which I never pursued that ended up becoming real companies like BuzzFeed and Fanduel. Don’t believe me, I don’t care, but it’s true. The year before I launched Skyview I had another brilliant idea, or so I thought. The premise was to essentially be able to send gifts to your friends as easy as you would send a Venmo or PayPal. Instead of sending money, you could send a gift without needing the recipient’s address, just their username. The name? Giftmo. Seriously, stop calling me clever, I’m blushing. Before I sank real money into it, I reached out to some of my old professors at Syracuse, who told me that they thought it the idea could have potential, but I better gauge the market first. I did a few surveys, which confirmed my thoughts, but after looking further into the industry I found other apps that offered a similar concept, although not the same. However, I concluded that it was too much of a risk and would require a complicated launch in order for me to be willing to leave my job and give it my all. Although Giftmo died, my desire to run my own company did not. I turned around the Giftmo car, dropped it back at the dealership, and bought the Skyviewmobile.

To be successful on the road, you want to make sure that you get in a car that is right for you. You want a vehicle that you can feel comfortable driving. However, you won’t get a true feel for it until you’re cruising down the highway. Maybe it doesn’t drive as you expected. There’s no shame in getting a new car if your first model isn’t right. I learned a lot from trying to start Giftmo which I can attribute to Skyview’s early success. Sometimes you need to change your vehicle to complete your journey. Or in Ford’s case, design one.

Answering the Tough Questions

If you look online, you’ll find many different structures for a business plan but they all essentially contain the same key information and answer four important questions: What’s the goal of your business? Why will it be successful? How will you make it successful? And how much will it cost to operate? Any coherent business plan answers ALL of these questions. In this article I outline all of the key sections you want to make sure are covered and what to consider while writing them…

Section I: Company Description

The Mission Statement

The first step in writing a business plan is to come up with a convincing mission statement. The first of the four questions: what is the goal of your business?

A mission statement is simply more than, “We sell clothes online”. It’s your MISSION; how will your business improve the lives of your customers? So, let’s try it again. Let’s say your business is, indeed, selling clothes online. A good mission statement may sound something like: To enrich the lives of young women by providing them with high quality clothing at affordable prices. 

The Executive Summary

The executive summary is the first real paragraph of your plan, but should be the last thing you finalize. Now that you have a mission statement, you can use it to develop your executive summary which is an elevator pitch on how you plan to achieve your mission. The summary should answer all of the four major questions and how you plan to achieve the answers. While the executive summary should be the last thing you finalize, you should start with a rough draft to give yourself an outline for the rest of the plan. You can go back and keep changing it as you work through the rest of your plan.

Basic Information 

The easiest part of the plan is writing the basic facts about your business: address, email, phone number, hours of operation, type of corporation, etc.

Industry

Analyzing your industry may sound like a tall task and very time consuming, but it is an important step in creating your plan, nonetheless. The more research you do, the more prepared you will be, but all business won’t require a super in depth analysis. 

At a minimum you’ll want to identify all the industries you’re in as most companies are in more than just one. For instance, while Skyview is in the small business consulting industry, it’s also in the financial services industry and the online blogging industry, amongst others. You’ll want to identify key trends in the industries as well as looking at established companies that have been successful in the field. Lastly, you’ll want to focus on where there is room for opportunity, hence why your business can find it’s entry into it. 

S.W.O.T Analysis

One of the first things they teach in any business school is how to perform a S.W.O.T analysis: Strengths. Weaknesses. Opportunities. Threats. Performing a S.W.O.T. analysis helps you begin to answer the second, and perhaps most difficult, question: why will your business be successful?

Strengths – What will your business excel at? What is it’s specialty and core competencies? What sets it apart from the established players.

Weaknesses – What are your obstacles? What will you need the most help with? What can prevent you from executing your plan?

Opportunities – You’ve identified this in the industry analysis, but reiterate the opportunities your business will focus on seizing upon specifically withing in the industry on a micro level.

Threats – Similar yet different than weaknesses, threats are things that can jeopardize the feasibility of your business in the long run. These are more macro ideas like general shifts in technology, change in consumer behavior, workforce availability, a GLOBAL PANDEMIC, etc.

Section II: Products & Services

This is pretty self explanatory, but listing out all of your products and services can help jog your memory and come up with other ideas on what you can offer clients.

Section III: Marketing

Positioning/Niche

This right here is the most important part of your plan, answering one of the major questions of the plan: What sets you apart? Your niche can change over time, but in order to begin you want to focus on a segment of your industry you want to focus on. Ideally it’s one that is currently in need of businesses like yours, or often gets overlooked by the major players. For instance, my business is financial consulting, but due to my expertise in camping, I have a focus on summer camps. There are not too many firms like mine that specialize in camps so when camp owner’s stumble upon me, I am more likely to get their business as opposed to another firm that has little experience dealing with camps. Carving out a unique niche and a plan to target a unique set of clients will answer, why your company will be successful.

Target Customer

Now that you’ve identified your niche, specifically state the exact demographics of your target customer. What are their ages? Gender? Nationality? Profession? And so on.

Competition

Another self explanatory section, here you want to identify who your main competitors will be. But think outside the box, a competitor does not have to necessarily be in the industry, they just need to be an alternative to your products or services. For example, Netflix famously states that sleep is their main competitor.

Whatever you do, Do NOT say that there is no competition. There’s AWLAYS competition. If you show your plan to a potential investor and they see that you think you won’t have any competition, they will laugh you off and assume you have no idea what you are talking about. You’re starting a business after all, don’t be naïve.

Marketing Plan

This is a section that changes over time, but is important to think about before you launch. You’ll want to come up with a preliminary budget to spend on advertising, where you’ll advertise, and how often. 

Pricing

What is your initial pricing strategy. This evolves overtime, but you need to start somewhere. If you want to put in more due diligence, you can run a market analysis via surveys to your potential customers to see if they’d be interested in your services and how much they’d be willing to pay for them. This also determines your intended position in the market place. Whichever price point you decide to start with, try to avoid negative words like “cheap” and “expensive”, but rather use more flattering descriptions such as “affordable” or “high quality”.

Section IV: Operation Plan

Initial Operation

Your business will look much different in the early stages than it will later on, so here you will describe how you intend to get the business off the ground from an operational standpoint. 

Specifically, you’ll want to discuss any partners/partnerships you have, where you’ll be operating from, who’s responsible for what, and other specifics, such as hours of operation and intended hires.

Expansion

While this may seem like putting the cart before the horse, it is important to think about how you’ll expand when the day comes, because that’s the goal. Going into your business blindly without thinking of an initial expansion plan can lead to some missed opportunities. You’ll want to go over key positions you plan to add once you have more cash and opportunities for hire, what sort of capital requirements you’ll need in order to expand, as well as touching on your advertising plan for expansion.

Management & Organization

Here is where you specifically state who the members of your team are, as well as their qualifications. You’ll also want to list any advisors or partnerships you already have such as business consultants (cough cough) accountants, lawyers, industry experts, etc.

Section V: Start Up Expenses & Capitalization

Now we’re really getting to the meat and potatoes of how this whole thing will start, and what it will take. Consider all of the expenses you’ll need to get off the ground. In terms of capitalization, how will your business be paying for the startup expenses? Are you self funded or will you need outside investors? If the answer is the latter, you’ll want to be very specific in this section as those potential investors will be the main audience for the plan itself, and this is the information they’ll care most about: how much of their money do you need and what for?

Section VI: Financial Plan

My favorite! What can I say? I’m a numbers guy. This section includes two important forecasts: Your 12 month cash flow forecast and your 3-5 year profit and loss forecast. Of course, this question addresses the last main question: How much will it cost to operate?

Cash Flow Forecast

As I mentioned in a previous article, your cash flow represents the wheels of the car that is your business. Forecasting can be very difficult due to the infinite amount of unknowns that lay ahead. But it’s okay! This is just an estimate that is necessary for, not only you (to see if this plan can actually generate money), but for potential investors (for them to visualize how much money can be generated with the specified amount you are asking for). 

The forecast represents both the money coming in, which can be in the form of investments, loans, grants, and revenue, as well as the money going out, which can be in the form of expenses, capital expenditures, and distributions (dividends). 

There are four important numbers that must be included in the forecast: starting cash for the period (how much self-funding and investments will you start with), incoming cash, outgoing cash, and ending cash for the period.

Profit and Loss Forecast

Like the cash flow forecast, the profit and loss is another rough estimate of the money your company will be generating however, for this, you’ll want to predict a little farther into the future. You can go up to five years, but keeping it at three is more reasonable, in my opinion, as most startups are a completely different business five years down the road compared to when they first start. Unlike the cash flow forecast, the profit and loss forecast focuses solely on that: profit and loss. How much will you do in sales, and how many expenses will you have during your first three years. Make sure to consider your costs as you expand (while your revenues may be growing steadily, your costs for expanding my be more significant).

Appendix

Make sure to include any sources or graphs you alluded to in your plan in this section. You don’t want to be accused of plagiarizing before you’ve even started!

If you are looking for help writing a business plan, you’ve come to the right place! Schedule a free consultation here to see how Skyview can assist you in creating a comprehensive plan that will help you present to potential investors!