In Praise of the Entrepreneur

Every great product or service had a beginning--a crazy idea, an inspiration, a better way, something nobody else had yet thought of.

99.9% of the population would never act upon such a thought. Most are too busy, too lazy, or too unsure of themselves to attempt the journey from idea to business reality.

Without the courageous few having the insight, the determination, and the energy to turn a new idea into a successful business, where would mankind be?

These few unique and gifted human beings have built our quality of life. They have created jobs for others and wealth for their families. They are the true American heroes.

Performance Sciences helps entrepreneurs transition from great idea to profitable business.

A Great Idea is Just the Beginning

Validation of a new idea requires proof of concept, a working prototype, a test case, or a beta site to show that the invention effectively solves a problem.

Whereas success of an invention demands that it solve a problem, success of the entrepreneur's business requires that an adequate return be earned to repay lenders and shareholders.

Earning sufficient profit to attract investors requires more than just a great product. It requires a solid plan and good execution. It requires an effective and dedicated team. It requires efficient operations and good decision-making. It requires repeat customers and effective marketing strategy. It requires accurate information and sound advice.

Performance Sciences determines business value, calculates needed funding, and develops funding strategies.

Getting Funded

Even in the best of times, getting adequate funding to start a new business is not easy. Investors and lenders know that startups are inherently risky. Not every startup gets funded.

Investors are seeking:

• First mover advantage for an important new product or service
• Potential for long-term repeat sales
• Strong intellectual property
• A skilled and experienced management team
• Barriers to entry
• Superior financial returns
• A compelling business plan

Performance Sciences prepares the plans and documents used to raise funds.

Performance Sciences Planning Process

Our planning process produces the strategies and materials used to mount an effective fund raising campaign:

• A financial model customized to the client's business
• Comprehensive business plan
• Executive summary
• Investor briefing presentation

Typically, the process takes 5-6 weeks to complete, but we often adjust the schedule to meet reasonable client scheduling requirements.

The process creates new insights, better business strategy, and a greater chance of success.

Performetrics™ Financial Model of Your Business

Investors and lenders require pro forma financial statements and supporting schedules. Many startups have these documents prepared by an accounting firm. Unfortunately, in startup situations where everything is on a steep learning curve, these documents are often obsolete by the time they are delivered.

Performance Sciences takes a slightly different approach. We create a custom financial model of your company that allows immediate update of all financial schedules whenever changes occur.

The client receives an electronic copy of the model. Many prior clients continue to use their Performetrics™ financial models for ongoing analysis and annual budgeting.

The financial model shows how much funding is needed and the rate of return for investors.

Financial Model Customized to Your Business

The input section of the Performetrics™ financial model is customized to each business we serve.

For instance, for a concrete additive business, the input section of the model included a formula card for each product. For an IT infrastructure consulting client, the input section included estimates of billable hours for various services.

For one of our more "interesting" projects, an insect control company's revenue model was based upon monthly weather statistics and housefly propagation data for each region of the country.

The customized portion of the financial model is a bridge between your business activities and pro forma financial accounting.

Entrepreneurs can quickly see relationships between operating decisions and financial outcomes.

Reports Generated by Financial Model

• 5 or 10-year annual financial statements
• 24-month monthly financial statements
• Revenue and gross margin detail schedule
• 5-year annual expense budgets by department
• Breakeven analysis
• Capitalization table
• Investors' cash flow and internal rate of return
• Principals' cash flow and internal rate of return
• Valuation analysis
• Bank loan amortization schedule
• Yearly organization roster
• And More...

The financial model provides detailed pro forma statements needed by investors and lenders.

Comprehensive Business Plan

The typical Business Plan includes:

• Investment overview
• Executive summary
• Situation review
• Key issues / opportunities
• Company mission
• Business objectives
• Sales / marketing strategy
• Operational strategy
• Financial and exit strategy
• Organization plan
• Financial schedules
• Contact information

Most business plans are 25 - 30 pages in length. Pictures, graphs, and sufficient white space are used to keep things easy to read.

Your business plan must stand above the hundreds of plans received by funding sources every month.

Executive Summary

A single-page executive summary is also prepared. This document is used by the client when making initial contact with funding sources.

Its purpose is to introduce your project and to get the funding source to contact you for further discussion.

The Executive Summary is the first document used in your funding campaign. It is the "door opener".

Investor Briefing Presentation

Once you have gotten an audience with a potential funding source, you will need an effective and time-efficient way of telling your story.

The focus of the first meeting with a potential funding source is a 10-15 minute presentation that explains the business and highlights the investment opportunity.

Typically we prepare investor briefings that are about 10 slides in length.

We coach the presenter to achieve the most effective delivery.

Building the "Dream Team"

When faced with the choice of a grade A product with a grade C team versus a grade C product with a grade A team, investors will favor the better performing team any day of the week--they can always fix the product.

A company is only as good as its employees. That is especially true for a startup.

Establishing an Advisory Board

An advisory board is a powerful resource for a startup company. Members bring fresh perspective and expert advice regarding matters of strategy and policy.

The best advisory boards are comprised of experienced members who have complimentary skills to the entrepreneur.

Performance Sciences helps startup clients to identify and recruit experienced executives to serve on advisory boards. We also help successfully launch advisory boards, assisting clients with agendas for initial board meetings.

An advisory board brings experience, insight and outside perspective.

Vetting Process

Once all documents have been developed, we help the client to establish a vetting process for the business plan.

Copies of the business plan and related documents are provided to individuals identified by the client, such as advisory board members, commercial bankers, and/or other stakeholders for critical review.

As a result of this vetting process, the client gets an even better plan.

Revisions and rewrites are an important part of our job.

Feedback is part of the process of building the best possible plan.

Risk Analysis

A new business puts funds at risk--money from the Company's Principals, from investors, from lenders, and even credit from suppliers.

Many lenders and investors require key person insurance to reduce their risk in the event that the entrepreneur is unavailable to the business due to death or disability.

The Performetrics™ financial model determines funds at risk at the estimated point of maximum cash exposure. This information helps our clients to mitigate risk through a variety of risk management strategies, including the right amount of key man insurance.

Startup businesses are inherently risky. Risk management can make a business more attractive.

Reducing the Cost of Required Legal Documents

Most clients consult an attorney specializing in business law prior to raising funds from investors. Usually, the attorney will prepare a Private Placement Memorandum (PPM) and an Operating Agreement for the new company.

Performance Sciences has an arrangement with a law firm that specializes in new business startups. If directed by our client, we generate text blocks from the business plan and supporting documents that are transmitted to the attorney for inclusion in the PPM and Operating Agreement.

By streamlining the process, we reduce legal costs for our clients.

We work closely with other professional service providers to reduce costs to the client.

A Package Price --No Surprises

Performance Sciences completes the planning process and provides all deliverables at a fixed cost. The client does not have to worry about how many hours are being billed to the project. Let the hours be our problem.

After all, there are plenty of other things to worry about in a startup business.

How much will it cost? That depends upon the amount of research required, project complexity, and services required. A very simple plan that fits a standard financial model can be done as low as $1,200. Most projects that require research and more complex financial analysis are completed in the range of $2,500 - $5,500. We provide an up front, detailed proposal listing all work to be done at a fixed price. No surprises!

Personal service, a highly experienced consultant, effective documents, and all at a fixed price.