The Finance module is an optional one, though most of the companies involved in VeloCITI saw the need to attend and with good reason. Getting the numbers right in business can be a matter of life or death, for the business that is.

We started out with an introduction of what the Finance module will cover in the next few months and I was completely overwhelmed by the amount of business concepts I have either never heard of or never been directly exposed to. It’s all well and good to be a master of your own art, but when you’re an entrepreneur and running your own show you need to be a jack of all trades and a master of a few as well.

So we started out with a few definitions of what Accounting is all about. I found this one interesting, using the word "Art"

“the art of recording, classifying and summarizing in a considerable manner and in terms of money, business transactions, activities and events, which are part of a financial character and later on interpreting the results of the reports”

Keeping Financial Records – Some of the benefits

Keeping financial records is most definitely an art. Having a clear, logical system, one which can be easily analysed later, and from which certain insights can be gained is a skill which must be developed as a necessity. This is a serious weak point for me having always been an employee and not needing to worry about overheads and that type of thing.

Budgeting & Tax Records

Keeping good records helps you budget correctly, helps you easily spot areas you can streamline and keeps things in order for when the taxman inevitably comes knocking at least once a year. Keeping clear financial records is most importantly done for SARS(the South African Taxman) without which you could land yourself and your business in some trouble with the Law. This is an activity which has to be done on a monthly basis. You’ll know when you’re spending too much on entertainment and when and how you might have saved on your telephone budget as well.

Tracking your businesses health

Knowing when money comes in and when it goes out gives you a clear idea of how you’re doing, whether you’re making profit or operating at a loss at any given time. Having the figures on a timeline can also allow you to track if any activities engaged in have resulted in significant gains or losses.

This timeline can be inspected will help should you need to review any inconsistencies in your cash flow as well.

Investors want to see the money

Should you be looking to bring partners on board or to apply for investment, loans etc, having a clear financial history in black & white helps make a case for your business.

How I currently do it

Currently my accounting procedure involves keeping any and every slip, including coffee at Vida which happens quite regularly for meetings. That’s a business expense by the way. My lovely wife then helps me with a beautifully structured excel document she has created which keeps a nice record of our financial activities broken down into personal and business and allows us to create calculations for each type of expense. This has helped in a few instances for me to determine when an invoice was paid or when I topped up my last data bundle for example, so it serves many other functions as well.

Petty Cash

One of the simplest systems you can use to manage your daily expenses is the petty cash float. basically you start out with a box, hopefully one which has a lock. based on your budget for these types of expenses you put some cash in and each time anyone needs to use the petty cash they need to give you a slip of paper with their name, signature, purpose of the cash and amount taken. When they return they hand over the slip and any change. Once all the cash is gone the total amounts from all the IOU’s and the slips should equal the original cash amount.

Accounting Software

My process for keeping records is not sophisticated at all and leaves much to be desired, though it’s a starting point and with the help of VeloCITI I hope to take a step up into the world of Quickbooks or Pastel accounting packages pretty soon. I’ve also been investigating a few open source accounting packages though with the little knowledge I have right now it’s a tough decision to make.

If you’re interested in open source accounting Cubit(made in SA) & Compiere seem like pretty powerful packages for more than just accounting. For now excel is my friend, it will make the transition into an accounting package a little easier than written notes I would imagine. Be sure to back up though.

I’ve got a long way to go in the area of finance and appreciate every little bit of advice I receive along the way. veloCITI 2008 rocks!!!

It’s sometimes referred to as the elevator pitch, you only have a few seconds to convey to someone what you do in a way which uncovers it’s unique characteristics while still being clear enough for them to perfectly understand what you’re saying.

David Murray of Cape Venture Partners hosted an excellent half day session with us taking us through the nuts & bolts of value propositions. We also focused on company names and how these impact the way the market perceives the company.

Describing your company in 10 words:

If you had just ten words with which to describe why people should buy your company‘s product or service, what would you say?

10 words are very few, especially when there’s so much we want to say to those who ask us that all important question: “So, what is it that YOU do?”. Many times we are faced with this question, not only from business people, but sometimes from our family members and friends. If we are stuck for simple words to describe what we do,chances are we haven’t Mastered the art of selling our businesses yet.

So What exactly is a Value Proposition?

Otherwise known as USP or Unique Selling Point/Proposition,it’s a condensed, yet simple and easy to understand expression of what your business is all about.

• It has to be Unique, Different and that uniqueness has to be attractive enough to matter.
• It has to be clear and easy to comprehend with as little jargon if any at all.
• It has to matter to the customer or potential customer
• It has to be a solution to an existing problem. In other words there must be real(or perceived) value in what you are offering or no-one will be willing to pay for it.
• It has to be different in some way to what your competitors are saying in order to make you stand out and be more attractive to the potential customer.

Real world Value Propositions

David took us through a few examples of varying lengths to give us an understanding of how Value Propositions are used in the real world.

Volvo: „For safety-conscious consumers, Volvo cars are the safest (as rated by Consumer Reports) for adults and children, at a price that is 10% higher than the standard GM family sedan.”

Burger King: “Have it your way at Burger King.”

Domino Pizza: “We deliver hot, fresh pizza in 30 minutes or less or it’s free.”

As we can see, due to the differences in Brands and product or service offering, a different approach is required.

Its interesting to note that Volvo has part of it’s Value Proposition explaining it as being 10% more expensive than its competitors. We recognised that though Volvo’s Value Proposition was relatively long in essence the the word which Volvo has worked to own in the consumer’s mind is safety, and it has done a great job of doing this.

We noted that Burger King, though it’s statement is very short it holds alot of meaning in it. The fact that the company’s name has the name of it’s product in it also made a significant difference in helping us understand what it does without needing to know the brand at all. Burger King are also indirectly saying that you don’t get it the way you want it from their competitors. The Value they offer is the freedom to choose the burger you want. It’s all about customisation and choice.

Domino Pizza focused heavily on the service delivery and quality areas which the majority of Pizza lovers have issues with.

• Time it takes to get the Pizza
• Heat & Freshness
• Accountability if the above 2 are not met

Our Value Propositions in the Hot Seat

We engaged in another little exercise where each of the 15 companies was placed on the hot seat in the middle of the room and we had our original Value Propositions which were extracted from our business plans from the VeloCITI application up on the big screen for all to see. One by one we had feedback from the floor and had to give our own opinion of what we had originally written.

Nine times out of ten the response was that from the word go, the VeloCITI sessions had changed our perspectives completely on how we are supposed to be communicating our businesses. This is true for me without a doubt and I have already completely change my concept of what my business is all about. Below is the snippet which was extracted from my own VeloCITI application business plan.

“Nomad-one consulting is an Independent Design & Web Consultancy which focuses on advising businesses and organizations and developing creative and strategic solutions in order to solve business Problems. We use a collaborative approach, focus on networking and building relationships and prefer to promote ethically sound businesses.

It’s already change completely though one or 2 points might still be true. How embarrassing so many ands and and. Nothing too unique as well and quite vague – back to the drawing board then hey!

Value Proposition Homework

We were all tasked to revisit and improve or completely rewrite our Value Propositions to be more in line with what we had learnt on the day.

Doing some browsing around online and seeing what else is being said about Value Propositions I came across the following PDF which asked the question, “Is there REAL VALUE in your Value Proposition?”.

A few questions asked in the PDF highlight what we should be asking ourselves to find the value in what we are offering. It’s worth thinking about and answering on a regular basis.

• What do we do in helping our customers increase their revenue?
• What do we do in helping our customers decrease their costs?
• What do we do in helping our customer increase their profitability?
• What do we do to help our customers better respond to the needs of their customers, to new opportunities that might be presented by their customers, or to threats?
• What do we do to help our customers improve their productivity?
• What do we do to help our customers improve their cycle time/speed?
• What do we do to help our customers improve the satisfaction, retention, and growth of their customers?
• What do we do to help our customers improve their quality?
• What do we do to help our customers improve the satisfaction of their employees?

The Generic Value Proposition

Another exercise was to craft a VP using a generic template similar to the one below found on http://www.goldsbrough.biz

The example they supplied:

“For a commuter who wants to eat breakfast on the train without mess, our Excello BrekkieBar product is a health food, which provides a completely nutritious and delicious breakfast that you can eat anywhere.

Unlike grain bars and breakfast cereals, BrekkieBar tastes like a full English cooked breakfast, but has no fat and no calories, and even the wrapper can be eaten, leaving no waste.

This is because of our unique combination of innovative use of genetically modified foods and bio-engineered plastic packaging, that we have already used to produce a leading product in this market – Excello BrandyMints – the all-in-one after-dinner treat.”

I also found an interesting Value Proposition Design Template which you can download here to guide you through the process of assessing different facets of your offering.

Once You’ve got something going, keep asking the question, So What? It helps to assess whether what you saying matters and whether it’s of any real value. Once you run out of “So Whats” you should have a clear idea of what is important to convey and how to do so.

Once again steer away from Jargon and keep things as simple to understand as possible so it can appeal to a wide audience. Simplicity should not render your VP completely generic though as it still has to be unique enough to get people interested.

See more about What VeloCITI is?

We started off at 9 waking up to cups of coffee and a round of congratulating each other for making it onto the program. It was great seeing the familiar faces from the bridging course 2 weeks ago and re-connecting. I feel this year will unlock some really special relationships and it seems it already has.

We were introduced to Judit from PeerPower, our facilitator and mentor for the day who was later joined by Mignon(PeerPower). I think I can speak for all when I say we were rearing to go and eager to find out what the topic of focus for the day would be.

Introducing ourselves

First off we completed a quick introductions/interview exercise in which we each interviewed one of our VeloCITI peers and had to introduce them to the team. We then focused on setting some guidelines going forward in terms of rules of engagement and how we as a group think we would need to work together to produce the best results within the team over the next 7 – 8 months.

We agreed that in order to participate fully we would need to:

• Get to know each other
• Listen
• Question
• Share our experiences & challenges
• Help each other (peer mentoring)
• Honour the diversity of the group
• Focus on our commonalities
• Not be judgemental
• Be open, interactive and curious
• be constructive in our criticism
• sometimes agree to disagree
• be aware
• not be oversensitive and tip toe around each other
• allow ourselves to be challenged

Some of the expectations we had as a group for the program:

• Gaining Valuable business knowledge
• Gaining soft skills
• building business relationships
• Experience Intelligent business growth
• gain a 3rd eye view – hear others’ perspectives on our biz
• Make friends
• Grow personally

Finding our Core values

Next we were given an exercise which interrogated us on our values and what we deem to be important as individuals. As Mignon and Judit pointed out, business exists within the context of the rest of our lives and not the other way around, so our businesses need to align well with our values or we would be bound to experience conflict.

The questionnaire asked questions like:

• What do you value most
• What do we want our lives to look & feel like
• How do you want people to see you

This was coupled with a speech we were asked to write for our own funeral. These exercises were designed to expose those things which make us who we are and are dearest to us, our Core Values. The importance of knowing ones Values in business cannot be overstated. For me specifically it has driven the majority of the decisions I have made over the last few years with relation to my work and relationships I have formed.

Aligning your businesses values with your personal values makes for a sustainable relationship. A misalignment would ultimately result in conflicted directions between ones personal and business objectives.

For the 15 participants, values were varied and ranged from freedom, independence, balanced lifestyle, collaboration, religion, ethics, the need to make money or to be of benefit to others. We identified CORE VALUES which did not change or at least rarely changed, and aspirational values, which are negotiable and could change depending on the need. The core values are those which will cause us to walk away from something like a business deal, a partnership, a relationship etc.

The Bigger Picture – Defining your PURPOSE

Next we split into groups and discussed what we understood by the word purpose. There were a few angles which came out of the group and we explored the difference in meaning between reason, aim and Purpose, but ultimately we agreed that Purpose was a much more profound concept which related to our reason for existence. Purpose is the motive or driving force and our Purpose is informed by our Values.

The next exercise had quite an effect on me and got us all thinking really deeply about what we do and why we do it. We were asked to define in one sentence what our businesses do.

I said my business unlocks and communicates the real value which companies & organisations offer their markets.

We then had to reply to to this with another question, Why does that matter. and repeating the same question another 4 or 5 times until we reached a point where we uncovered the Purpose behind all of this which was informing our behaviour. My answers became increasing deep and reached quite a profound point reaching deep into the core of why I do what I do.

At this point in the session it was clear that quite a few participants were already focusing on the deeper meaning and purpose behind what their businesses were doing.

Some research which Mignon shared with us from a book called Built to Last by Jim Collins, Author of Good to Great, showed us that companies which were driven by more than just profitability and had purpose informing their actions were thousands of percentage points more successful than their profit only focused counterparts.

Also see – Make Meaning in Your Company – Guy Kawasaki

If you don’t know what VeloCITI is all about, it’s the business incubation program sponsored by local government and run by CITI (Cape Information Technology Initiative). It aims to take start-up technology based companies and grow them with the hope of increasing employment and growing the local economy.

A well known graduate of the programme, Rafiq Phillips was recently seen on Carte Blanche discussing web 2.0. Rafiq made a name for himself with his start-up venture, i-drive and is still out there creating buzz and achieving great things. Other companies like Red Button, one of the winning companies from the 2007 program are making it big with their wireless hotspots.

One of the other winning companies, Silulo Ulutho Technologies received a special award for the difference they are making by providing IT resources and training in Khayelitsha.

Luvuyo Rani, MD of Silulo Ulutho Technologies. Luvuyo started his own business three years ago in Khayelitsha, selling new and refurbished computers to schools and educators in the area, and eventually established an Internet café, training centre and office in a new Khayelitsha mall.

Rani has created employment for eith staff at Silulo Ulutho and currently has 50 fulltime students on his computer training courses. He has featured recently in local news articles and radio stations, and is accredited by the City of Cape Town’s business voucher program to offer mentoring to smaller, emerging businesses.

http://it-online.co.za/content/view/162515/129/

Having been accepted to be part of a program of this nature is a great honour and it shows me that though things may be looking bad on many fronts, alot of good work is being done and Government is playing a role in development.

The Team responsible for taking these young IT companies through their paces comprises of the Project Manager, CITI(Tamzin Martin), The Lecturers/Mentors Cape Venture Partners(Tony Mallum & David Murray), Peer Power’s(Mignon), all Speer headed by CITI’s Executive Director, Viola Manuel.

As those who attended to 2 day bridging course will tell you, we will be interacting and learning from a great team with invaluable knowledge and experience under their belts. They are an inspiring group and have already made a huge impact on all who will be attending the course.

The first 2 days gave us an overview of what lies ahead in the next 8 months. We were taken on a summarized journey through the areas of business strategy, USP’s, Sales & Marketing, Hiring & Firing, Finance and investment and a whole range of other crucial areas of our businesses which will need to be streamlined and kicked into gear in the year ahead.

At the end of the year a few of the top performing companies will stand in line to win some great prizes to further boost their businesses. Those on the course will be given training, mentorship, business resources and virtual offices at the Bandwidth Barn.

All of this is being made possible by funding provided by DTI(The Department of Trade & Industry). One up for the government! They have chosen a wide mix of companies from all different sectors of society and racial groups which I’m sure will create a dynamic environment for the 15 companies throughout the next 8 months.

I’ll be posting about the program going forward and sharing my experiences with you all. As you can see in my previous posting, the program as already influenced my idea of what I need to do going forward.