Situation: A young company that focuses on personalized solutions needs to generate near-term revenue to meet expenses. There are also options for debt or equity financing, but the terms for each will equally depend on near-term revenue potential. How do you generate near-term revenue?
Advice from the CEOs:
in terms of the referenceability of early customers. As a new company, the first five customers
define the company to future customers.
- The core values of the company will help clarify how to make early choices.
- Don’t just go for the easiest closes.
a chart of potential customer prospects:
- Segment potential prospects into groups.
- What is the deal model and key value proposition for each group?
- Create a video and communications package to demonstrate the company’s benefit to each group.
are trade-offs between the different deals that the company will pursue:
- Small fast deals are most likely to meet immediate cash flow needs.
- The biggest deals may involve the creation of LLCs. These will involve both more time and additional legal fees.
- Make sure that early deals align with the company’s core brand.
- Consider outsourcing to speed the provision of services to early clients. Build this cost into your billings. Assure that the funds from early deals flow to or through the company. This will improve the financial story to additional clients.
- Consider serving special interest groups. Their potential value is that they work for their passion more than for money. If the company chooses to work with one or more of these groups, assure that customer selection aligns with company values.
- The current focus for near-term monetization is on merchandizing. As an alternative, consider charging a separate fee for the use of company IP. This may give clients additional incentive to utilize company technology to monetize their investment.