Week 1: December 6th, 2014

December 6th, 2014 Lately I have been reading Good to Great by Jim Collins. Collins and a group of researchers decided to embark on a quest to see what differentiates good companies from great ones. Collins and his team created a list of companies that they noticed went above and beyond expectations year after year, and tried to see what made them so great. In the first section of the book, Collins mentioned a few key characteristics that these companies had that surprised me. First of all, he said that the first step these companies took is to find great leadership, rather than focusing on the actual idea. I always thought that in order for a startup to succeed, a plan needs to come first for how to make the idea happen rather than selecting leaders. But as I kept reading and thinking about this concept it made more sense to me, since in reality an idea is no good if nobody can make it happen. Another thing that Collins mentioned is that the leaders for these successful companies are usually modest, simple, and very down to earth. This makes great sense since the high-profile celebrity leaders of companies usually advertise themselves to the world, instead of focusing on promoting their companies. I can definitely recognize truly successful companies whose leaders are very down to earth and even unknown sometimes. Even after reading just a small portion of this book I have learned a lot about what lets companies make the leap from being good to being great. I am eager to keep on reading in order to see what strategies I will need to employ one day if/when I start my own company. -------------------------------------------------------------------------------------------------------------- In class, I have been working as the financial analyst/CFO for both the store front and the $200 projects. So far, I assisted my $200 project group in picking an idea (selling bottles with Warriors logos on them) and made sure the final order was within our financial abilities. Before placing the order, I did some calculations to find the optimized amount of bottles for us to purchase in order to maximize our outreach to the BHS market, while making sure we aren’t left with excess inventory. We plan to sell 65 bottles for approximately $8 apiece, which gives us a profit margin of approximately $5.50 per bottle. For the store front project, I helped the group pick out a business model, and suggested ideas for making it happen. We are picking an art business that will serve as a location for kids/teens to work on certain forms of artwork (candles, soap, tie-dye shirts etc…) that we provide them with. They will pay a flat fee for their supplies and space, and in return will be given virtually unlimited time to work on their projects. The idea is that these projects do not take too long to complete, making repeated purchases much more frequent than if it was something long-term such as a piece in ceramics or a painting. In addition to that, I created 5 different financial statements (balance sheet, cash flow statement, income statement, budget statement, and a pro-forma P+L). While only the last two statements are currently required, I believe that filling out the other ones will help us understand how to effectively use our money and how to make the best estimates. I am currently working on calculating and estimating values for each of the criteria on the pro-forma P+L as well as the budget statement. We are also in the process of researching how to make our business model feasible, by understanding what equipment we would need to purchase, and what modifications will need to be made for our facility. In order to create the candles, we will need a system that can heat up the wax (slightly) and melt it so that it can be used to make candles. This week we will finalize the list of equipment and modifications, and get numerical estimates for how much they will end up costing.