Decoding Common Business Concepts & Terms

Your idea can be a concept, right? It can be this concept idea. It's not the final idea. It's not the final font, it's not the final colors, website, branding, nothing. It's none of those things. It's the concept. And it's going to get dialed in as you move forward and as you get feedback from the people that you're showing it to, from the people that you bring into your business. Hey, everyone. Welcome back to the show. It's time for another quickie, because there's always time to fit an inspiration. And today I'm really excited about this episode. I hope that it gives you the empowered feeling that it gave me to really arm myself with some of these definitions and ideas that just make me feel a little bit more like I can add to the conversation, like I'm understanding. And you guys know that knowledge is power, truly. I mean, that statement has been around forever, but it truly is the most important thing that you can arm yourself with is to understand. And the only way to understand is to let it be okay when you don't and share when you don't and ask questions when you don't. So if I can tell you my one superpower in business, when I have been in business in the past or starting new businesses or when I first started raising money, it was. I was never too prideful and I never felt too stupid. Don't get me wrong, I did feel stupid, but I never let that get in the way of me asking what something meant or asking for help or asking for clarity. If you don't understand something when someone is explaining something to you, let's say you get the opportunity to be on the phone with somebody who is where you want to be. And if you go through the entire conversation without actually understanding what they said, you just wasted the biggest opportunity of your lifetime. So I'm hoping that, number one, this can arm you with some things. And number two, it also empowers you to just ask every single question, stop people in the middle, interrupt in a really lovely way and say, oh, could you just explain that I don't want to get left behind, or I want to make sure I'm really understanding this. If you can't explain it when you're done, it means you didn't quite grasp it, even if you don't explain it well. Well, if you. If you grasp a concept, you should be able to repeat it back in a way that somebody could understand. So today I want to talk about a couple things. I want to demystify a Business plan. Some of you might be like, oh, my God, this is like basic bitch stuff. And some of you are like, I actually really want to know what goes into a business plan. And to be honest, I've talked to the most successful business people, and a lot of them are like, I never did a business plan or I didn't even know what it was until year five of my business. So no matter where you fall in that gamut, please let it be okay. No matter what you're thinking and no matter what you're feeling. But the first thing I want to say about a business plan is, number one, this is like one of the most Googled questions out there. How do I do a business plan? What is a business plan? Do I need a business plan? And I don't think you necessarily need a business plan unless you are pitching your idea to someone raising money, or you're doing a lot of different hiring. And this is when you really need people to get on board. So you need to be really clear on exactly what your business does. But I do want to say, I do think doing a really basic business plan for yourself can help you dial in exactly what you want to do and get clarity. Now, there is one other time when you needed a business plan, but it's kind of called something else. And that is when you are going to raise money. This is very important that you have a business plan, otherwise known as what people call a pitch deck, that you're going to send to people to show them exactly what is going on in your business. And a business plan and a pitch deck are a little bit different, but there is a lot of the same things within them. So let's start on what is a business plan and what actually goes into it. A business plan is a written document that outlines your business objectives, strategies, market analysis, and financial projections. And it's really important for new businesses if you're bringing on a lot of people, to be able to kind of show exactly what you're going for. So that it's a roadmap to help help the organization, all the people in it, stay on course, right? It's to help them have a plan. So let's talk about that. If you're like, whoa, that was a lot of words that I'm just not super clear on, or maybe some of you are right with me. Number one, the steps to creating a business plan is to conduct market research. What does that mean? It means to go out and look at all of your competitors. It means to go out and look at the people who you think could be doing it better than you look at the people who you think aren't doing it good enough. And you're going to gather that information about your target market. You're going to gather information about the trends that are going on in your particular industry. And like I said, you're going to gather that information on your competitors. Try to gather as much information as possible and put it all in one spot. Number two, you're going to define your business. You're going to clearly state your business idea, what the goals are, what the objectives are. And I also would love to add in there, I think that you should really define your target market, who you really want to be talking to. Again, so defining your business. Number three, you're going to outline your products and services, so you're going to describe what you're going to sell. You're going to, again, talk about your target market and how your offerings are different from your competitors. And you guys, it's probably more important than I'm saying to start a business plan for yourself, just for clarity. So I just want to say, even when I am doing a book proposal, majority of this is the same. So I think getting a really good idea of what this is is important for so much of the pitching that you're going to do in the future for many, many, many different things, like whether you're starting a podcast, whether you're writing a book proposal. A lot of these same things go in a book proposal. So I just want you to kind of get ideas of what people are looking for when you pitch your business. So, number four, develop a marketing plan. Describe how you're going to reach your target market and promote your products and services. Another reason why I think this is good just to do for yourself is to really think about where your people are and what are the actions you're going to be taking every single day in order to talk to them. Sometimes we can get so in the muck, right? Like, sometimes we can get so caught up in the inertia of just trying to do it all that we forget some of the most important things. So, honestly, a business plan is just for you in the beginning, unless you're starting a really big company and for you to reflect and look at and keep up in front of your face so that you know what your target is. All right, Number five, determine your organizational structure, which means to decide on the type of business structure that you'll have and who will be involved. Again, this is for a little bit of a bigger company rather than just if you're going into business for yourself, or maybe there's just a couple of you. But what exactly is organizational structure? It refers to the formal system of authority, communication and roles within a company or organization. And it outlines how tasks, responsibilities and decision making authorities are assigned and kind of how the information is going to flow between those different people and who's going to be able to make those decisions. So let's go to number six, which is create a financial plan. So this is going to include projections for revenue, all of your expenses and cash flow, as well as a break even analysis. Now I want to go through that because for me, the first time I heard these things I was like, what the hell are those things? So revenue projections are an estimate of the amount of money a business expects to earn from its products or services over a specific period of time. And these are based on assumptions about sales volume, pricing and market conditions. And this is interesting because you have to put this in your pitch deck if you are going to raise money as well. And so many people are like, ah, I mean these are like total assumptions. They are, and they're also not. What you're going to do is try to gather as much information as you can from your competitors, from anyone and everyone who's out there doing it. You're going to try to see if you can ask people if you can see what these things are for them, how much are they spending, what are, what is their pricing, all of these things. You can't always get this answer. But a lot of times if you talk with even maybe some different people in financial planning, maybe you hire somebody that you could, you know, that you could just hire on and consult with for an hour or two hours. And what that looks like, a lot of times they'll have a lot of answers around this and this can give you a lot of clarity. So number two, what are expense projections? These are estimates on the costs associated with running the business. It's things such as people's salaries, do you have any rent, do you have utilities, supplies, what are you doing for marketing all of those things? It's like everything that you're spending money on. What could, what are you spending money on right now and what do you see in the future coming that you're going to be spending money on? So cash flow projections. Cash flow projections estimate the inflow and outflow of cash in the business over a specific period of time. And this is used to determine the amount of cash that's available for investing in the business. In the future, paying bills and other activities. And what is a break even analysis? That is the calculation that determines the point in which your business will actually generate enough money, enough revenue to cover its expenses. So in other words, this is the point where the business starts to make a profit. That's called the break even point. And it's calculated by dividing the total fixed cost of the business by the difference between the selling price per unit and the variable cost per unit. Now, understanding the break even point is important because it helps a business determine how much it needs to sell in order to become profitable. So that's the basic way to say it. How much do we need to sell in order to become profitable? So you guys, these were words that in the beginning I was like, oh my God, I don't even know what the hell these people are talking about. I'm so glad that I stopped to either ask or Google. So number seven, this is the final in the business plan. Write the plan out, pull all the elements together, draw it out on a whiteboard, whatever you need, whether you have to just have this completely mapped out. If you're someone like me who's very, very visual, write it out, pull all the elements together into a cohesive, well written document. You guys, if this was a deck for raising money, this would be in like a PowerPoint form that you'd be able to send all over. You would have somebody judge it up, make it beautiful. If that is not your zone of genius, you would pull in a lot of different pictures from other of competitors and different market trends. You'd make it really pretty. You'd try to get as close to the idea of your idea for products that you can have in there. So you want to create images and story around what your product is going to be, even if that's not the real thing yet. Right? You're just, you're painting a picture and you don't have to do this if this is just for you, but it might actually be helpful. And the one thing that I want to tell you, if you do this for yourself, do not get stuck here. This just needs to be a map. It's kind of like, it's kind of like your branding and your logo in the beginning. Please don't get stuck here. When I first was creating light pink, I spent so much time on the branding and the logo only to not even realize that it was going to change three different times before we had anything that we thought was going to go to market, you guys. So be really aware that this first idea It's a concept. You guys ever see concept cars? Like, you go to these car shows, right? Or you see them online and they show these, like, crazy future cars. These are concept cars. This is like the what if of the future. And what actually comes out is a lot more of a realistic, tangible thing that people are desiring. So your idea can be a concept, right? It can be this concept idea. It's not the final idea. It's not the final font, it's not the final colors, website, branding, nothing. It's none of those things. It's the concept. And it's going to get dialed in as you move forward and as you get feedback from the people that you're showing it to, from the people that you bring into your business. So I hope that this helped. I want these things to be a guide, but I don't want them. I don't want you to get stuck here. And I thought that this would be a great spot for me as well to kind of go over a couple of words that are, I think, really important as you are listening to bigger conversations, wanting to grow your business, invest or even raise money. And we're going to go through these fairly quickly. So you can come back to this if you want to learn a little bit more. Or obviously you can Google this. So something that my friend just had texted me is he was like, oh, my God. I was talking to an investor and he mentioned an investor stack. And I didn't know what the hell it was. And I had to giggle because I was like, I just raised money, went through the whole process and I didn't actually know what an investor stack was either. So you. I want to tell you what these things are. Okay? So these are just random words that you might hear thrown around left and right as you're listening to some of these bigger conversations. Or maybe you zone out. But don't zone out for this, you guys. This is going to empower you and help you start to understand some things. So if you're thinking about scaling your company and you need funds, right, you're going to need to raise money. There's a lot of different ways that you can raise money. And like I mentioned, an investor stack. What even is that? Let's just start there. If someone asks you, what's your investor stack or you hear that word, it means different types of investors that a company can have. So a company can have multiple different types of investors. And I'll share a little bit into my company, too. It's based on their investment size. So an investor stack means different types of investors based on their investment size, stage of investment. So when did they come into the business and the type of investment vehicle used. The investment stack is usually divided into several layers including angel investment, venture capital firms, private equity firms, and strategic investors. So what I did is I used angel investors who were also strategic investors. Okay. So they can be both as well. So angel investors are high net worth individuals who provide seed funding to early stage startups. They often invest smaller amounts of capital and they might provide additional support in the form of mentorship or connections. So all of my investors are angel investors and you actually have to make a certain amount of money on your own or a certain amount of money in your household in order to even invest. They don't just let anyone invest into companies. So I had to actually ask if people made a certain amount of money in order to invest. So that's just something for you guys to know that that's what an angel investor is. It's what a lot of startups are made of in the beginning is angel investors. Typically, angel investors are friends, family and acquaintances and people that you get connected to from these other friends, family and acquaintances who have a higher net worth and they are interested in your company and these are the people that you would be sending that pitch deck to or your business plan. Right. Okay. Number two, with the holidays and the new year coming, you probably are looking around your house thinking that you would love to upgrade and freshen up your environment. And there is no easier way to do that than with your window treatments. Nobody covers windows better than Blinds.com. blinds.com brings your space to life in your way. They have free design help. Other retailers may claim to have experts, but blinds.com has spent nearly 30 years building an award winning team of over a hundred design consultants that are ready to help you create your dream space. Always convenient, always tailored to you. Three ways to shop 1. Perfect fit Whether you want to DIY have it all done for you or you're somewhere in between, choose what works for you and rest easy knowing the fit is guaranteed. So the holidays come fast, you guys, and you can freshen up your window treatments fast as well. And unlike some competitors, the price you see is the price you pay. No hidden fees and there's zero pressure. From blackout in motorized options to classic shutters, blinds.com has Windows treatments for every room, style and budget, even shades for your outdoor space. The Black Friday deals@blinds.com are going strong all month long, so don't miss your chance to save big. And as always, our listeners still get $50 off when you spend $500 or more. Just use code earn at checkout limited time offer rules and restrictions apply. See blinds.com for details. 2026 is the year that you launch your business. It's the year that you've become the boss. You become the leader. That idea that you have that has been eating at you forever that just will not leave you alone is going to come to life. Maybe it's something that someone tells you you should always sell or a store you've already designed in your head. And with Shopify, 2026 is when you finally make it happen. Shopify gives you everything you need to sell online and in person. Millions of entrepreneurs have already made this leap from household names to first time business owners. Just getting started you guys. I use Shopify for glossy and I remember when they sent me my little shopping bag celebrating my 10,000 sales and I literally cried because I was so scared to take the leap. And I'm so glad that I did and that I use Shopify. It gives you all the tools to easily build your dream store. You can choose from hundreds of beautiful templates that you can customize to match your brand. Set up as fast with Shopify built in AI tools that write product descriptions and headlines and help you edit photos. So marketing is built in too. You can create email and social campaigns that reach customers wherever they scroll. So as you grow, Shopify grows with you. You can handle more orders, expand to new markets and do it all from the Same dashboard in 2026. Stop waiting and start selling with Shopify. Sign up for your $1 per month trial and start selling today at@shopify.com happy. Go to shopify.com happy that's shopify.com happy. Hear your first judging this new year with Shopify by your side. Venture capital firms. They are investment firms that provide funding to startups and early stage companies. They typically invest larger amounts of capital and they take an active role in management of the companies that they invest in. So they really want a say in the companies when they come in. They want to help guide them. They want to be able to really, you know, say what you're going to be doing in certain areas. So venture capital is not necessarily what smaller or what startups go with right away, but some do. This is usually provided early stage, but maybe not the very beginning. Number three, private equity firms. They invest in mature companies. So these are proven concepts. They have a view to improve the company's operations and they want to Sell it for a profit. So it's a company that's probably already got potential and is doing well. They invest large amounts of capital and they are going to use it. They may use leverage to increase their investment. So what they're going to do is if the company's already doing well, what they're going to do is kind of plug it into their machine. Picture that like they have the networks and the know how to be able to take this company that is doing pretty good and they can pump it up with their money and their network and their know how. So number four, strategic investors. Strategic investors are companies that invest in other companies to gain access to new products, technologies or markets. They may also invest to secure a source of supply or to prevent a competitor from acquiring the company. This one's really interesting because this is obviously a really big game. This is a company who takes the money and wants to acquire another company. If they're like, hey, we want to do this product, but that would mean that we need to figure out the supply chain. We might need to figure out warehousing, we might need to buy all this equipment, or we could buy this other person out who maybe is struggling or maybe we know, wants to sell the company and essentially we could just buy all of their assets and plug it into what we're doing. And we've got more money. Right. We've got more strength. We can kind of just plug in by these companies and gain everything that they had already set up. Right? So that is a really. I just think that that's a really interesting, cool play that someday I would love to be able to do. So I want to just share just quick those first rounds so you understand what they are of investing. What does it even mean when there's rounds? There's a lot of different rounds to investing in a company. Some companies do one round, some companies do multiple rounds. You can raise money as many times as you want. There are some companies who have raised money multiple, multiple times, right. So in my particular company, I am in seed round. I, I may not ever raise again. We're hoping that this is enough money to get us through to where we can be profitable. We could raise money again. It's not totally off of the table. And that's called a seed round. Seed funding, it's the first round of investment for a startup. And that's usually provided by the angel investor's family or friends. Can be venture capital, but that is called seed funding. Series A is the first institutional round of investment for a startup. So it usually is led by venture capital firms and is used to finance further product development, market expansion and hiring. Series B is the second institutional round of investment. So it's technically the third round, but it's the second institutional round of investment in a startup. And series C and beyond. Right? It's kind of just all encompassed, all blanketed in this phrase. Series C and beyond and later rounds of investment are typically used to finance large scale growth initiatives such as mergers and acquisitions, or to provide liquidity to early investors. These rounds are usually led by private equity firms or strategic investors. You guys, this was a really meaty podcast, but I have been really feeling the pull to want to educate anybody who's interested in this at all. Because I can tell you that in the beginning of when I was raising money and when I felt a little bit of a ceiling on my business and what I was doing, it was because I didn't understand what my options were. I didn't know there were options. I didn't know that this language existed in this whole world of people doing these things already ahead of me, who were learning how to fundraise, who were understanding all of this and getting into this world where this is common language and common practice for people, right? And, you know, for you guys to know, like, I, I'm an investor. We've invested in over seven companies. We, I, my God, we might even be 10 companies right now. I'm an angel investor myself. So this is something that if you're looking for money in your startup and you have a great concept, you could be raising money. If you understand what this is, if you have that great idea for a product, to scale your business, all of these different things. So I want to arm you with the language to help you understand the opportunities that are out there that maybe aren't inside of your skill set yet. Because for me, these were not inside of my zone of genius, my skill set, none of it. And I am still learning, like everything that I just told you, I had to Google the shit out of it, even though I know it. I had to get the right words for you guys to share with you so that you could understand. So I'm sending you so much love. Let me know if this was valuable. Send it to a friend. I just want to know if this is something that is making you feel more empowered or you want to hear more podcasts like this. Okay? Until next time, earn your happy. It.