As entrepreneurs continue to fuel the growth of registered businesses around the world, our team here at EquaSTART aims to foster a one-stop, world-class destination for the management of documents, banking, and compliance.
By focusing on business creation and agreement simplification, EquaSTART aims to significantly reduce the time and money demands associated with launching and managing an enterprise.
At EquaSTART we strongly support trailblazing business leaders who demonstrate a visionary spirit in their entrepreneurial pursuits. Accordingly, we would like to introduce you to Denver businesswoman Keo Frazier who agreed to be our first EquaPROFILE feature interview.
https://www.linkedin.com/in/keosmarketing/Ms. Frazier is the co-founder of Fractional Executive, a startup firm that endeavors to help small businesses with tight resources propel their strategies and initiatives forward without having to sacrifice or hire a full-time strategic executive. Supported by a collaborative group of women business partners, FE will provide strategy, planning, and execution tactics services to businesses, utilizing easy-to-use systems and templates.
Below, Frazier offers a few thoughts about today’s ever-changing entrepreneurial environment.
On Launching Fractional Executive
In recent months, I began noticing that a lot of people were reaching out to me in the hopes that I could assist them with marketing and strategic planning, things that often require a higher-level executive. But often they can’t afford to hire someone on a permanent basis for their organization. So with Fractional Executive, they can receive all of the benefits they would otherwise have with a full-time executive without the long-term commitment.
On Her Current Work
I’ve been going into companies helping them with very high-level things while being integrated into their team. Once I finish what they need me to do, I step away and then come back to re-evaluate.
On Target Market
We target small companies, sort of the small to growing companies, those companies that really can’t afford to pay someone for a high-level leadership role but they still need some important things done strategically. That’s where it started and where we’re heading.
On Startup Companies
It’s painful to watch business leaders piecemeal their organizations together, whether it be their marketing stuff or their operations. I see a lot of that occurring with different companies and industries.
On Why Focus Is Important
In my view, it’s important to be a master of one thing versus a jack of all trades. Those who pursue the latter often end up doing most of it poorly because things constantly fall outside of their area of expertise. So when starting a company and running it, the smartest CEO’s who are good in a particular area like, say, being a visionary or strategist, focus on that.
On Doing Too Much, Too Soon
I find that small companies think they can do it all and they end up struggling in the first couple of years when the reality is they can’t do it all and, most importantly, can’t do it all well. Fractional Executive was started in part to encourage founders to pursue becoming a master of one thing while allowing other people to pick up the rest.
On Why Business Systems Are Essential
If you don’t have systems in place, things can quickly become a mess with your business. Then you have to frequently go back in and fix things. I see so many companies still behaving like a two-person shop versus a 20 person company. And in a realm like finance or accounting, they tend to do things as if they were a 1–2 person shop versus a full-on small business.
On Compliance Requirements
Compliance is huge. It’s imperative for business leaders to ensure that they’re in line with not only what their industry requires but what the government requires. Because at the end of the day, there’s nothing worse than not having everything in order when you’re audited.
On the Importance of Documentation
When you haven’t been maintaining good documentation, it can make things very hard on your business. Sadly, it often takes going through and failing an audit for things to really sink in. So as a business owner, I believe you CANNOT be in compliance. Because if you get audited, you could possibly end up losing the business you’ve built because you didn’t take care of your stuff upfront.
On Women Business Owners
I know many women are struggling with this whole glass ceiling idea. But let me say this. What if there wasn’t a ceiling? And what if we looked at things as though there wasn’t anyone there to hinder us. Of course, I’m not denying that the barriers exist. But what if we could push past the idea of being held back and cut the fear out. What if we as women we got out of our own way?
To learn more about Equa and sign up for a free trial, please visit us at www.equa.global
An option pool consists of shares of stock reserved for employees of a private company. The option pool is a way of attracting talented employees to a startup company - if the employees help the company do well enough to go public, they will be compensated with stock. Employees who get into the startup early will usually receive a greater percentage of the option pool than employees who arrive later.
The initial size of the option pool may decrease with subsequent rounds of funding because of investors' ownership demands. The creation of an option pool will commonly dilute the founders' share in the company because investors (angels and venture capitalists) often insist on it.
The shares that comprise an option pool typically are drawn from investor stock in the company rather than the shares earmarked for investors. This may be 15%–25% of the overall outstanding shares and may be determined when the startup receives its earliest funding round as part of the overall terms put in place.
It is also possible that a company, over the course of its development and subsequent funding rounds, may establish additional option pools after the initial one is put in place. The size of the pool may be dictated or advised by the venture backers to be a portion of the pre-money or post-money valuation of the company. Negotiations over the scope of the option pool can affect the startup’s overall price. For example, investors may want an option pool offered post-money option to be priced at the pre-money valuation, which could lower the price for the company.
The shares disbursed from the option pool may be determined by the roles of the employees as well as when they are hired. For example, senior management that is brought on board near the founding of the startup may receive a percentage of the entire pool, whereas later employees in more junior roles might be granted just fractions of a percent.
The option pool grants shares that, like other types of stock options, often require a period of time before they are vested. This means the employee will not be able to benefit from these shares possibly for several years. By delaying their ability to reap monetary value from their portion of the option pool, the belief is that the employee will contribute more to the overall health and growth of the company in order to see the greatest possible gains when the shares vest.
Launching a new business? Putting in long hours?
Now for the not so good news: You’re likely going to have a few bumps and hurdles along the way.
As an entrepreneur the possibilities for errors are endless: Like failing to file important compliance documents. Or overlooking an important tax filing deadline. How about blowing through all of your startup funding.
When these and other mishaps occur, it’s so easy to write them off as simply another case of “we didn’t know what we didn’t know.”
But here’s the good news:
Every mistake you make is a learning moment
Below are seven of the most common pitfalls startup entrepreneurs make when launching a new business.
Regardless of whether you’re a newly minted entrepreneur or have been into your business for the past 2–3 years, we invite you to capture some notes and heed the call to action on what you read below.
Pitfall #1: Too Much, Too Fast
You’ve started your business and the adrenaline is flowing. Things have reached a fever pitch. You’re feeling ambitious and on top of the world. And yes, of course, you’re expecting immediate results.
“Next week we’ll be profitable,” you tell yourself. And then you have a Chinese Bamboo Tree moment.
When you find yourself in this trap, it’s important to keep in mind that we often OVERESTIMATE what we can achieve in “Year One” while UNDERESTIMATING what we can do in say Year Five.
The lesson here:
Mistakes are going to occur. So you may as well learn from them.
Pitfall #2: Putting off Setting Up a Corporate Entity:
If you have a highly conservative accountant they will likely tell you that you can get away with simply registering with your Secretary of State as a sole proprietor. But there’s more to this story so listen up: Setting up a business entity ( LLC, S Corporation, or C Corporation) right out of the gate may be an important step for you to consider for one major reason, namely, it can serve as a form of liability and personal asset protection in the event that you’re sued.
Pitfall #3: Not Having a Good Bookkeeping System
Here’s an often overlooked fact: Having a great bookkeeping system (i.e. keeping those receipts) will not only allow you to maximize your tax writeoffs but save you a ton of headaches and extra CPA costs at tax time.
Back in the day, the modus operandi was to toss all of your lose receipts in a bag and hand them off to your bookkeeper monthly for reconciliation. Today we have great online sites and apps that can assist with digital downloads of bank statements and receipts. So there are no excuses for not having a good system in place.
Pitfall #4: A Lack of Startup Funding
It’s well documented that the number one cause of business failure is a lack of funding and working capital. Therefore it is an important piece to get a handle early on in terms of what will it take to keep your business running on a day-to-day basis. Otherwise, this disconnect could lead to funding shortfalls that might quickly put your business in peril.
Your Secret Sauce for better funding outcomes: Learn about the importance of Cap Tables.
Pitfall #5: Poor Sales Execution and Growth Mindset: As a startup, building a sales funnel can often lose importance in our list of priorities even though we are well aware of its importance. It goes without saying that this can lead to disastrous consequences.
Grant Cardone in his bestselling book entitled The 10X Rule: The Only Difference Between Success and Failure admonishes us to take massive action in the work that we do, saying that it is vital for the success of our business.
Here is a brief video of Grant discussing his 10X Growth Mindset!
Pitfall #6: Taking Shortcuts With Your Product or Service
The late inspirational speaker and thought leader Jim Rohn noted in one of his early seminars, “You get paid for bringing value to the marketplace, and if you’re not very valuable you don’t make much money.
The same is true for your business: The MARKETPLACE VALUE of your product or service is what will ultimately determine your business success. In other words, if you focus on all of the other details of your business versus working on the quality of your product or service, your business will likely see an early demise.
Pitfall #7: Lack of Strategic Direction
Here’s the key: Find your business sweet spot and then stay in your lane. Because if you disperse your energy in too scattered of a fashion, you will experience the Law of Diminishing Returns and your business will crumble.