Mistakes for financing Internet projects: a practical situation
60 percent of Internet start-ups face a situation - “there was not enough money”, despite the promising budget of the business plan, drawn up on the correct principle “income at a minimum, expenses at a maximum”.
Why is this happening? This is a “cap-sweeping” assessment of the market, especially the market of the non-free, where there are several strong players. Unrealistic sales plan. Lack of risk management. The blurred business process of budgeting, the budget is not maintained, the financing goes according to the principle “now densely, now empty” - depending on the dynamics of profits. And so on and so forth, see the link for more details.
On the basis of communication with the managers of Internet projects of leading publishing houses that specialize in classifying and developing Internet projects, I give an example of a “average” project that diluted with basic errors in business processes (to read was not boring).
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So, our imaginary ID has a strong klassifide newspaper and, as it almost always happens (because management focuses on the main, more money business), extremely weak sites. When competitors who do not have off-line editions began to go around the ID in terms of Internet traffic dozens of times, the owners of the publishing house asked the top manager in charge of the Internet to take PM (project manager) to draw up a business plan for bringing direction.
No sooner said than done, PM wrote a business plan: income was set so that it was not less than that of competitors. And they did not calculate who would provide such a sales plan. It is known that the sales department of the newspaper is afraid of the Internet, and it sells more to the newspaper, because from her% of sales revenue is higher. Also, do not calculate whether such budgets have customers. In general, by the end of the second year, the income curve boomed upwards, so the profitability turned out to be 500-1000%, like in the case of drug trafficking. The business plan was signed without looking and it started ...
We made TZ and interfaces, recruited programmers, the work is in full swing. Once the financial director noticed that there were too many programmers, and January turned out to be very weak in terms of income for the entire company, so it would be necessary to reduce the percentage of techies by 30. Why he didn’t specify 30% and why the techies. In vain PM showed the signature on the budget. A week later, they decided to save money on the online sales department - the general snapped: “Our sales salespeople will sell, they have been working for 10 years already. You go and train them. ”
Some programmers fired, and, looking at this, other programmers, having barely finished the beta version, fled. PM taught sales, made plans, set an example, tried to meet at least one client, and received the answer: “our clients need off-line”, “the site is weak, little traffic, there is nothing to sell”, “do not bother us to sell”, and he quit after a conversation with the general, who said that PM was putting pressure on the sales department. Of course, without communication between the general and the commercial on the theme “everyone goes here, only distracts,” it has not been done.
New PM came a month later, wrote a new business plan, successfully defended it, dialed the team, and miraculously launched a new project. Deciding not to repeat the fate of his predecessor, he focused on “licking” the product and increasing traffic.
However, the first visit to the financial director with a bill for contextual advertising of $ 5,000 ended like this: “You prove the effectiveness of the advertising campaign and its impact on future revenues; consult the marketing department ... the sales department. And in general, everything is being promoted on the Internet for free, Google wonn’t spend a penny on promo. ”
PM for 2 weeks collected the necessary conclusions. Findir, skimmed through the papers and set them aside:
- Judging by the budget, there is money for advertising, but it is difficult for me to say how much your project has already spent since the beginning of the year. However, it does not matter. Now there is little money, let's barter with its Direct.
“But ... a budget has been signed, there is real money there, and what a barter with Direkt ...” answered PM, not understanding.
- I don’t know what you wrote down your budget there ... and don’t show my signature on it ... better see how many cartridges you spend per month ... And who orders a coffee machine per programmer? Well, well ... let's see the budget execution. What are our sales now? ..
“But the commercial director ... he is not accepting my sales plan ... he says managers can't ..."
“You weakly motivate them ...” interrupted the financial director. - So, first show that the project can generate cash flow, and then come. - And in general, you know that we are opening a new edition on cars, and the office in Bryansk needs repair?
- But the budget was signed ... - I almost cried PM.
- Listen, the controlling department counted the costs of releasing your project. Instead of pledged on the budget of 120 thousand dollars you, or rather the previous manager ... but it does not matter, spent 270. Who will return the company this money? Are you your sales? - financial launched heavy artillery.
PM had nothing to do, how to sign an account directly with the general and “pull” his financial account. Financial, gritting his teeth, had to pay. However, a month later, on the initiative of fin-deer, all project managers were offered a new system of motivation: a fixed salary was cut in return for a% of sales and profitability, calculated, of course, by a fin-director. After the first salary of the "new way" PM quit.
Meanwhile, competitors released a new version and took up the regions, and the new PM came to the interview for a new PM.
Why is this happening? This is a “cap-sweeping” assessment of the market, especially the market of the non-free, where there are several strong players. Unrealistic sales plan. Lack of risk management. The blurred business process of budgeting, the budget is not maintained, the financing goes according to the principle “now densely, now empty” - depending on the dynamics of profits. And so on and so forth, see the link for more details.
On the basis of communication with the managers of Internet projects of leading publishing houses that specialize in classifying and developing Internet projects, I give an example of a “average” project that diluted with basic errors in business processes (to read was not boring).
')
So, our imaginary ID has a strong klassifide newspaper and, as it almost always happens (because management focuses on the main, more money business), extremely weak sites. When competitors who do not have off-line editions began to go around the ID in terms of Internet traffic dozens of times, the owners of the publishing house asked the top manager in charge of the Internet to take PM (project manager) to draw up a business plan for bringing direction.
No sooner said than done, PM wrote a business plan: income was set so that it was not less than that of competitors. And they did not calculate who would provide such a sales plan. It is known that the sales department of the newspaper is afraid of the Internet, and it sells more to the newspaper, because from her% of sales revenue is higher. Also, do not calculate whether such budgets have customers. In general, by the end of the second year, the income curve boomed upwards, so the profitability turned out to be 500-1000%, like in the case of drug trafficking. The business plan was signed without looking and it started ...
We made TZ and interfaces, recruited programmers, the work is in full swing. Once the financial director noticed that there were too many programmers, and January turned out to be very weak in terms of income for the entire company, so it would be necessary to reduce the percentage of techies by 30. Why he didn’t specify 30% and why the techies. In vain PM showed the signature on the budget. A week later, they decided to save money on the online sales department - the general snapped: “Our sales salespeople will sell, they have been working for 10 years already. You go and train them. ”
Some programmers fired, and, looking at this, other programmers, having barely finished the beta version, fled. PM taught sales, made plans, set an example, tried to meet at least one client, and received the answer: “our clients need off-line”, “the site is weak, little traffic, there is nothing to sell”, “do not bother us to sell”, and he quit after a conversation with the general, who said that PM was putting pressure on the sales department. Of course, without communication between the general and the commercial on the theme “everyone goes here, only distracts,” it has not been done.
New PM came a month later, wrote a new business plan, successfully defended it, dialed the team, and miraculously launched a new project. Deciding not to repeat the fate of his predecessor, he focused on “licking” the product and increasing traffic.
However, the first visit to the financial director with a bill for contextual advertising of $ 5,000 ended like this: “You prove the effectiveness of the advertising campaign and its impact on future revenues; consult the marketing department ... the sales department. And in general, everything is being promoted on the Internet for free, Google wonn’t spend a penny on promo. ”
PM for 2 weeks collected the necessary conclusions. Findir, skimmed through the papers and set them aside:
- Judging by the budget, there is money for advertising, but it is difficult for me to say how much your project has already spent since the beginning of the year. However, it does not matter. Now there is little money, let's barter with its Direct.
“But ... a budget has been signed, there is real money there, and what a barter with Direkt ...” answered PM, not understanding.
- I don’t know what you wrote down your budget there ... and don’t show my signature on it ... better see how many cartridges you spend per month ... And who orders a coffee machine per programmer? Well, well ... let's see the budget execution. What are our sales now? ..
“But the commercial director ... he is not accepting my sales plan ... he says managers can't ..."
“You weakly motivate them ...” interrupted the financial director. - So, first show that the project can generate cash flow, and then come. - And in general, you know that we are opening a new edition on cars, and the office in Bryansk needs repair?
- But the budget was signed ... - I almost cried PM.
- Listen, the controlling department counted the costs of releasing your project. Instead of pledged on the budget of 120 thousand dollars you, or rather the previous manager ... but it does not matter, spent 270. Who will return the company this money? Are you your sales? - financial launched heavy artillery.
PM had nothing to do, how to sign an account directly with the general and “pull” his financial account. Financial, gritting his teeth, had to pay. However, a month later, on the initiative of fin-deer, all project managers were offered a new system of motivation: a fixed salary was cut in return for a% of sales and profitability, calculated, of course, by a fin-director. After the first salary of the "new way" PM quit.
Meanwhile, competitors released a new version and took up the regions, and the new PM came to the interview for a new PM.
Source: https://habr.com/ru/post/21692/
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