Innovation funding

You have a new business idea. And you believe that customers will love it. But you have too little or no revenue coming in. And not much runway left for your team. It’s time to predict scenarios for potential cash flow and make a pitch for innovation funding.

Working with business development on new innovations is never easy. Nobody’s done it before, but you and the team believe that this is it. The next big thing. Our bread and butter. From rags to riches. Well think again – and show me the numbers. Where is the business case? How can we make money? If you have the numbers to back up your talent and enthusiasm you are on the right track.

Spreadsheets are my weapon of choise since 2002 for any financial planning. Boring, yes I know. But once I showed one of my “monster sheets” of five year long project plan including several partner companies to my son who was 7 years old at that time. He was looking curious and said “Oh, how cool, are you allowed to use that at work?” “Yes, we are”, I replied a bit amazed. They only had pen and paper on school for math lessons and I seemingy had an unfair competitive advantage although the formulas were not that difficult. I also never thought it was that cool, but it is true that we are working on super stereoids when dreaming about our future budgets and financial estimates. You should be proud of your number crunching. Or at least give your business controller a big hug for taking care of it.

What do these numbers mean? When we are not dealing with daily forecasts or actual past performance any sheet is full of assumptions. We can make best quess estimates and add modest risk projections with generous customer acquisition and retention rates. For sure we are making it big but spend a little for development. Nevertheless, a plan is just a map with route directions and the real terrain is where the we touch the ground. When the going gets tough look at the terrain, not the map. And make fast adjustments either on the business actions or the budgeted numbers.

Budget is not money. It is a financial frame and with it we are hoping to control the future spending and predicted income. We need to have the figures that we can refer to when making our daily decisions when we are looking at what happens in reality. Budget is kind of a permission to perform, but if performance is not happening, or happening on a much wider impact than expected, the permission can be reconsidered.

Want a permission to change the world? Well, do you have the innovation funding to do it?