Small Business Loans: The Art of the Start

In Guy Kawasaki’s fantastic book on startups and growth “The Art of The Start”, he brings up the importance of laying a MAT, or Milestones, Assumptions, and Tasks whenever a startup gains funding. This method of accountability helps to drive growth in startup businesses by helping attribute cash spend with outcomes. This helps to test whether the cash could be better used elsewhere, in both opportunity cost and execution cost.

Milestones – The Growth Engine

Once a business has obtained financing, what does it spend the money on? If you’ve taken out a loan but don’t know what it will go towards you might find yourself in a sticky situation, so to prevent this, we look at establishing milestones. Milestones are just a simple statement that says “by $X, I expect to see Y outcomes achieved. If not, I need to test the assumptions to find out why”. Having milestones helps set reasonable expectations for what the finance will be spent on.

Assumptions – The Why

The next step in spending financing is setting the assumptions behind the milestones. Assumptions are best set up as a series of sentences, structured “If this is true, then that is true too”. Having assumptions lets you find out why your milestones were not achieved, whether you had set yourself reasonable expectations for the amount of money you had, or even whether you ever needed the financing in the first place. These assumptions are fundamentally important to finding out the exact breakdown of how much money was required. Of course, hindsight is 20/20, so don’t expect to have your assumptions perfect when you start out.

Tasks – The How

Of course, whenever a business does anything, be it a project or business as usual, the tasks need to be outlined. Laying out a task map sets up exactly where the allocated resources i.e. money will go. Once the tasks have been laid out, you have everything you need to make the start.

The Art of the Start

The biggest reason for compiling a list for each of these is to keep you "on track when all hell breaks loose”. If money gets misallocated when utilising financing for small business, there is a chance that it will spell a missed opportunity down the track. Having the list gives you a chance to save your financing allocation before things get out of hand.

Written by David Jackson, Founder and CEO of FundX