20 Sep Start-up Smart to make money – not to be just another pretty Entrepreneur
A clever Agile Professional recently asked me to review their Business Model Canvas for his, and a few friends new start-up. It was well filled in, looked like a good structural business model with lots for the starter upperers to do. Partnerships thought out, value propositions cleverly jotted down, and suppliers penciled in. In-fact it was a smart good looking very busy business according to the canvas.
Just one missing thing – they are a start-up, and no where on the canvas did it show WHY they were going to make money…. Don’t be fulled people, a good business structure is useless if people don’t want your products! That team structure or lean sales cycles is absolutely just pretty wallpaper and well oiled people if no-one is interested in buying what you are selling.
So a good bucket of cold water is sometimes needed for entrepreneurs when they are looking to turn the visions into real dollars.
- Do a start-up business plan
- Prioritise the Business Model Canvas components according to;
- Your critical go to market elements (oh no, if we don’t do this we won’t survive the first year)
- Your incubator elements (ok, our product is proven to be desirable so will invest a little)
- Your proven business success model (future state of desirable beings)
- The above prioritisation / reality task will feed into your start-up business plan
- Do a market appreciation to identify likely demand of your product;
- Where it is underserved
- Where it is overserved
- Where the problem you are solving sits within that landscape
- Then ask yourself
i. are we solving a problem the market actually needs?
ii. What is our solution to that problem in the market
- Then go back and re-write your Start-up business plan into slide: ‘Underlying Magic’ (because you now know your differentiator in the market) and update your business model to make that magic happen
- Then get back to me
Start-up Business Plan – yes if you can summarise into the below you know your business
- Problem – what problem are you solving?
- Solution – what’s the solution to the problem you’ve identified?
- Business Model – primary info here is – (manufacture, retailer, classified, subscription, service)
- Underlying magic – why are you so bloody special? What is your market differentiator?
- Product – what is it, how much is it, why will I buy it?
- Marketing – where, when, how…
- Sales – point of sale, cycles
- Competition – primary, etc…
- Team – who is going to bring this magic to life?
- Projections & Milestones
- financial projections based on the above product, marketing conversions, # sales, considering a coherence factor
- be careful with this one – you don’t necessarily want to hypothesis and share too much details so good to structure it in bi-annuall milestones, with critical factors & variable projections
- the essence is to show that it’s worth doing
- Summary – call to action – just inspire me….
Inspire me! Yep it’s an important part of the pitch – not just to yourself, to everyone you are going to want to pitch-into your business to make it succeed. In fact – especially inspire yourself because it does take effort to start-up a successful business and to pull in a regular income