Developing a viable business model
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Developing a Viable Business Model. Patrick Barry. Agenda. Overview Aligning with Objectives Elements of a Viable Business Model Process of Building Viable Plan Wrap-Up . Viable Business Model. A sound and compelling Business Plan should include: Assessment of Market

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Presentation Transcript

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Agenda

  • Overview

  • Aligning with Objectives

  • Elements of a Viable Business Model

  • Process of Building Viable Plan

  • Wrap-Up


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Viable Business Model

  • A sound and compelling Business Plan should include:

    • Assessment of Market

    • Identification of Customer Segments

    • Description of Key Buyer Values

    • Assessment of strengths & weaknesses of Competitive Alternatives

    • Clear Distribution Strategy

    • Assessment of Risks

    • 5 year Financial Pro-formas including Cash Flow Model, Income Statement, and Balance Sheet

    • Detailed Description of Management Team

    • Clear Exit Strategy with Potential buyers identified


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Viable Business Model

  • A sound and compelling Business Plan should include:

    • Assessment of Market

    • Identification of Customer Segments

    • Description of Key Buyer Values

    • Assessment of strengths & weaknesses of Competitive Alternatives

    • Clear Distribution Strategy

    • Assessment of Risks

    • 5 year Financial Pro-formas including Cash Flow Model, Income Statement, and Balance Sheet

    • Detailed Description of Management Team

    • Clear Exit Strategy with Potential buyers identified

  • A Story that makes sense


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Align Business Model with Objectives

  • What are you trying to accomplish with this plan?

    • Win the Competition?

    • Pass a Class?

    • Start a Business?

      • Make a living?

      • Fame & Fortune?

      • Make a difference?

    • Learn?


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Key Misconception(s)

  • Invention = Innovation

  • Good Plan = Winning Plan = Good Business Model = Successful Business

  • Good Business Model = Big $

  • A Plan = The Answer


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A Compelling Story needs to cover the key elements …

Sustainability

Product / Service Delivery & Execution

Financing & Capital Needs

Plan to Scale & Leverage

Financial Projections

Market Need

Alternatives

‘Go to Market’ Strategy

Management Team

Exit Plan


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… And it needs to fit together logically

Sustainability

Product / Service Delivery & Execution

Financing & Capital Needs

Plan to Scale & Leverage

Financial Projections

Market Need

Alternatives

‘Go to Market’ Strategy

Management Team

Exit Plan


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Key Element: Defining Market Need

  • Begin with the need not the product or service

Economic Buyers

End-

Users

Your Business

Distribution

Channels

Influencers


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Key Element: Alternatives

  • How is need being satisfied or addressed today


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Key Element: Meeting Needs

  • How will your product / service meet identified needs?

  • Why it is better than alternatives from the customer’s perspective?

  • What will compel them to buy?


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Key Element: Go to Market

  • Is there alignment with the other elements?

  • Why is the plan (the distribution channel, the marketing plan, the sales message, etc.) the best / most logical?


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Key Element: Identifying Critical Factors

  • Which aspects of the business are most critical?

  • Which aspects need to be done well and which ones exceptionally well?

  • Which aspects, if done marginally, could sink the business?


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Key Element: Management

  • What talent / expertise is needed to meet critical needs of business?

  • How will you attract that talent?

  • Begin with needs and align talent with it

    • Don’t start with people available


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Key Element: How will it make $

  • Who pays what and why?

    • Specific customer groups

    • Sell price - why reasonable?

    • Volume

      • Initial, Ramp up rate, Reasonable potential

  • Cost Structure

    • COGS

    • Gross Profit ($ & %)

    • Distribution Costs

    • Marketing Costs

    • Support Costs

    • Net Potential


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Process: How to Build a Viable Plan

  • Onion Method

  • Check & Recheck Connections

  • Versions:

    • 2 minutes

    • 20 minutes

    • 2 hours


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Process: How to Build a Viable Plan

Tips & Tactics (Top 10 List)

10. Talk to yourself

9. Be an actor

8. Make sure the numbers add

7. Answer the question: “How do I know …?”

6. Answer the question: “How would I find out?”

5. Get testimonials / references from those in the know

4. Sell one (or more)

3. Realize the product / service is only relevant through the market’s eyes

2. Define the Bet

1. Constantly learn and adjust


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Wrap - Up

  • Tell a logical story => the rest is logistics and risk / reward assessments


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Wrap - Up

  • Observations & Questions


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