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