ViableBus.Model9-23v1

Report
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
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Viable Business Model
 A sound and compelling Business Plan should include:
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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
Market Need
Alternatives
Product / Service
Delivery & Execution
‘Go to Market’
Strategy
Financing & Capital
Needs
Management
Team
Plan to Scale &
Leverage
Exit Plan
Financial Projections
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… And it needs to fit together logically
Market Need
Sustainability
Alternatives
Product / Service
Delivery & Execution
‘Go to Market’
Strategy
Financing & Capital
Needs
Management
Team
Plan to Scale &
Leverage
Exit Plan
Financial Projections
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Key Element: Defining Market Need
 Begin with the need not the product or service
Economic Buyers
Your Business
End-
Users
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
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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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