Business Model

In general, a business model describes the rationale of how a company creates and delivers value to its customers. Get started with your next business model by using this sample template.

Value Proposition

What is your company’s value proposition? More importantly, how will you deliver that value to your customer base? Focus on strategies that distinguish your product offeringin your market. What do your customers want most and how best can your business deliver that to them?

Customer Segments

Segmenting your customer base is an essential part of identifying your venture’s critical sales channels. Focus on key demographics, age groups, ethnicities and genders in order to segregate your customer base. From this exercise you should be able to distinguish between those customers that your enterprise deems to be the most important and essential to growing your market.

Channels

Once you’ve segmented your customer base, you’ll now have to decide upon those aforementioned channels to market. This may ultimately force you to use multiple channels. For instance, you may opt to sell direct to end-users for some product lines, while using sales agents and distributors for others.

Customer Partnerships

What do your customers expect from you in terms of servicing and maintaining their business? Can your enterprise bundle special services with your product offering that might help to set it apart from its competition? Move away from seeing sales as a series of singular transactions where you try and maximize gross profit on each additional sale. Instead, see your customers as potential partners and define what it takes to retain their business for the long-term.

Revenue Streams

Define your company’s revenue streams. Will you only derive revenue on sales of a given product line, or will you charge for essential services such as delivery and special packaging? Approach this step with the mindset of your customer segments. What are your customers willing to spend in order to benefit from your enterprise’s value proposition?

Key Resources

What resources must your company acquire or secure in order to attain its value proposition? Your venture’s resources can be its business knowledge, its core competencies, its management, its employees, or even its physical assets, such as equipment and machinery. What resources does your venture require in order to achieve your value proposition?

Key Activities

What activities or operations are essential to growing your business? Think of those business activities that your enterprise must excel at in order to meet its value proposition. Think of the importance of a well-defined supply chain, one where vendors are properly aligned and can immediately turn around raw materials and parts. Think of the importance of having solid partnerships with creditors and investors.

Key Partnerships

Who are the venture’s main stakeholders, and of those stakeholders, who are the most valued partners? When looking to define your venture’s stakeholders, look to isolate those strategic partnerships so vital to your venture’s success and ones that are essential in mitigating risk. Focus on key investors, suppliers and creditors. Next, define their relationship to your enterprise and their appropriate roles and responsibilities.

Cost Structure

In this step you’ll define your company’s cost structure relative to your value proposition. What costs are essential to manage in order to deliver your value proposition? How best can you manage these costs in order to derive the greatest return? Focus on segregating those resources and activities where you’ll need to have strong cost controls. Lower costs means these activities will bear fruit earlier in the process.

Financials

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The Lean Startup Business Plan

The offer to target customers

What does your product and/or service do? What benefits make your offer unique, or just different? What will motivate customers to switch to your product and/or service? How would you describe a typical customer for your product and/or service? How would you describe a group(s) of target customers?

The market potential

What is the market potential for your product and/or service? Is the market growing, staying the same, or declining? How many competitors are there? How will you compete (e.g. faster service, more convenient etc.)? What sales can you realistically achieve in the first 6 months? First year?

Reaching target customers

Which route(s) to access your target customers will you use e.g. website, shop etc. What promotional methods will you use (e.g. email, social media, advertising etc.)?

Provision of product and/or service

What resources do you need to get started – premises, equipment, machinery etc.? What is the key function in your business (e.g. scheduling drivers to collect and deliver parcels)? How much could you provide in total (hours available and/or maximum production)? Who will be your suppliers and/or subcontractors?

The team

What relevant skills and experience do you have? Who will be responsible for what in your business? What skills and experience do other team members bring? Who will act as your Mentor/Adviser?

Simple financials

Will it break-even? What is your own financial contribution to the business? Is there any additional funding needed? Where will this come from (e.g. owners, friends, family, bank, business angels, venture capital) What will these funds be used for?

Business Marketing Plan

By definition, a marketing plan is a written document that details the necessary actions to achieve one or more marketing objectives. Here’s a sample template to get started with your next marketing plan.

Target Market

Identify your target market. Take time to research the demographics (age, gender, geographic location and household income) as well as the psychographics (buying habits, beliefs, and culture characteristics) of your customer base. Establish numbers of potential customers in your service area based on those criteria.

Objectives

Establish objectives. What do you hope to accomplish through your marketing? Be specific. “Increase sales” is too general to be helpful, but “Increase sales by 10% by the end of Q2” is both specific and measurable.

Strategies

Define strategies. These are the methods that you will use to accomplish your objectives. A strategy can be a broad overview, such as “Utilize social media” or “Implement e-mail campaign.” There are dozens of different strategies that can be employed for any given goal, so it may take some time and research to determine those that will help you accomplish your objectives.

Tactics

List your tactics. Tactics will be the specific methods within your strategy that will help you accomplish your goals. Working from the social media strategy already mentioned, you might list, say, “Offer exclusive coupons via Facebook and Twitter”


Metrics

Establish metrics. In order to determine if your objective has been met, you will need to establish a benchmark for tracking your success. This can be the number of new Facebook friends, the response rate of your direct mail campaign, or the number or dollar amount of sales from new customers.


Return on Investment

Before you implement any strategy or tactic, it is important to calculate the cost of a campaign and the income that is required to break even. When possible, you will want to use figures that relate to the metrics you established above.


Bad News For Entrepreneurs

Hey Entrepreneurs,

I have some bad news, but also good new for your guys. I just receive the news from the world that the person who can make thing, sale thing, and look after the money has not born yet. He, though, may be born soon on Feb 30th, 2015.

Anyway, there is a good news too in that same regard. You can still partner with other who can do the other two things beside you. So, do it now or else you can wait until that person born, so you can hire him. It is one for once.

Good luck,

Rithy & SmallWorld

Repost: Startup in 13 sentences

One of the things I always tell startups is a principle I learned from Paul Buchheit: it’s better to make a few people really happy than to make a lot of people semi-happy. I was saying recently to a reporter that if I could only tell startups 10 things, this would be one of them. Then I thought: what would the other 9 be?

When I made the list there turned out to be 13:

1. Pick good cofounders.

Cofounders are for a startup what location is for real estate. You can change anything about a house except where it is. In a startup you can change your idea easily, but changing your cofounders is hard. [1] And the success of a startup is almost always a function of its founders.

2. Launch fast.

The reason to launch fast is not so much that it’s critical to get your product to market early, but that you haven’t really started working on it till you’ve launched. Launching teaches you what you should have been building. Till you know that you’re wasting your time. So the main value of whatever you launch with is as a pretext for engaging users.

3. Let your idea evolve.

This is the second half of launching fast. Launch fast and iterate. It’s a big mistake to treat a startup as if it were merely a matter of implementing some brilliant initial idea. As in an essay, most of the ideas appear in the implementing.

4. Understand your users.

You can envision the wealth created by a startup as a rectangle, where one side is the number of users and the other is how much you improve their lives. [2] The second dimension is the one you have most control over. And indeed, the growth in the first will be driven by how well you do in the second. As in science, the hard part is not answering questions but asking them: the hard part is seeing something new that users lack. The better you understand them the better the odds of doing that. That’s why so many successful startups make something the founders needed.

5. Better to make a few users love you than a lot ambivalent.

Ideally you want to make large numbers of users love you, but you can’t expect to hit that right away. Initially you have to choose between satisfying all the needs of a subset of potential users, or satisfying a subset of the needs of all potential users. Take the first. It’s easier to expand userwise than satisfactionwise. And perhaps more importantly, it’s harder to lie to yourself. If you think you’re 85% of the way to a great product, how do you know it’s not 70%? Or 10%? Whereas it’s easy to know how many users you have.

6. Offer surprisingly good customer service.

Customers are used to being maltreated. Most of the companies they deal with are quasi-monopolies that get away with atrocious customer service. Your own ideas about what’s possible have been unconsciously lowered by such experiences. Try making your customer service not merely good, but surprisingly good. Go out of your way to make people happy. They’ll be overwhelmed; you’ll see. In the earliest stages of a startup, it pays to offer customer service on a level that wouldn’t scale, because it’s a way of learning about your users.

7. You make what you measure.

I learned this one from Joe Kraus. [3] Merely measuring something has an uncanny tendency to improve it. If you want to make your user numbers go up, put a big piece of paper on your wall and every day plot the number of users. You’ll be delighted when it goes up and disappointed when it goes down. Pretty soon you’ll start noticing what makes the number go up, and you’ll start to do more of that. Corollary: be careful what you measure.

8. Spend little.

I can’t emphasize enough how important it is for a startup to be cheap. Most startups fail before they make something people want, and the most common form of failure is running out of money. So being cheap is (almost) interchangeable with iterating rapidly. [4] But it’s more than that. A culture of cheapness keeps companies young in something like the way exercise keeps people young.

9. Get ramen profitable.

“Ramen profitable” means a startup makes just enough to pay the founders’ living expenses. It’s not rapid prototyping for business models (though it can be), but more a way of hacking the investment process. Once you cross over into ramen profitable, it completely changes your relationship with investors. It’s also great for morale.

10. Avoid distractions.

Nothing kills startups like distractions. The worst type are those that pay money: day jobs, consulting, profitable side-projects. The startup may have more long-term potential, but you’ll always interrupt working on it to answer calls from people paying you now. Paradoxically, fundraising is this type of distraction, so try to minimize that too.

11. Don’t get demoralized.

Though the immediate cause of death in a startup tends to be running out of money, the underlying cause is usually lack of focus. Either the company is run by stupid people (which can’t be fixed with advice) or the people are smart but got demoralized. Starting a startup is a huge moral weight. Understand this and make a conscious effort not to be ground down by it, just as you’d be careful to bend at the knees when picking up a heavy box.

12. Don’t give up.

Even if you get demoralized, don’t give up. You can get surprisingly far by just not giving up. This isn’t true in all fields. There are a lot of people who couldn’t become good mathematicians no matter how long they persisted. But startups aren’t like that. Sheer effort is usually enough, so long as you keep morphing your idea.

13. Deals fall through.

One of the most useful skills we learned from Viaweb was not getting our hopes up. We probably had 20 deals of various types fall through. After the first 10 or so we learned to treat deals as background processes that we should ignore till they terminated. It’s very dangerous to morale to start to depend on deals closing, not just because they so often don’t, but because it makes them less likely to.

Having gotten it down to 13 sentences, I asked myself which I’d choose if I could only keep one.

Understand your users. That’s the key. The essential task in a startup is to create wealth; the dimension of wealth you have most control over is how much you improve users’ lives; and the hardest part of that is knowing what to make for them. Once you know what to make, it’s mere effort to make it, and most decent hackers are capable of that.

Understanding your users is part of half the principles in this list. That’s the reason to launch early, to understand your users. Evolving your idea is the embodiment of understanding your users. Understanding your users well will tend to push you toward making something that makes a few people deeply happy. The most important reason for having surprisingly good customer service is that it helps you understand your users. And understanding your users will even ensure your morale, because when everything else is collapsing around you, having just ten users who love you will keep you going.

Whole sources: http://www.paulgraham.com/13sentences.html

Fifteen Business Lesson from Richard Branson, Terry, and Heseltine

Sir Richard Branson was the undoubted star of the Global Entrepreneurship Congress in Liverpool today. But former Tesco boss Sir Terry Leahy and Lord Heseltine were also very good value. This morning I popped down to the Echo Arena and live tweeted the proceedings, and below are the main lessons on how to succeed in business.

Here is what we learned from Sir Richard:

  • The important thing for building business is the art of delegation. Find people better than you to do your job. Step aside as often as you can
  • Give staff the freedom to make mistakes. People leave companies because they are not given freedom to do things
  • If you are better than your competition you will survive
  • Free marketing is the best type, ie articles in newspapers and the like. Treat your PR people well

Here is what we learned from Sir Terry:

  • Parents should not to just push children into university, but to support them if they want to go into business
  • A simple observation can create a big business opportunity (Leahy used the example of Tesco express stores that met the need for changing lifestyles)
  • Be courageous. People are frozen by fear. Fear is overblown. If you look for the truth you can change things
  • You can innovate from inside a corporation. Tesco Direct is an example of this
  • Compete. Learn from competition, don’t be scared by it
  • The business you wind up with, may not be the one you end up with. But keep the core purpose for why you did it. This is one of the reasons family run businesses last longer than public co.s because they protect core mission better

This is what we learned from Lord Heseltine:

  • Everyone is unique, so for me to tell you makes a presumption I know what you think and feel
  • There is no formula to success
  • Luck is a huge factor. Many miss the opportunities, they go by unnoticed
  • Offer the best possible product that you can
  • Enterprise isn’t just about private sector wealth creation. Why not also think about enterprise in the public sector?


For more news from the Global Entrepreurship Congress 2012 visit http://www.gec2012.com.

(Source: David Bartlett – Liverpool Post)

SmallWorld

SmallWorld is a collaborative workplace designed to ensure that passionate, business minded youth have access to an enjoyable and productive work environment. It serves as an education, networking, and small business resource and support center where students and budding entrepreneurs can learn and network with others to discuss, test, and launch new business ideas.

Our vision is to build a platform for young people to test, refine, and launch their ideas, improve their abilities, and create a business portfolio that will help them secure funding for future business developments.

Our mission is to facilitate and create innovative business and employment opportunities for idea-oriented youth in an open and casual work environment where they can meet, network, share, learn, collaborate, and have fun with other like-minded individuals.

sw_logo

Entrepreneurship Quotes

“When you reach an obstacle, turn it into an opportunity. You have the choice. You can overcome and be a winner, or you can allow it to overcome you and be a loser. The choice is yours and yours alone. Refuse to throw in the towel. Go that extra mile that failures refuse to travel. It is far better to be exhausted from success than to be rested from failure.”
– Mary Kay Ash, founder of Mary Kay Cosmetics

“An entrepreneur tends to bite off a little more than he can chew hoping he’ll quickly learn how to chew it.
– Roy Ash, co-founder of Litton Industries

“Business opportunities are like buses, there’s always another one coming.”
– Richard Branson, founder of Virgin Enterprises

“The critical ingredient is getting off your butt and doing something. It’s as simple as that. A lot of people have ideas, but there are few who decide to do something about them now. Not tomorrow. Not next week. But today. The true entrepreneur is a doer, not a dreamer.”
– Nolan Bushnell, founder of Atari and Chuck E. Cheese’s

“Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or a different service. It is capable of being presented as a discipline, capable of being learned, capable of being practiced. Entrepreneurs need to search purposefully for the sources of innovation, the changes and their symptoms that indicate opportunities for successful innovation. And they need to know and to apply the principles of successful innovation.”
– Peter F. Drucker, “The Father of Modern Management”

“I never perfected an invention that I did not think about in terms of the service it might give others… I find out what the world needs, then I proceed to invent.”
– Thomas Edison

“The important thing is not being afraid to take a chance. Remember, the greatest failure is to not try. Once you find something you love to do, be the best at doing it.”
– Debbi Fields, founder of Mrs. Fields Cookies

“We were young, but we had good advice and good ideas and lots of enthusiasm.”
– Bill Gates, founder of Microsoft Corporation

“Our success has really been based on partnerships from the very beginning.”
– Bill Gates

“Entrepreneurs are risk takers, willing to roll the dice with their money or reputation on the line in support of an idea or enterprise. They willingly assume responsibility for the success or failure of a venture and are answerable for all its facets.”
– Victor Kiam, best known for his “I liked it so much, I bought the company” ads for Remington electric shavers

“If it really was a no-brainer to make it on your own in business there’d be millions of no-brained, harebrained, and otherwise dubiously brained individuals quitting their day jobs and hanging out their own shingles. Nobody would be left to round out the workforce and execute the business plan.”
– Bill Rancic, winner on Donald Trump’s “The Apprentice”

“The cover-your-butt mentality of the workplace will get you only so far. The follow-your-gut mentality of the entrepreneur has the potential to take you anywhere you want to go or run you right out of business–but it’s a whole lot more fun, don’t you think?”
– Bill Rancic

“Nobody talks about entrepreneurship as survival, but that’s exactly what it is and what nurtures creative thinking. Running that first shop taught me business is not financial science; it’s about trading: buying and selling.”
– Anita Roddick, founder of The Body Shop

“I have always found that my view of success has been iconoclastic: success to me is not about money or status or fame, its about finding a livelihood that brings me joy and self-sufficiency and a sense of contributing to the world.”
– Anita Roddick

“Experience taught me a few things. One is to listen to your gut, no matter how good something sounds on paper. The second is that you’re generally better off sticking with what you know. And the third is that sometimes your best investments are the ones you don’t make.”
– Donald Trump, real estate and entertainment mogul

“My son is now an ‘entrepreneur’. That’s what you’re called when you don’t have a job.”
– Ted Turner, broadcasting entrepreneur

“I had to make my own living and my own opportunity! But I made it! Don’t sit down and wait for the opportunities to come. Get up and make them!”
– Madam C.J. Walker, creator of a popular line of African-American hair care products and America’s first black female millionaire