Sustainable Business Models: Be married to the process, not the idea
Launch lean. Pivot or iterate. Change one of the boxes in your Business Model Canvas, or make a tweak to your Positioning…
A whirlwind of knowledge that would take months to navigate was covered over 5 short weeks in the Foundations in Entrepreneurial Management course at University of Toronto’s Continuing Studies. In the final class of the course, instructor Keri Damen, also the Director of Entrepreneurship Programs at MaRS Discovery District, shared some solid setup success tips.
Get Setup for Success
7 Questions to Asses Your Business Model
- How easy or difficult it is for customers to switch to a competitor?
- An example is iTunes. Once you have all your music and podcasts and movies on there, how annoying is it to switch to another service, and have everything separated? (Or Apple products in general).
- Recurring revenue.
- Is every sales a new effort, or will it result in follow-up revenues and purchases?
- How evenly will your revenues be distributed throughout the year? (e.g. Wedding planners are often busy in the spring and then nothing. Or, Farmers: The crop is one big payday annually).
- Earn Before You Spend
- Are you earning money before you are spending it?
- Understand where the expenses are.
- Long sales cycles can cause dry spells.
- Have a Game-Changing Cost Structure
- Is your cost structure substantially different and better than those of competitors?
- If you change your price drastically, you’ll be branded that way.
- You can’t keep undercutting. You’ll always be seen as the cheap option.
- Getting Others to do the work
- How much of the business model get customers or third parties to create value for you?
- What happens when you get sick?
- Tech companies like Google and Facebook, have millions of active users doing things.
- How rapidly and easily can you grow your business model without hitting roadblocks (e.g. infrastructure, customer, support, etc).
- Be able to answer everyone’s questions, have enough of a support team
- Protection from Competition
- How much is your business model protecting you from competition
- Customer Service
- Innovative, transferring ideas from other industries.
Don’t worry too much about startup competition.
- It’s harder to execute than come up with a good idea. (Ideas are a time a dozen – have goals and focus on them, don’t get lost and stick to it).
- Market uncertainty. They’re trying to find a problem/solution and product/market fit just like you.
- Many will pivot/evolve and you ant be competing anymore. (So keep on your path, and you may not even be competition anymore).
- A lot will die.
- Some will stop innovating. (They’ll think that they’re done, don’t have to listen anymore).
- Markets can support multiple players, that are on top of their game.
- It’s a war, not a battle. (Think of it in a long-term way. They may have a few exciting small events, etc. but look at the long term!)
Some exciting words of advice for entrepreneurs in the making! (Good thing there are 5 more courses in this Entrepreneurship Certificate program!)
This is a sponsored post on behalf of University of Toronto School of Continuing Studies Certificate in Entrepreneurship program; however, the opinions provided are my own.