Explaining your business model for money is kind of like explaining to someone how you are going to play a game of hockey before you play it, you are telling them what they want to hear but it is not necessarily how it will play out in real life. This is the gap between a business model and an actual business.
For business model competitions it is important not only for yourself but also the judges to make your gaps between business model and real life as short as possible. If you can do this you have instantly brought credibility to your project and the rest ABC (always be closing).
From my experience as a competitor and winner of business model competitions on the local and national level, as well as starting my own business selling custom promotional items and Mural Arts Project in Ottawa. I have found that there are some common keys to success to make sure not only you win but after you win you actually make some money and start a business.
Key to Success #1 - Go to the Entrepreneurial Culture Website, founded and maintained by Bruce Firestone entrepreneur in Residence at the Telfer School of Management and Founder of the Ottawa Senators NHL Franchise. When you click on this link read and take notes. Take more notes talk to your friends about everything you learned and explain to them why it will help you do well as an entrepreneur. This is your foundation.
Key to Success #2 - Watch Elevator Pitches go to youtube and go to www.fundfindr.com which also has great pitches. Study their moves mannerisms and what they stress. You do this because for the most part your pitch is your story, it’s 2 minutes to get people interested and you always start a business model presentation with it. If you do it right judges will want to hear more, that when you go into the guts or logistics about how you can make this story happen.
Key to Success #3 - Bring Something tangible. If your business model involves e commerce or an online business have something online. Even if it is a well made picture that is on the homepage of you website. If you can type in your URL and have something show up on your browser your creditability shoots through the roof. If you have a tangible product but it will cost you $1000000 to make a prototype, change your idea. Always follow bootstrap entrepreneurial principles, “start something small and with in your reach but has the flexibility and potential to grow as you do.” If you are making a website, make sure your web developers make your project on a version basis. That way when you add something you pay for it and it allows you to control your cost and take small bites to make sure your idea can grow. My web developers are http://www.csedev.com which is an Ottawa based web company and they did a fantastic job for me. You don’t need any knowledge to start a website, you just need $30 and a credit card and you can have your own website, go to boot strap websites to learn how to get on the web pain free and fast.
Key to Success #4 - Start With The Easy Money. When you pitch your business model focus on the part of your business that has clients who are readily available to give their money to you in return for your start ups services. For example when I started www.draugh.com I pitched it as a Virtual Design Studio where design professionals could share their screen with the client and communicate in real time to create logos and other design elements. This had never been done before so I built the system put it all together and looked around and said, “where are my customers?” I realized this was not the easy money. So I re worked my website. Now draugh.com is a website that allows the user to build custom promotional items through one easy to use interface where they can upload their own design and text or use our stock designs supplied by other customers and artist. Now I’m making the, “easy money.” I have virtually no overhead, no inventory or any other costs. The client generates the inventory by placing orders which I place with my suppliers. With this set up people are coming to get promotional items on my website, now I can take it to the next level allowing artisit to use my screen sharing system for a flat yearly fee creating logos for clients who can now in turn use those logos to create promo material for their business.
Key to Success #5 - Make a Local Value Proposition you can execute. How do you know if you can execute value to a customer, they give you money, that is the test. If there is one thing I learned if people are giving you money for something you are on the right track. Draugh.com used to be known as vinyltees.ca and we made custom hand made tee shirts for clients in and outside the class room, and they gave us money. We executed on a small scale locally which is ok as long as you keep in mind that it is you r job in the end to create a system where you reverse out the work, and your profits are based on the amount of orders you do, not the amount of hours you put in. If you actually put cash money down on the table in front of the judges and say that this is the money people have paid you for your services or product, its small but it is a start and only a small indication of our up coming success. “please someone do this; sell me something, I would gladly buy it to see you put money down in front of the judges.
Thats it, do these five things and your well on your way to win the competition but also start a real bonified business.
If you have any questions, email me at craigschoen@draugh.com
Cheers
Craig Schoen
Founder and Studio Manager Draugh.com
Program Manager Mural Arts Program of Canada