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:
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

Product / Service
Alternatives Delivery & Execution

Go to Market Financing & Capital

Strategy Needs

Management Plan to Scale &

Team 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 End-

Your Business
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

customers 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

Dont 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
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 markets
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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