BUSINESS IDEAS

Developing A Good Business Canvass

Fifteen years ago, investors expected startups to spend great amounts of time writing long business plans filled with forecasts that were unlikely to be true. Today, sophisticated investors expect startups to focus on developing a business model for their business. I deal one may scale through.

A business model is the collection of assumptions that must be true in order for your startup to generate a consistent profit. These assumptions include a precise description of the customers you will engage, the problem you will solve for those customers, the features of the solutions to that problem, the messages and channels you will use to connect with those customers, and the economics around what and how you will charge for your solutions and what it will cost you to provide it.

A scalable business is one that not only enables the business to generate a profit but one that is well suited to grow rapidly and ideally become the profitable as the business becomes large. Rather than assuming that you have all the answers about your scalable business model from the start, you as a smart entrepreneur today begin with the idea that they have hypothesis that must be tested through actual interactions with customers. It doesn’t matter what you think, it matter what you can validate through hard data drew from actual customers interactions.

LEARN START-UP METHODOLOGY

Popularized by Steve Btanic and Gril, is the popular way of going through this continuous process of experimentation of business model development. A “learn startup” approach to building your business pairs an iterative experimental approach to developing an in-depth understanding of your customers and their wants with a fast, flexible approach to building your product. The idea is that you build as little of your product as possible, test it with real customers, then make quick tweaks and charges to the product and repeat. To communicate your scalable business model to potential investors, you should maintain an alternate pitch or story about your business. The physical manifestation of your pitch is a deck usually 10-12 slides and no more and as usual as you can make it. More important than the physical deck, though is really developing a great story to tell. After all, there is going to be a lot of moments when you have the opportunity to pitch someone, but won’t happen to have your deck handy. Every great STORY HAS Abeginning a middle and an end. The beginning is about setting the scene and introducing compelling characters to whom your audience can relate. The middle is about explaining a challenge that your main character faces. The end is about how your character resolvesthis problem in a satisfying way. Your pitch should unfold the same way. You need to start by explaining to investors, who the user of your solutions is, the more vivid picture you can paint the better. You then need to explain the incredibility frustrating or expensive problem your user faces. A combination of anecdotes or case studies to make the problem seem real with data to explain the size of the problem is ideal. Finally you need to end your pitch by showing how your solution solves this problem and it’s really important that you do this in the simplest terms possible. Finally the epilogue to your story is explaining how you scale your business into a really big interesting market.

About the author

Sandra Chinedu

Chinedu Sandra is an Entrepreneur within the I.C.T space and loves blogging. She is on the Honour list of GEM, a World Bank Project for start-ups in Africa.

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