entrepreneurship feasibility
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Boot Camp 4 Entrepreneurs
Session 2:April 16, 2012
5-6:30
Feasibility Testing & Agile Business Planning: Getting to a Minimum Viable Product
2
Introductions
Homework Review• SBA
• Art of the Start• Lean Startup
Crossing the Chasm
Target Niche Customer Pain Point
Emotional Solution
Pitch Your Prospect Activity
Entrepreneurship Steps Business Map
Strategy Scoreboard
RERO• Analysis Paralysis
MVP Get Out of the Building
GTD the SCRUM Way
Business Model
Bonus: E-Myth
Agenda – Session 2
Customer Pain
Emotional Solution/Value Proposition
How to communicate
Monetize & Make Process Better
Prototype & Sell Today
Agile Business Plan Worksheet
Market Feasibility
Financial Feasibility
Company:Version:
4
What is the Chasm?
• Space in lifecycle that can mean death• Valley of death between first customers and
the rest• Entrepreneur’s dip in the roller-coaster
5
How can you Cross the Chasm?
• Win the target customer• Bowl over the first bowling pin• Celebrate the niche target market• Listen to the customer pain point
6
What’s a Customer Pain Point?
• A complaint• “Too hard”• “Takes too much time”• Wish there could be more of• It is a problem for you• Feel need is unmet• Emotional need
Target Customer Pain• Guilt• Google
“complaints”
7Know thy customer
Who is your customer?
Age/Family Stage
Gender
Ethnicity
Income/SES
Location
Generation
Aspirations
8
Target Customer Pain• Guilt• Google
“complaints”• Takes too
much time and effort
Meaningful, Emotional Solution• Save your
loved ones• They’ll love
you• Saves you time
Prototype & Sell• Would you
use?• Would you
recommend?• How much
should I sell it for?
• Google tools
Business Model• How will you
make $• Wheel• Breakeven• 3 statements
Entrepreneurship Steps
9
Mission Vision
StrategyWhat can you sell today?
Values
Business Map
Agile Business Plan Worksheet
Market Feasibility
Financial Feasibility
Company:Version:
11
“I never want to build something that nobody wants to buy.”
Thomas Edison
Why do you need to test assumptions?
12
Sell/Measure
Learn & Refine
Build /Prototype
Why do you need to test assumptions?
13
Why do you need to test assumptions?
Prototype a Minimum Viable Product (MVP)
14
How will you fail forward?
• Extreme uncertainty• Don’t know what we don’t know
• Make unknowns known – Fast!• List your best guesses• Test your guesses
• List your learnings• Refine your offerings
15
Target Customer Pain/Unmet Need
Growing Niche Target
Value Proposition - Product/Service Offering
Communicated How?
Delivered How?Revenue Model/How will you
make $
Breakeven Point
List your Guesses to Test
16
“‘Nothing but perfection’ may be spelled, ‘P-A-R-A-L-Y-S-I-S.’”Winston Churchill
•Beware analysis paralysis•Release early, release often•Get to MVP and test assumptions
RERO
17
Why you have to ask for the sale to customer (before you’re “ready”)
18
Target Customer Pain
Emotional Solution/Value
Proposition
Record Learnings
“Get Out of the Building!”Pitch your Prospect
19
GTD•Do every task that comes at you in 2 min or less•Anything else is put on the calendar with start and end dates•You are allowed to “renegotiate”
SCRUM•Be accountable to someone else weekly•3 Questions: 1) What did I accomplish, 2) What am I going to accomplish next, 3) What I’m stuck on
Key to Success: ExecuteGetting Things Done (GTD)
The SCRUM Way
Agile Business Plan Worksheet
Market Feasibility
Financial Feasibility
Company:Version:
21
6 out of 10 businesses shut down in first 4 years. Why?
1. Poor Execution2. No Viable Market3. Too Much Leverage/Debt
4. Lack of Competitive Advantage
5. Picking a Niche That is too Small
6. Breakup of the Founding Team
7. Poor Pricing Strategy8. Growing too Fast
22
When will you Breakeven?
Financially Feasible:Why do I need the Big 3?• Smart business people know
• Do projected and actual statements monthly for 1-3 years
• Don’t be a “bean counter,” but do count your beans
• If you don't know how your money is moving, you won't know how you are doing
• 3 views on the financial health of your business
What’s the dif?• "Big 3" Review to Remember:
1. Income Statement shows profit for the period of time displayed
2. Cash Flow shows if you have cash to pay your bills for the period of time displayed
3. Balance Sheet shows how much your company is worth as a snapshot in time
What is an Income Statement?
• Income Statement (or Profit and Loss or P&L) shows how profitable your company is
• Profit = all of your revenue - all of your expenses
• Profit matters because any profit that is gained goes to the business's owners
What is a Cash Flow Statement?• Shows if you have the cash to meet your bills when you
need to
• Different from the Income Statement• Cash flow is not “interested” in profit• Cash flow is “interested” in cash• Any kind of cash from anywhere
• Shows the cash coming in for the month and the cash going out for the month
• If you subtract the cash going out and come up short, you will need to get more cash
What is a Balance Sheet?
• Snapshot in time of how much your company is worth
•What your company owns, which are its assets
•What your company owes, which are its liabilities
•Gives your owner's equity or net worth• Net worth = assets (own) - liabilities (owe).
Let’s Review
• 3 views of your company’s financial health are important:
1. Income shows whether your company is profitable (revenue – costs) (leaving money for you, the owner)
2. Cash shows whether your company has money to pay its bills when needed (any cash – bills)
3. Balance sheet shows how much your company is worth (own – owe)
Agile Business Plan Worksheet
Market Feasibility
Financial Feasibility
Company:Version:
30
Love what you do
Franchise prototype
Top 5 Processes
Checklist Manifesto
Check the running of
the checklists
E-Myth
Building Something
Customers Want
31
Core Value Proposition
WebsiteBrand/logoFriendly GreetingsPayment Process
Brainstorm List to Exceed Expectations
Building Something Customers
Want
32
Introductions
Homework Review• SBA• Art of the Start• Lean Startup
Crossing the Chasm
Target Niche
Customer Pain Point
Emotional Solution
Pitch Your Prospect Activity
Entrepreneurship Steps
Business Map
Strategy Scoreboard
RERO• Analysis
ParalysisMVP
Get Out of the Building
GTD the SCRUM Way
Business Model
Bonus: E-Myth
Agenda – Session 2