| 31-Jan-03 |
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Scoring
Business Models |
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Confidential
and proprietary |
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| NUMBER |
QUESTION |
|
POINTS |
Michael |
Grade A |
Fedex |
Trivial |
Amazon |
Brymark |
Fuel |
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Dell |
Student |
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Pursuit |
.com |
.com |
Industries |
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.com |
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.com |
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| 1 |
Will your business model earn more
money for you than if you went out and got a job? |
|
| a |
|
YES |
|
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
|
| b |
|
NO |
|
0 |
|
| 2 |
Does your business require heroic
effors to be successful? |
|
| a |
|
YES-- I need to hit a home run like
the hoola hoop, Frisbee Trivial Pursuit or Pogs |
0 |
|
0 |
|
| b |
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NO-- good execution should make me
successful |
|
15 |
15 |
15 |
15 |
|
15 |
15 |
15 |
|
| 3 |
Will your business use a direct
sales approact, connecting directly between you and your customers/clients? |
|
| a |
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YES |
|
15 |
15 |
15 |
15 |
|
15 |
15 |
|
| b |
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NO |
|
0 |
|
0 |
0 |
|
| 4i |
Can your business harness guerilla
marketing or does it need a large upfront investment in traditional
marketing? |
|
| a |
|
YES-- can use guerrilla marketing |
|
6 |
6 |
6 |
|
6 |
|
6 |
6 |
|
| b |
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NO-- need upfront investment in
traditional marketing |
|
0 |
|
0 |
|
0 |
|
| 4ii |
Can your business use guerilla
marketing research? |
|
| a |
|
YES |
|
3 |
3 |
3 |
|
3 |
3 |
|
3 |
|
| b |
|
NO |
|
0 |
|
0 |
|
| 4iii |
Can your business use reverse
selling/solution selling/'buying on behalf of your client" type selling? |
|
| a |
|
YES |
|
10 |
10 |
10 |
|
10 |
10 |
|
| b |
|
NO |
|
0 |
|
0 |
0 |
0 |
|
| 5 |
Does your business have any of these
examples of "pixie dust" in the business model? |
|
| a |
|
You are amoung the first movers |
|
|
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YES |
|
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
|
|
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NO |
|
2 |
|
| b |
|
Your business model uses a lot of
creativity |
|
|
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YES |
|
6 |
6 |
6 |
6 |
6 |
6 |
6 |
6 |
|
|
|
NO |
|
2 |
|
| c |
|
You have some type of control over
factors of production, or a competitive advantage |
|
|
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YES--
I have some type of control over design or utility patents, copyright
material, |
8 |
|
8 |
8 |
8 |
|
|
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trademarks, franchises, licenses,
formulas, trade secrets, prime locations, etc. |
|
|
NO-- I am relying on good execution |
|
2 |
2 |
|
2 |
2 |
2 |
|
| 6 |
Do you have a personal network
and/or mentor that you can bounce ideas off of? |
|
| a |
|
YES |
|
8 |
8 |
8 |
|
8 |
8 |
8 |
8 |
|
| b |
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NO |
|
0 |
|
0 |
|
| 7 |
The market you are entering does has
entrenched competitors with deep pockets |
|
| a |
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YES |
|
0 |
0 |
|
0 |
0 |
0 |
|
| b |
|
NO |
|
15 |
|
15 |
15 |
|
15 |
|
| 8 |
You are entering an industry where
"all boats are rising" (the industry is growing) |
|
| a |
|
YES |
|
8 |
8 |
8 |
8 |
|
8 |
8 |
|
| b |
|
NO |
|
0 |
|
0 |
0 |
|
| 9 |
You and your team are comfortable
selling |
|
| a |
|
YES |
|
12 |
12 |
12 |
12 |
12 |
|
12 |
12 |
|
| b |
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NO |
|
0 |
|
0 |
|
| 10 |
Is your business model scalable? |
|
| a |
|
YES-- our systems and processes
don't need much more investment as our volumes grow |
8 |
8 |
8 |
8 |
|
8 |
8 |
|
| b |
|
Partly-- some parts of our systems
and processes don't need much and some do |
4 |
|
4 |
|
| c |
|
NO--
as volume grows, we have to add proportinionately more resources |
|
2 |
|
2 |
|
|
|
to service clients and customers |
|
| 11 |
Can you start this business with
limited amounts of capital? |
|
| a |
|
YES-- I can start with my own
resources plus friends, family and other forms of bootstrap capital |
12 |
12 |
12 |
|
12 |
|
12 |
12 |
|
| b |
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NO-- I need VC funding |
|
0 |
|
0 |
|
0 |
|
| 12 |
Can you pre-sell and get launch
clients upfront? |
|
| a |
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YES |
|
7 |
7 |
7 |
|
7 |
7 |
|
| b |
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NO |
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0 |
|
0 |
0 |
0 |
|
| 13 |
How long will it take to launch your
product/service? |
|
| a |
|
< 6 months |
|
10 |
10 |
10 |
|
10 |
10 |
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| b |
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6-12 months |
|
8 |
|
8 |
|
| c |
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12-24 months |
|
6 |
|
6 |
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| d |
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24-48 months |
|
3 |
|
3 |
|
| e |
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> 48 months |
|
0 |
|
| 14 |
How long is the sales cycle in your
business? |
|
| a |
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It's negative, I can pre-sell. |
|
12 |
|
12 |
|
| b |
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It's contemporaneous;
sales and cash in and cash out are simultaneous. |
|
10 |
10 |
10 |
|
10 |
|
| c |
|
It takes 30 days to sell
and 30 days to collect |
|
8 |
|
| d |
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it takes 60 days to sell
and 30 days to collect |
|
6 |
|
6 |
|
| e |
|
it takse 90 days to sell
and 30 days to collect |
|
4 |
|
4 |
|
4 |
|
| f |
|
it takes six months to sell and 30
days to collect |
|
2 |
|
|
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it takes a full year to seel and 30
days to collect |
|
0 |
|
| 15 |
How would you describe your product
or service? |
|
| a |
|
it's a custom product that requires
custom processing |
|
3 |
|
3 |
3 |
|
| b |
|
it's a standard product that is
mass-produced |
|
3 |
|
3 |
3 |
|
| c |
|
it's a standard product that is
custom-made |
|
0 |
|
| d |
|
it's
a custom product that is made from standard inputs and reverses out a lot of
the work |
12 |
12 |
12 |
|
12 |
|
|
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to clients who self help or
customize their own purchase |
|
| 16 |
Do you have partner(s)? |
|
| a |
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YES |
|
1 |
|
1 |
|
1 |
|
1 |
|
| b |
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NO |
|
6 |
6 |
|
6 |
|
6 |
|
| 17 |
Are you relying on great execution
with a good idea rather than a great idea with good execution? |
|
| a |
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YES-- great execution |
|
15 |
15 |
15 |
15 |
|
15 |
15 |
|
| b |
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NO-- great idea |
|
2 |
|
2 |
2 |
|
| 18 |
Can the business run/make money
without you? |
|
|
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YES-- I can make money 'while lying
on a beach' |
|
6 |
6 |
6 |
|
6 |
|
|
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NO-- my business needs me to be
there most of the time to succeed |
|
2 |
|
2 |
2 |
|
2 |
2 |
|
| 19 |
How long will it take to get to
breakeven? |
|
| a |
|
< 6 months |
|
10 |
|
10 |
|
| b |
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6-12 months |
|
8 |
|
8 |
|
| c |
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12-24 months |
|
6 |
6 |
|
6 |
|
| d |
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24-48 months |
|
3 |
|
3 |
|
| e |
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> 48 months |
|
0 |
|
0 |
|
0 |
|
| 20 |
How will you handle expansion? |
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|
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I can handle a global market from
one location |
|
12 |
12 |
|
12 |
12 |
|
12 |
|
|
|
I need to establish branch offices
in other cities to expand |
|
0 |
|
0 |
|
0 |
|
|
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I can franchise the business |
|
3 |
|
|
|
I can 'branchise' the business with
agents |
|
5 |
|
5 |
|
| 21 |
I plan on using the following sales
channels (select as many as are appropriate) |
|
|
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Franchisees |
|
1 |
|
|
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Online Affiliates |
|
3 |
|
3 |
|
|
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A network of Distributors |
|
2 |
|
|
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Independent Agents |
|
1 |
|
1 |
|
|
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My own direct sales efforts and that
of my team |
|
8 |
8 |
8 |
8 |
8 |
|
8 |
8 |
|
|
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Trade Shows |
|
3 |
3 |
|
3 |
3 |
3 |
3 |
|
|
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My web site with SEO (Search Engine
Optimization) |
|
5 |
5 |
5 |
|
5 |
5 |
5 |
|
|
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Online white labelling |
|
3 |
|
|
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International Subsidiaries |
|
3 |
3 |
3 |
3 |
|
3 |
|
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Branchisees |
|
3 |
|
3 |
|
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Alliance Partners |
|
4 |
|
4 |
|
4 |
4 |
4 |
4 |
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| 22 |
We can turn services into products
by linking our clients' needs directly with our supply chain |
|
|
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YES |
|
6 |
6 |
6 |
|
|
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NO |
|
1 |
|
1 |
1 |
1 |
1 |
1 |
|
| 23 |
We can provide Customer Service that relies
heavily on self help FAQs |
|
|
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YES |
|
4 |
4 |
|
4 |
|
|
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NO |
|
1 |
|
1 |
1 |
1 |
|
1 |
1 |
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| 24 |
How complex is the execution of your
business likely to be |
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Very complex-- a lot of steps and a
lot of things need to go right including taking care of |
4 |
4 |
|
4 |
4 |
4 |
|
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technical and market risks but the
payoff will be great if it works |
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I have kept it simple and the
payoff, if it works, is still huge |
|
6 |
|
6 |
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I have kept it simple and the payoff
is limited but still better than if I got a JOB |
3 |
|
3 |
3 |
|
| 25 |
I plan on: |
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Doing everything in house and being
integrated vertically |
|
1 |
|
1 |
|
1 |
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1 |
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Focusing on my core competency and
sub-contracting everything else out |
|
5 |
5 |
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Doing a lot of things in house and
contracting out a few non critical things |
|
3 |
|
3 |
|
3 |
|
3 |
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| Total Score |
|
247 |
258 |
160 |
134 |
146 |
202 |
222 |
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| Maximum Score |
|
275 |
275 |
275 |
275 |
275 |
275 |
275 |
275 |
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| Percentage Score |
|
90% |
94% |
58% |
49% |
53% |
73% |
81% |
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| If your score is: |
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Then one can surmise
that: |
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| less than 50% |
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You
will need a lot of good luck to be successful. You may need to create the
kind of near hysteria that spawned success for the Hoola Hoop, the Frisbee,
Trivial Pursuit and Pogs |
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and
no one really seem s to know how to do this with any great consistentcy. It
is kind of like trying to create a hit film or song. It isn't easy to predict
success here. |
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Maybe you should rethink
your business model or, if not, well then "Good Luck" (or perhaps
you may want to start buying lottery tickets.) |
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| 50 to 64% |
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Maybe you are like Fred
Smith of Fedex fame-- he was smart, determined and was prepared to do pretty
much whatever he needed to do to |
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become successful. You too will likely need
this kind of commitment to be successful with a busines model score in this
range. |
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| 65 to 89% |
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You
will probably still have to have great execution and a lot of time to achieve
the success you are looking for. Great businesses |
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take at least 7 to 12
years to build and often a lot longer. |
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| 90% or above |
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You may have a 'can't
miss' opportunity on your hands except that there is no such thing as a
'can't miss' opportunity. |
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Having
said that, you do have an extraordinary business model and with an abundance
of effort, focus, concentration and some |
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luck,
you should be able to plan on success. Planning for success is a position to
be envied-- you aren't trying to 'capture lightning in |
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a bottle' like the Hoola
Hoop folks needed to do before they could enjoy success and you don't have to
win the lottery of life to become rich and successful. |
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Copyright. Dr. Bruce M.
Firestone, Ottawa, Canada. February 2003. |
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With
the assistance of Students Ryan North and Kevin Bennett and the entire |
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Entrepreneurialist
Culture Class at the Sprott School of Business 2003. |
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www.dramatispersonae.org |
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