Turning Your “ShinyObject” Into anInvestable Buisness: Dr. Michael R. BurchamHow Does This Thing e. firstname.lastname@example.orgMake Money? w. www.michaelburcham.com t. www.twitter.com/michaelrburcham f. www.facebook.com/michael.r.burcham l. www.linkedin/in/michaelburcham
Lesson 1 Turning Your Shiny Object Into an Investable BusinessCreate a Legitimate Business Model:Be certain that you are using a business model that is known among theinvestment community and has successful companies using it.• Subscription• Transaction• Bricks and Clicks• Component Business Model• Direct Sales• Franchise• Freemium• Razor and Blades Model• Intermediary Distribution Model
Lesson 2 Turning Your Shiny Object Into an Investable BusinessSave the Writing of a Plan for Later:Begin with a process that turnsassumptions into facts!NoBusiness Plan survives the first contact with customers
Lesson 3 Turning Your Shiny Object Into an Investable BusinessFrame Your Idea:Know the drivers of Revenue and Costs.4 Things Drive Revenue:• The Product or Service• Customer Adoption• A Strong Distribution Channel• Customer Intimacy4 Things Drive Costs:• Human Capital – Labor• The Essential Ingredients for the Product or Service• The Process or Value Chain• Ability to Partner and Outsource
Lesson 4 Turning Your Shiny Object Into an Investable BusinessBuild Your Business Model from the Ground Up!Understand your competitors’ processes. Get insight as to whichcustomer needs are being met (and done really well) and which are not.Identify the opportunity to be DISRUPTIVE!
Lesson 5 Turning Your Shiny Object Into an Investable BusinessKnow Your Margin – And the Industry MarginMost private firms are “valued” based upon the acceleration of revenue(growth) and the cash flow margin (EBITDA) as compared to others inthe sector. A faster growth and a higher EBITDA % increase value.
Building Your Model “Think Architecture”Develop the Model:• Within the Model, what % of sales would each expense be?• How does this compare to the rest of the industry?Flowchart the Model:• Identify the Revenue Drivers,• Identify the Cost Drives, and the• Points of Differentiation & Value-Add.Stress Testing:Should Key Revenue or Cost Drivers vary 5-10%, what happens to the business model?
Lesson 6 Turning Your Shiny Object Into an Investable BusinessStay Focused on “Magnetic North” All business plans and models are off “magnetic north” by 10-15 degrees. Closing the Gap Defines Success
Investors realize that all new businesses must walk through the valley of death prior What to becoming a Viable Business.Investors The ability of a business venture to pass through this valley in a predictable and Want timely way determines its ultimate viability. 18
One Entrepreneur’s ViewThe Pitch:• Direct and Concise.• Passion and Enthusiasm Sells.• Know Your Customer/Audience.• Listen, Ask Questions, and Know Your Stuff.• Elevator Pitch-Customer and You.• No NDA’s.