Do you have an idea for a new business? If you ask your friends they will respond enthusiastically "what a great idea!" Or, if you ask current customers what they think of a new product or service, they are also likely to be enthusiastic and support your idea.
But, unfortunately, an idea is not necessarily a business opportunity. You could write a business plan to test that terrific idea and develop it into a business. However, after all of that work most business plans don’t survive their first encounter with a customer.
At SCORE we draw a clear distinction between a great idea and a great opportunity. A great opportunity has a tested business model with clearly defined customers who have a demonstrated need, and it has a profitable, scalable growth path. A great opportunity can benefit from a business plan, while a great idea is just an idea.
How do you transform a great idea into a great opportunity? We use a proven, one-page tool called a Business Model Canvas. Working with our clients, we guide them through the steps of defining, testing, and refining the business concept – the customers, their needs, alternative offers, and delivery approaches. This approach is not easy and it requires weeks, if not months, of concerted effort. But you end up with either a viable business opportunity or no-go decision.
The four-part Business Model Canvas is deceptively simple. The first part is related to "what" is being proposed. Then comes a second part related to "how," followed by the third and fourth parts of simple first-cut calculations of revenues and costs.
The business model emerges from a series of questions in each part - for example in the first part the Business Model Canvas asks questions that define a potential customer, describes a day in the life of that individual, enumerates the specific benefits to that customer of the product or service, and provides details on how to reach that customer with marketing and sales campaigns. Once the questions in all four parts have some initial answers, testing the business model requires developing a minimum viable product, and getting out the door to discuss the concept with potential customers, suppliers, and partners. More often than not, the results of these meetings lead to adjustments to the business model.
SCORE Bucks County has used the Business Model Canvas to evaluate and refine a wide variety of ideas, ranging from a picture frame, to a chair, to a concept for men’s ties, to a business designing barriers for exercise circuits. The end result is, most often, a different business than the one with which the client walked in the door. Occasionally, the result is a decision that it was neither a great idea nor a great opportunity. Either way, the Business Model Canvas, with assistance from SCORE, offers a much better way to launch a new business or develop a new product for an existing business than just trying to go it alone.
Do you have a great idea? Check out the Business Model Canvas – there is a lot of free information on the Internet, starting with your favorite search tool. Then come talk to a SCORE mentor if you need assistance. SCORE mentoring is free and there is no limit to the number of sessions you can attend. For additional help preparing a business model canvas, contact SCORE Bucks County at 215-943-8850 or visit buckscounty.score.org/.