Developing your business as a team

Developing your business as a team

Who?

Jane Nolan MBE Teaching Fellow in Enterprise (ICMuS)

Rise Up Visiting Entrepreneur at Newcastle University MD Venture Coaching and Consulting Ltd

3rd Year PGR SELLL (part time)

XING A commercialisation and planning Tool 90 key decisions Familiarises you with the terminology of

business planning and development An opportunity to work on your idea and

consider how you would turn it into a business

Consider your goals and how to achieve them

Your Business What is the Market? How will you Approach it? What is your business model? What is the Unique Selling Proposition? What is the competition and what advantage does

your product or service offer? Who are you targeting? What are the Risks and Rewards? What Knowledge or intellectual property is involved?

Patents, Trademarks? Is it legal, Ethical, Sustainable? What skills and abilities will be needed in your Team?

Business StructuresType Description Advantages DisadvantagesSole Trader Sole owner,

can employ others

Easiest and cheapest to establish

Owner personally responsible without limit for business losses. No income if ill/on holiday

Price, A and Sarmiento, T, 2008

Business StructuresType Description Advantages DisadvantagesUnincorporated Association

Group of people agree to come together for a common purpose, with democratic constitution.

Easy and cheap to establish

Not a separate legal entity.Personal liability for costs eg leases, loans, contracts, losses

Business StructuresType Description Advantages DisadvantagesPartnership Joint

ownership across partners

Spreads risk, more attractive to investors, broader skill and knowledge base

All partners are responsible for the actions of others


Business StructuresType Description Advantages DisadvantagesLimited Co (Ltd) Creates

separate legal entity owned by shareholders, Company has a legal identity

Clear structure for seeking funding, attractive to investors, limited liability for debts

Higher set up costs, accounts are public and must be filed with Companies House


Business StructuresType Description Advantages DisadvantagesLimited Liability Partnership LLP

Half way house between partnership and Ltd Co, mainly used for firms of professionals eg Consultants, solicitors

Separate legal entity, can own and hold property, employ people.Limited liability.

Each partner is regarded as a self employed person for tax purposes, not taxed as a company.


Business StructuresType Description Advantages DisadvantagesCommunity Interest Company (CIC)

Ltd Co which exists to create community benefit – must be either limited by shares or guarantee

Separate legal Identity. Familiar form which may provide better access to financing options. Ltd Liability

Must file accounts with Companies House. Cannot be a charity.


Business StructuresType Description Advantages DisadvantagesLimited Liability Co with a social purpose – limited by Guarantee (CLG) or by Shares (CLS)

Separate legal entity which has express social objectives

Separate legal Identity. Can be registered as a Charity. Ltd Liability

Must file accounts with Companies House.


What Finance will you need and where might it come from?

YOU (£0-£10k)

Seed Funds

– Friends and Family (£0-£50k)

– Grants and Competitions (£0-£50k)

– Loans (£10k-£800k)

Equity Finance

– Angels (£20k-£500k)

– Venture Capitalists (£1m-£20m----?)

Initial Public Offering – established companies

– Company shares traded on the stock market

Xing Idea in 10 words or less SMART Goal S? M? A? R? T?

Xing themes Strategy – Goals, structure, R&D, training, eventual

exit Actions – practical actions – bank account, legal

entity, business plan, IP Finance – how will you finance it? Marketing – market research, brand, understanding

your market, pricing, segmentation, distribution People- creating an effective team, complementary

skills, training needs, collaborating/outsourcing

Identifying your Value Proposition and Researching your Idea

Working out your Business Model Osterwalder and Pigneur (2010) suggest

that there are nine building blocks to a business model.

They worked with 470 practitioners from 45 countries to develop a framework

A visual business planning tool

Business Model Canvas Your business model is your rationale

of how your organization creates, delivers, and captures value

Value can be economic, social, or other forms

Business Model Canvas = helps you consider your business model

http://www.businessmodelgeneration.com/canvas



Key PartnersSome activities are outsourced and some resources are acquired outside the business

Key Activities… by performing a number of key activities

KeyResourcesKey resources are the assets required to offer and deliver the described elements

ValuePropositionsIt seeks to solve customer problems and satisfy customer needs with value propositions

CustomerRelationshipsCustomer relationships are established with each segment

Customer SegmentsA business serves one or several customer segments

Cost structureThe business model elements result in the cost structure

Revenue streamsRevenue streams result from value propositions successfully offered to customers

ChannelsValue propositions are delivered to customers through communication, distribution and sales channels

Source: Osterwalder and Pigneur (2010)

The Business Model Canvas

Value PropositionsIt seeks to solve customer problems and satisfy customer needs with value propositions

What value do we deliver to the customer?Which of our customers problems are we helping to solve?What bundles of products and services are we offering to each customer segment?Which customer needs are we satisfying?

Customer Relationshipsare established with each segment

What type of relationships does each of our customer segments expect us to establish and maintain with them?Which ones have we established?How are they integrated with the rest of our model?How costly are they?

Customer SegmentsA business serves one or several customer segments

For whom are we creating value?Who are our customers?What are their needs?How can we segment the Market?Niche approach?Mass market?Multisided platforms?


Key PartnersSome activities are outsourced and some resources are acquired outside the business

Who are our key partners?Who are our key suppliers?Which key resources are we acquiring from our partners?Which key activities to partners perform?

Key Activities ….by performing a number of key activities What key activities do our value propositions require?Our distribution channelsCustomer relationshipsRevenue streams

Key Resources the assets required to offer and deliver the described elementsWhat key resources do our value propositions require? Human (the Team), physical, financial, IP? Our distribution channelsCustomer relationships. Revenue streams.


Cost StructureThe business model elements result in the cost structure

What are the most important costs inherent in our business model?Which key resources are most expensive?Which key activities are most expensive?

Revenue StreamsFor what value are our customers really willing to pay?For what do they currently pay?How are they paying?How would they prefer to pay?How much does each stream contribute to overall revenues?

Channels Through which channels do our customer segments want to be reached? How are we communicating with and reaching our customer segments to deliver and distribute our value proposition? How are our channels integrated? Which work best? Which ones are most cost efficient?

What will your business model be? Manufacturing? Service delivery? Creating a technology platform? Being an R&D company and selling the

technologies to others? Licensing your technology? Working with mass or niche markets?

What is your business model?

Use post it notes to consider aspects of your business model and put them on the canvas

Start with your value proposition Work out your business model Then research your proposition Work out your costs, revenues and finance

needs

Any questions?

Documents

Developing your business as a team