University of Dayton Business Plan Competition

Business Models for your entry

www.UDBPC.com

Quick Def: Ecosystem

It is all the steps required to get a product to market.– From manufacturing to warehouse to retail to the

customer to installation and training

Example: Apple has spawned an entire ecosystem that supports the iPhone– Retailers, apps, accessories

A Business Model explains how you make money on a solution

Each piece of the ecosystem has costs/revenues—which are yours?

Five main areas of a Business Model

Admin

Content Creation/Design

Content/Service Distribution

Physical Creation

End Customer Sales & Support

All five get done—you don’t have to do all five!

It’s called a “make/buy” decision; you can do it yourself or outsource it to someone

“Fully integrated” doing all five steps yourself “Boutique” doing just one step

Search: Lay out the make buy at each step and change one at a time—it should lead to 20 different business models

Decisions to make in a Business Model

Produce, License or outsource? Bundle or stand-alone?

– Sell directly to end customers or to Goodyear?

Sell directly or to retailers (or even wholesalers) On-line, Bricks and Mortar? Can we outsource the admin of the company?

We have been using the word sell, any other models to think about?

Lease stems to Goodyear? Give them away—someone else’s promotion? Sell ads (weak on this idea) Let customers re-sell them on to friends

Charge someone else for them

Look for products in a market failure

Buyers and sellers cannot come together for some reason

You bring them together– Create a marketplace– Buy from sellers, transport to buyers– Consignment– Hired gun for buyers– Sell expertise in grading quality of stuff to be bought– Arrange logistics between buyer and seller– Arrange financing

Ask these questions of your product/service too!

Heroin Business Model

Give away the product for now, then charge later

Bundled goods

King Gillette gave away razors and sold blades

HP sells printers at a loss and marks up toner– Toner cloner

What makes for a good business model in the judge’s eyes?

Simple enough business you can make it work Adds value in the ecosystem so others

members of the ecosystem benefit Not a commodity product

– Same crafts at 100 booths at the Pork Festival

Overcomes market failure problems Serves a niche

Advice in your application

Be clear what steps you perform and which you outsource

Show where you intend to charge for revenue

Talk about any additional revenues or variations on sales