Mr. Venture Capitalist #2 General Business

Introduction to the Series:

The purpose for the Mr. Venture Capitalist Series is to help you to have a holistic perspective and an intimate relationship with your business. It's only when you know what your business is truly capable of that you will witness high performance.

Red Flags

Just like any new relationship if there are too many red flags you should be concerned. Red flags in this case are the fact that you can't answer any purposed question with ease and clarity. Red flags mean you need to go to work to find out the answers.
 The Business Game

The business game is about maintaining a certain posture and confidence. The more you know about what you are doing the easier it will be to maintain this mindset. The more you know this the easier it will be to put together effective marketing and business strategies.

General Business

What is the market potential for your company's product or service?
What is the revenue potential for the industry, and what is its growth rate?
What determines if the opportunity is large enough?
How did you calculate market potential?
How do you determine industry sales and growth rate?
What makes your business different or unique?
Why would someone be "compelled" to purchase your product or service?
What specific needs does it address?
Is your product something the buyer needs or is it a luxury item?
How do you know that your business has high-growth potential?
What is it about your management team that makes them uniquely capable of executing on this business plan?
What are the primary risks facing this opportunity?
Who are your competitors?
What gives your company a competitive advantage?
What is unique about your company that gives it an edge?
Does the company have proprietary intellectual property in the form of patent, etc.? trademarks, copyrights
What do you own?
What can you protect?
When will your company break even in terms of profitability and cash flow?
How do you plan to acquire customers?
What are your company's customer acquisition costs?
Have you calculated average and target revenue per customer?
Do you know how many customers are required to break even?
Do you know the product sales cycle?
How do you plan to keep customers?
What drives customer satisfaction for this industry and for the product?
And, how do you know?
Have you conducted research in order to assess what is truly important to your customers?
Do you know what product features are critical vs. those that are ancillary?
Have you considered how you're going to support the product?
Have you considered the expenses associated with such support?
Will existing customers purchase your product or service again?
Will they recommend it to others?
Who is the end user of the product or service offering?
Is this a consumer-based business?
Will you sell your product or service to other businesses?
What do you know about the demand for your product or service in that target market?
What do you know about the buying habits of your target market?
Do you anticipate any roadblocks?
For example, will you have to educate the buyer?
What alliances or partnerships have you entered?
(e.g. joint ventures, marketing alliances, licensing arrangements, selling/distribution agreements,
channel partnerships, software agreements, etc.)
Do any of your alliances give you a competitive advantage?
Do they create barriers to entry?
Do they help you reach customers more efficiently?
What is the anticipated life-cycle of your product or service offering?
What are your current and future plans for investment?
for first-time buyers as well as for follow-on sales to existing customers (e.g. upgrades)?
What are your plans for R&D investments?
How will you continue to generate revenues when existing products run their course?
How do you plan to expand your labor force?
Have you used an executive search firm?
Do you have qualified candidates currently under review?
How will you compensate people, so as to attract, motivate and retain employees, while keeping labor costs under control?
What are the probable exit scenarios?
What is the planned "Use of Proceeds"?

Begin Studying:

Schedule regular readings on your industry; decide to read one to two hours daily. Start anywhere go everywhere. Read blogs, listen to industry podcasts, read company websites, press releases, and publications. Call companies and listen to their sales pitch, ask questions about their competition, prices, and, business model. Before too long you will have an accurate picture of all the nuances in the industry. Nothing will take the place of discipline and persistence in this area.

Also Part of This Series:

Venture Capitalist Series#1 Securing Experience

Having your FREE evaluation with a business coach is a $500 value.

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