Be clear about the difference between business ideas versus business models
Last week I went to support the Escape the City team at their latest event. If you are reading this, and dream of leaving your big corporate job, but have not yet worked out what that jump should be, I would suggest having a look at what Rob and Dom are doing. You will find weird and wonderful jobs, worldly adventures and expeditions to whet your appetite. They have big plans for this year – but check out what they are currently doing here.
Hosted in my favourite plush underground venue the Adam Street club, we were privileged to witness entrepreneur Henry Erskine Crum speaking about his digital innovations Spoonfed and Bullseye Hub. Both servicing the events and entertainment industry – they cunningly work together to cover both B2C and B2B, feeding content both ways. You can read Rob’s summary of all the key nuggets on the Esc the City blog here, but what particularly got my mind whirring was the discussion over business ideas versus business models:
A gentleman in the room asked how do you know when to progress a business idea, to which Henry responded that “there are endless business ideas, but they do not become a business until you have identified ways to generate revenue”. This is close to my heart, as it is something that I encounter regularly. As a result, much of my initial work with budding entrepreneurs is about helping them find a viable business model with multiple revenue streams.
Your typical ‘entrepreneurial type’ is usually brimming with wild and wonderful ideas that solve the problems encountered in everyday life, or that exploit opportunities that they have spotted. Those ideas that make it to market have multiple revenue streams identified from the start – and the business is launched with this vision clearly in mind.
How to monetise your ideas: The revenue streams open to you to monetise your idea very much depend upon your market – a digital platform is going to be very different to a new food product. However, the starting principles are the same. Ask yourself the following questions:
|Starting point||Examples in digital||Examples in FMCG|
|List all the possible ways your idea can generate revenue||- Subscription
– Newsletter feature
– Affiliate links
|- Sell direct to consumers
– Sell to retailers
– Sell to wholesalers
|List all the ways your business can be of value to other businesses / partners||- Surveys with your audience
– Data insight
|- Linked promotions|
|Consider any non-monetary ways in which your business can add value (for skill trades)||- Shared content
– Reciprocal links
|- Share distribution networks or manufacturing capability
– Trade retailer contacts
Once the revenue generation ideas have been scoped – you can begin testing them: What do others do? Ask people what they would pay for your service / product. Test and refine. Ultimately you will develop a robust business model, with multiple revenue streams. Some you will use from the start – others you will build to. Be flexible and learn as you go. The only hard and fast rule is launch knowing how your idea will make money, in order to make your idea into a business.
Please share your thoughts and examples.
The Nurture Network exists to make business strategy and marketing expertise accessible to entrepreneurial start-ups and brands, creating an on-demand marketing department just when it is needed.