Additional information:
Critical success factors - this analysis is where macro industry analysis meets
micro industry analysis and needs to identify your minimum and longer-term
factors which your start-up must bring to the market vs. the incumbent competitive
industry players or smaller players already in business in the space
which you're enterin. And, what developments do you need to make in
order to achieve differentiation/cost focus over time, e.g. again, you
could apply Porter's Generic Strategies model to help you alt east generically,
if not yet specifically.
CA - Competitive advantage(s) overall & USP -
Unique Selling Point? And is the CA also the USP? Once you have
articulated the above areas, in detail and extensively, your
competitive advantage(s) will become more apparent, hopefully! But
business doesn't stand still and neither do your competitors. And if you have
an actual, factual USP, that's positive. And it might be one that
translates straight from your competitive advantage, but more often,
not. Also, why would your own CA and USP remain protected and safe? Your
business shouldn't stand still either. Also, as mentioned, you might be
fortunate to have an actual, factual USP, but probably not. Therefore you will
need to create a value-based USP, which builds on a created USP, still built on
facts (not lies!), but one that exaggerates and specifies the value of the
business to your market in a credible, creative and value-added way of thinking
- wholly and specifically relevant to your audience.
Financial Sustainability:
Here you are
returning to how you sustain your business in a stronger footing immediately as
well as medium-to-long term, in terms of your costs in
existing but also growing, and the revenues, in how you maintain
and grow revenue streams.
This is where
you must ensure fixed costs are minimized and depreciating assets are
minimized, or the latter certainly, driven out of the business. For
example, if you're leasing an office or premises, is there a way of
reducing that rent, or including the landlords into the business, or perhaps
even to think of purchasing a premises as an asset. The
UK's Pizza Express did this as part of their initial and long-term
business value for the majority if not all of its key restaurant sites, thus
creating fixed, appreciating assets, with property over the
long-term.
Also, if you
purchased new or used machinery, vehicles or other
physically depreciating assets, selling and then releasing such
assets would rid the depreciation and leasing/renting instead,
would create non-current assets, this reducing financial risk
in the balance
sheet, though the balance sheet must balance.
But if your
balance sheet doesn't balance, you MUST make every effort to identify what
might be creating the imbalance. After having made every effort and the balance
sheet still does not quite balance perfectly, you can create a 'balancing adjustment figure' with
supporting rational and justifications as to why you think balancing was
challenging and what the adjustment could represent. Businesses do this
all the time with their accountants and auditors, but as entrepreneurs we must
understand every penny into the business and every penny out.
"If you look after your cents, the dollars look after themselves" and
that business attitude works for every currency and country in the world.
But only in the context of REVENUE growth. Not just reducing costs!
And risk can never be taken away. It's part of being a start-up and an
entrepreneur.
In the
sustainability section, you will be expected to increase your revenues
and margins,
not simply on revenues per month or even over x2 years worth of cash-flows, the
2nd providing you with extra marks potentially, but also the increased
sources of revenues, e.g. from an additional product or service, an
in-app purchase, accessories or charged consultation and advice fees for
clients. And in your detail, are your variable costs increasing when expanding volume output,
as well as creating extra revenue streams, but also reducing costs per unit of
output, as would occur when producing with suppliers based on
volume orders for example. That's your actual and potential increasing economies of scale.
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