Resources on Business Models

This Wikipedia entry explains that:

"A business model describes a company's:

value propositions: The company's offers which bundle products and services into value for the customer. A value proposition creates utility for the customer.

target customer segments: The customer segments a company wants to offer value to. This describes the groups of people with common characteristics for which the company creates value. The process of defining customer segments is referred to as market segmentation.

distribution channels: The various means of the company to get in touch with its customers. This describes how a company goes to market. It refers to the company's marketing and distribution strategy.

customer relationships: The links a company establishes between itself and its different customer segments. The process of managing customer relationships is referred to as customer relationship management.

value configurations: The configuration of activities and resources.

core capabilities: The capabilities and competencies necessary to execute the company's business model.

partner network: The network of cooperative agreements with other companies necessary to efficiently offer and commercialize value. This describes the company's range of business alliances.

cost structure: The monetary consequences of the means employed in the business model.

revenue model: The way a company makes money through a variety of revenue flows.

The process of business model design is part of business strategy. The implementation of a company's business model into organizational structures (e.g. organigrams, workflows, human resources) and systems (e.g. Information Technology architecture, production lines) is part of a company's business operations."

This Particletree post provides links to additional resources on business models, including:

"the “Freemium” Plan - Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc, then offer premium priced value added services or an enhanced version of your service to your customer base.

Business Models on the Web - A thorough review of potential business models including brokerage, advertising, Infomediary, merchant, manufacturer, affiliate, community, subscription, and utility.

Beyond Adsense: A Business Model – A checklist of the various business models available to the developers of live web applications and services.

Business Models – This essay is dedicated to Web2.0 and has a section dedicated to business models and how they suffer from a lack of defined revenue opportunities..."

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Selling a Business Tax Checklist

"1.Get good tax and legal counsel when you establish the initial form of your business – C Corp, S Corp, or LLC etc.

2.If you establish a C Corp, retain ownership of all appreciating assets outside of the corporation (land and buildings, patents, trademarks, franchise rights). Note: in a C Corp sale, there are no long-term capital gains tax rates only income tax rates. Long-term capital gains can only offset long-term capital losses. Personal assets sales can have favorable long-term capital gains treatment and you avoid double taxation for these assets with big gains.

3.Look first at the economics of the sales transaction and secondly at the tax structure.

4.Make sure your professional support team has deal making experience.

5.Before you take your business to the market, work with your professionals to understand your tax characteristics and how various deal structures will impact the after-tax sale proceeds

6.Before you complete your sales transaction work with a financial planning or tax planning professional to determine if there are strategies you can employ to defer or eliminate the payment of taxes.

7.Recognize that as a general rule your desire to “cash out” and receive all proceeds from your sale immediately will increase your tax liability.

8.Get your professionals involved early and keep them involved in analyzing various bids to determine your best offer."

Read more in this article from selfemployedweb.com

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Pittsburgh Angel Fund Launches

Innovation Works, the Pittsburgh Life Sciences Greenhouse, Carnegie Mellon University, the University of Pittsburgh and the Pennsylvania Department of Community & Economic Development released today a request for proposals seeking a professional manager for the Pittsburgh Angel Fund. These organizations have committed a combined total of $2 million to create the Pittsburgh Angel Fund and to attract a qualified fund manager.

The fund is expected to pool at least several million dollars in additional investment from individual investors to be deployed in high- potential, early-stage technology companies including those being created in the region. Though a number of nonprofit organizations are providing seed capital and support to the Pittsburgh Angel Fund, the fund itself will be an independent, for-profit entity with the goal of delivering a strong financial return to its limited partners, the majority of which will be individual angel investors.

Proposals are being sought from potential fund managers, including individuals and firms with a strong track record in evaluating, financing and assisting early-stage technology companies. In addition, applicants will be evaluated partly on their ability to raise additional investments to increase the size of the angel fund. The sponsoring organizations have issued a request for proposals ("RFP") outlining the information that must be addressed by potential fund managers, as well as the selection process. To receive a copy of the RFP, interested applicants should contact Matt Harbaugh, Chief Investment Officer of Innovation Works at 412-894-9507 or via email at mharbaugh@innovationworks.org. Proposals from potential fund managers must be submitted by Friday, October 27, 2006.

From this press release

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Elevator Pitch Basics

"When you deliver an elevator pitch, you have to clearly and succinctly address the following points:

1. What’s the idea?
2. What’s the status of the idea or business?
3. What market or markets does the business address and are there any testimonials or customer feedback?
4. Why do you believe you have the advantage in the marketplace relative to the market needs?
5. What’s the competition in the marketplace?
6. What’s the revenue model (such as “e-commerce,” or “wholesale”)?
7. Who’s the team that’s going to make the business succeed?
8. What’s the longer term vision, the “end-game,” for the business and the projected return on investment for investors? (some examples are: “the business will distribute big profits to investors from cash flow by year X”, or “the business will be acquired by another company for $XYZ”)
9. What’s the total funding required to execute the business plan?
10. What amount of financing are you seeking initially and what are the terms of investment?"

Read more in this Cultivate Greatness post

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Everything You Always Wanted to Know About Resigning

Before you quit your job to open the business that you have been dreaming of since who knows when, stop by The Complete Guide to Resigning. The guide from i-resign.com provides you with "everything you ever needed to know about quitting your job, from writing a magnanimous letter to exiting with style."

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What Budding Entrepreneurs Should Really Learn in School

Guy Kawasaki notes the following as some of the things he wished he had learned before he left graduate school:

"1. How to talk to your boss. In college, you’re supposed to bring problems to your teachers during office hours...[but in the real world] your role is to provide answers, not questions...

2. How to survive a meeting that’s poorly run...vow to yourself that someday you’ll start a company, and your meetings won’t work like this.

3. How to run a meeting...understand that the primary purpose of a business meeting is to make a decision...

4. How to figure out anything on your own...

5. How to negotiate...

6. How to have a conversation. Generally, 'Whassup?' doesn’t work in the real world...

7. How to explain something in thirty seconds...

8. How to write a one-page report...

9. How to write a five-sentence email...

10. How to get along with co-workers...

11. How to use PowerPoint...

12. How to leave a voicemail... Two power tips: First, slowly say your telephone number once at the beginning of your message and again at the end...Second (and this applies to email too), always make progress...

One last thing: the purpose of going to school is not to prepare for working but to prepare for living...there is much more to life than work, so study what you love."

Read more in this post from Signum sine tinnitu--by Guy Kawasaki

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Marketing Mistakes Made by Entrepreneurs

"The top five mistakes entrepreneurs make when they market

by Seth Godin

1. Expecting gratitude in exchange for having done something that was hard...I'm not going to buy your brownie/consulting/services just because you worked hard on it.

2. Spending [on marketing] as a substitute for...making your product better...

3. Not realizing that...your marketing better be as good as everything else...

4. Listening to other people...

5. Failure to measure..."

Read more about this advice from Seth Godin at this WorkHappy.net post

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Questions Potential Investors Ask

"The Market
* How large is the specific market for your product?
* What growth is expected in this market?

The Product/Production
* What, specifically, are the company's products/Services?
* How are they better than other products or alternative solutions?
* Are there patents? What, specifically, do they protect?

Competitive Positioning
* Overcoming Inertia - What will it take to get customers to change what they are using/doing today?
* Where will you fit into the industry?

Product Development
* What work remains?
* Identify major development risks or challenges.

Marketing and Sales
* Briefly explain the selling cycle.
* How will you raise customers' awareness of your product and stimulate buying?
* What channels of distribution will you use to deliver your products?

* What is your background and previous experience?
* Where did the idea for the company come from?
* How did you get involved with the company?
* Who is presently managing the company? What are their credentials especially regarding ….
o Financial management
o Marketing
o Product development and production

Business Strategy
* Identify the steps needed to reach positive cash flow.
* How has the company been funded to date?
* What is the business model? (i.e. how will the company make money?)
* Do you have any corporate partnerships in place?

* What kind of revenues can the business produce over the next five years? Profits?
* How will the investor get his money back? Through an IPO? Acquisition? When?

Requested Funding
* How much capital is required to carry the company to the next stage?
* What is your current "burn-rate."
* How much hard-money (cash) have the founders put in?
* What are your startup or development costs?
* What is your projected three-year revenue stream?
* How much are you planning on investing?
* What do your projected expenses look like for three years?
* What are your three-year sales forecasts?

If you anticipate being acquired
* Identify the two or three most likely buyers
* Explain why they would be interested"

Read more in this excellent post from EntrepreneurBlog

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IPO Alternatives: Reverse Merger and DPO

"Reverse Merger
Take your private company public the easy way by purchasing a dormant, public company.

Direct Public Offerings
Take your business--and your quest for funding--directly to the public by selling shares in your company."

Read more in this series of articles from Entrepreneur.com.

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Criminal Justice Flowchart

"This flowchart of the events in the criminal justice system updates the original chart prepared by the President's Commission on Law Enforcement and the Administration of Justice in 1967. Accompanied by a clarifying text description, the chart summarizes the most common events in the criminal and juvenile justice systems including entry into the criminal justice system, prosecution and pretrial services, adjudication, sentencing and sanctions, and corrections.

Electronic files of both full color and black and white versions of the chart available for downloading [from the Bureau of Justice Statistics.]"


When Squirrels Attack

"Several people attacked by a squirrel at Central Park said they had one word for the animal:


Read more in thisLiveScience.com article

Risk is a Gift You Give Yourself

"'When in your life did you feel most alive?'...

I have asked hundreds of people the same question and have been struck by the similarity of their answers. In particular I've noticed 3 themes. (1) Nearly everyone describes a scenario in which they pushed themselves out of their comfort zone and took risks. (2) The OUTCOME of taking the risk is rarely the main thrust of the story - it's usually the process of taking them that they remember most fondly. (3) When people finish their story, they've often got a big smile on their face.

Consider This:

The gift of risk-taking doesn't lie in what you achieve by risking - it lies in who you become as a result of the process. Confident. Engaged. Alive..."

Read more in this Doug Sundheim post found via an Arnie Herz item.

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Sounds of Silence

This struck me kinda funny, even though I recognize the value of quietude in meditation practice:

"These audio files consist of various lengths of silence..."


Yiddish People

I am fascinated by the Yiddish language, particularly the way some words seem to actually embody what they describe. Consider the following list of Yiddish people. I am sure there are many more.

Baleboost - boss

Bulvan - cement head

Bubba-Myse - liar

Bubbe - grandmother

Bubeleh - (little grandmother) term of endearment

Gonif - thief, crook, swindler

Kaker - old fart

Kibbitzer - wise guy

Macher - a big wheel, the real deal, celebrity

Mamala - baby

Maven - expert

Mensch - a decent, upright, honorable person of good character

Meshuggeneh - crazy, obsessive person

Nebbish - a wimp, nerd, dork

Nudj - little pest

Nudnick - a pest and a bore

Putz - schmuck

Rabbi, Rebbe - teacher, spiritual leader

Shmuck - idiot

Shnook - unassertive patsy; gullible dummy

Shnorrer - a moocher, freeloader, cheapskate

Shmegegge - a no talent, someone who brings nothing to the party

Shlemiel - foolish person, hard-luck type, clumsy person

Shlimazl - unlucky person; born loser

Shlump - drip; party pooper

Shmo - jerk

Yenta - a meddlesome gossip

Zayde - grandfather

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Life is More

I recently rediscovered notes I took from an article I read in 1997. These ideas still resonate with me and I thought I would share them. If you know the article where I originally found these words, please let me know so I may make proper attribution.

Life is more than a striving for money, power and position. There will never be enough money. Money does not bring satisfaction. Power is fleeting. Position is even less permanent.

Many lawyers are engaged in a frantic chase for the brass ring just out of reach, responding to the siren call of billable hours, revenues origination, selling their lives for money, one hour at a time.

The quality of a lawyer's life is an important element of law practice.

A complaint echoes throughout the land, "The practice of law is no longer a profession. It is a business."

The focus of our practice must be on service to our clients, with monetary reward a by-product of that service. We can not let money become the main goal with service the by-product.

Take responsibility for your present situation and your future. Do not blame others. Focus your efforts on those areas you can truly influence.

Double the time on the job you use your strengths and talents.

Develop a plan to solve a challenge or creating something of value that will be both beyond expectations and of major value to your organization. Clarify with the person to whom you report your mutual expectations of each other.

Double the time you spend listening to others.

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Dream the Possible Dream

"The secret to breaking out of the box is to dream. Don’t be afraid to dream. Don’t be ashamed. Don’t be held back by your own doubts. Don’t be held back by others’. Dream big and dream real. And then keep trying different methods to fulfill your dream."

So concludes this wonderful post by J. Timothy King citing the following passage from The Bear Necessities of Business: Building a Company with Heart by Maxine Clark, the founder of Build-A-Bear Workshop®:

People often ask how I was able to take the rough idea for Build-A-Bear Workshop and turn it into such a successful business. Above all, it started when I simply allowed myself to dream. And I’m a true believer in dreaming big.

Since the very beginning, I didn’t put restrictions on my vision, nor did I let the way others made or sold stuffed animals stand in my way. Instead, I allowed myself to dream of this unique business going from one store at the Saint Louis Galleria to something that could be as huge as I thought it could be. My dream eventually came true, and continues to evolve even beyond my wildest imagination. But you must start by believing you can truly achieve whatever you set your mind to, no matter how monumental it might seem.

Most people don’t do that. They stymie themselves and their ideas with negative thoughts. They’re so caught up in what they can’t do that they don’t think about how much they can accomplish. As Marianne Williamson wrote in Return to Love, “Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our Light, not our Darkness, that most frightens us."

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Seven Habits Revisited

In this article from Motivation Articles, Essays, Tips and Advice, author Steven Covey revisits and reinvisions his Seven Habits of Highly Successful People, stating:

"I see seven unique human endowments or capabilities associated with The Seven Habits of Highly Effective People. One way to revisit The Seven Habits of Highly Effective People is to identify the unique human capability or endowment associated with each habit.

The primary human endowments are 1) self-awareness or self-knowledge; 2) imagination and conscience; and 3) volition or will power. And the secondary endowments are 4) an abundance mentality; 5) courage and consideration; and 6) creativity. The seventh endowment is self-renewal. These are all unique human endowments; animals don't possess any of them. But, they are all on a continuum of low to high levels.

Associated with Habit 1:
Be Proactive is the endowment of self-knowledge or self-awareness, an ability to choose your response (response-ability)...

Associated with Habit 2:
Begin With the End In Mind is the endowment of imagination and conscience...

Associated with Habit 3:
Put First Things First is the endowment of willpower...

Associated with Habit 4:
Think Win-Win is the endowment of an abundance mentality. Why? Because your security comes from principles...

Associated with Habit 5:
Seek First to Understand, Then to Be Understood is the endowment of courage balanced with consideration...

Associated with Habit 6:
Synergize is the endowment of creativity...

Associated with Habit 7:
Sharpen the Saw is the unique endowment of continuous improvement or self-renewal to overcome entropy..."

What Makes Angels Tick?

Brad Feld writes:

"David Cohen, a Boulder-based entrepreneur and angel investor who I’ve done a few angel investments with and am now working on an interesting project with, has a great post up on how angel investors make investment decisions. If you are raising angel money, it’s worth a read."

Please see Brad's post for a link to Mr. Cohen's piece.

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Looking for Happiness in All the Wrong Places

"Psychologists have conducted a number of research studies trying to analyze what makes people happy, and the results are startling. Most of the time, it turns out that we're looking in the wrong places.

Money, for instance, is only important until you have enough to meet your basic needs. After that, it has little effect on long-term, deep down happiness...

What elements are thought to bring happiness, and how can you integrate more of them into your life?

Cultivate Intimate Friendships...

Says [Dr. Dean] Ornish...'Spending time with the people we care about isn't what we do after the important stuff is done. It is the important stuff.'

To build more intimacy into your life, Ornish suggests that you:

* Help others.
* Communicate how you feel. Say "I feel angry..." rather than "I am angry with you..."
* Listen to others and show you've heard them.
* Get a dog...
* Find spirituality...

Go With the Flow

People are often happiest when in a state called 'flow'...the state that occurs when your body and mind are totally absorbed in a task that challenges you without overwhelming you...

Get Married...

But a ring on the finger isn't enough in and of itself. It's the quality of the relationship that counts...there are four important similarities among relationships in which the people are satisfied:

* The ability to talk openly.
* Respect. "Don't try to bend the other person to see things through your eyes," says Cole.
* A sense of humor.
* The ability to work as a team, utilizing each other's strengths and pulling in the same direction...

Increase your happiness wherever you work:

* Don't just sit back and wait for opportunities to happen, be proactive in finding out what is available.
* Build up a good morale and camaraderie among the people you work with.
* Make sure you have a good "fit" between what motivates you and what you do each day..."

Read more in this interesting article from Beliefnet.com


Protecting Intellectual Property

"Intellectual property (IP) protection is a fundamental part of our nation's founding. The U.S. Constitution, establishing the only 'right' in its text, states that 'To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their Respective Writings and Discoveries.' Even Abraham Lincoln stated our patent system adds 'the fuel of interest to the fire of genius.' This Collection [from Kauffman eVenturing] covers the range of issues around how entrepreneurs can protect their company's IP. Upcoming Collections will cover related emerging issues surrounding IP protection, including open source IP and its impact on entrepreneurship."

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Five Forces Drive Profitability

"Numerous economic studies have affirmed that different industries can sustain different levels of profitability; part of this difference is explained by industry structure.

Michael Porter provided a framework that models an industry as being influenced by five forces. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates.

Diagram of Porter's 5 Forces

Refer to this QuickMBA article for a detailed explanation of the foregoing diagram and Porter's Five Forces.

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Guide to Getting Growth Capital

"There is no shortage of funds available to small and medium-sized growth-oriented firms. So why do so many entrepreneurs have difficulty finding the money they need to help their businesses grow? The problem seems to be that many small and medium-sized businesses don't know how to go about raising money from different types of lenders. If you don't have a clear strategy for raising capital, you probably won't find any.

This Steps to Growth Capital Self-Study Guide [from Industry Canada] is designed to help you develop the plan, the materials and the confidence to go after the equity financing you need to launch your business opportunity and achieve your business goals. This guide has been prepared for potential or established owner-managed companies that want to learn about equity investment as a means to funding growth.

Most small companies are simply not "investor-ready" — investors feel these entrepreneurs don't have what it takes to even be considered for financing. They haven't analysed their financial needs, haven't demonstrated their investment potential or management capabilities, or haven't produced an effective investment proposal. Why?

* Some of the problems that entrepreneurs face stem from a misunderstanding of what risk capital is and how it differs from traditional financing.

* Entrepreneurs may not have one of the kinds of businesses that interest investors.

* Many entrepreneurs who are good candidates for risk capital still need to go through the steps required to become "investor-ready" to understand the needs of investors and demonstrate that they have real growth potential.

The Steps to Growth Capital guide will help you learn about risk capital and will prepare you and your firm to go after it..."

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SCORE Revamps Web Site

SCORE "Counselors to America's Small Business" announces a fresh, new look for the SCORE Small Business Web Site, www.score.org, designed to be more visually appealing and easier for clients and visitors to use. New How-To and Business Tools sections offer valuable guides, templates and resources to help small business owners achieve success.

Through focus groups with SCORE small business owners, SCORE found that entrepreneurs wanted more information on starting, financing, managing and growing a business. SCORE re-organized online content around each of those themes. How-To articles provide tips and advice on a variety of topics, including business plans, venture capital, customer relations and increasing sales. Business Tools links offer access to SCORE online workshops, template gallery, business quizzes, public relations toolkit and other free resources.

As part of the Web site makeover, SCORE refined navigation features and added a site map to make getting around easier. A new Ask SCORE box on the home page gives quick access to SCORE’s free and confidential online counseling. Each page now includes a ZIP code finder to find a local SCORE office. New photos added to each page support SCORE’s awareness campaign theme, Live Your Dream. SCORE Can Help.

From a press release found via this National Business Association site

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