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