8. 8
Step 1: Analyze Factors for Each
Section
Š Business Model
Institute 2013
9. 9
Note: There are hundreds of
potential factors. These are just
a few examples.
Š Business Model
Institute 2013
10. 10
Factors
⢠How large is the market?
⢠Is the overall market growing?
⢠Is the market expected to grow
within the next 3-5 years?
⢠What are the typical margins within
your industry?
⢠Are customers in this niche overly
price sensitive?
⢠What is the general economic
health of your customers?
⢠Are there any threats of any
substitute products/services?
11. 11
Factors
⢠What makes your offering unique
and different?
⢠What value does your product
deliver?
⢠Do you have a valid âBlue Oceanâ
strategy or âRed Oceanâ strategy?
⢠Are your
products/services priced
dramatically differently
than the existing market?
⢠How powerful and
differentiated is your value
proposition?
13. 13
Comments & Scoring
⢠Great marketing niche
⢠Growing
⢠Attractive customers
⢠High tech unique offer
⢠Superior delivery system
⢠More user control
16
14
30
15. 15
Factors
⢠Does the sale of the product make
significant profits or are add-on
sales required?
⢠Do you have a limited profit margin
due to the competitive nature of the
market?
⢠Is your revenue recurring or one-
time hits?
⢠Do you have a competitive cost
advantage?
⢠How do your margins
compare to your
competitorsâ?
⢠Are any of your revenue
streams proprietary?
16. 16
Factors
⢠Is the product marketed or does it
have to be sold?
⢠Can a salesperson of ordinary skill
sell your offerings?
⢠Do you have a sales pipeline model
that can accurately predict future
sales?
⢠How does the cost of customer
acquisition compare to the lifetime
margin generated?
17. 17
Comments & Scoring
⢠Proven sales model
⢠Magnetic marketing
⢠Exceptional margins
⢠Significant upsell possibilities
⢠Better margin than competition
⢠Margin protection
1115 26
18. 18
Factors
⢠Does your product/service have
competitive advantage based on
differentiation or focus?
⢠How significant is the value and
quality of your intellectual property?
⢠Are there any existing threats from
substitute products in your market
industry? If so, how significant are
they?
⢠Do you have a low break-even
point?
⢠Do you have a meaningful cost
advantage?
⢠Are there financial barriers that
help or hurt you?
⢠Are there opportunities to grow or
modify your value chain?
⢠Will you be able to maintain or grow
your competitive advantage?
19. 19
Factors
⢠If you fail to innovate fast enough,
how severe are the consequences?
⢠How much do you need to innovate
to keep pace?
⢠How well do your competitors
innovate?
⢠In this industry, how significant is
the competitive advantage gained by
successful innovation?
⢠How much of an advantage or
disadvantage is this combination of
need for innovation and ability to
innovate?
20. 20
Factors
⢠Does the negative impact of a pitfall
kill the business?
⢠Are there any potential future
threats from changing demographics,
consumer behavior changes, and
other trends?
⢠Is your business prone to potential
government or regulatory policy
changes?
⢠Is your business overly reliant on
trends, fashion, or whims?
⢠Is your overall business vulnerable
to litigation or legal pitfalls?
⢠Is a large competitor entering your
market a possibility?
21. 21
Factors
⢠Will you be able to sell your
business for enough money so you
would never need to work again if
you choose?
⢠Is the business over dependent on
a few customers?
⢠How reliant is sales success on
ownersâ involvement?
⢠What happens if you immediately
had to stop working in the business?
⢠How many key partner, vendor, and
customer relationships are
dependent upon the owners?
22. 22
Comments & Scoring
⢠Solid current competitive advantage
⢠Advantage should continue
⢠Solid moats of protection
⢠No significant threats
⢠Strong innovation culture
⢠Consistently out-innovate
competitors
⢠Patent protection
⢠Weak competitive innovation
⢠Product somewhat faddish
⢠Consumer whims favor us now
⢠Other similar offerings have lost
favor
⢠Technological obsolescence an
issue
⢠Exit plan â go public
⢠Strong management team
⢠Excellent income
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