Entrepreneur Diary

 

Great Idea, Now Show Me the Money

Every entrepreneur thinks he's got the perfect idea. But can that idea generate sustainable revenue?

 

By Michael Jones

 

How does your company make money?

 

Your answer to that question is called your business model, and if you don't have a ready response, you should drop the title of entrepreneur immediately and start going by "idea man."

 

Repeat after me: Entrepreneurs create companies, not just ideas. In other words, before you set out to revolutionize the world with your stellar new business, make sure you've figured out how it'll generate sustainable revenue.

 

There are two important things to remember when developing your business model:

 

1. Think dynamically. You'll never have a complete understanding of your market in the early startup stages. But, although your market assumptions may be wrong, it's OK as long as your principal focus is flexible enough for you to adapt on the fly.

 

2. Stay close to your customers. Talk to the people who give you their money. They give you their money to solve their problems and the more you know about solving their problems, the more money you'll make. We've done our best at FundingUniverse to both think dynamically and listen closely to our customers, and it's served us well. Over the years, our business model has evolved several times, but it's always revolved around the original focus: connecting entrepreneurs to business capital. As we've listened to our customers, we've gone through many iterations of paid memberships, consulting, events and other revenue channels, each one bringing us closer to the ideal setup.

 

For example, FundingUniverse has always done well at helping entrepreneurs raise capital from angel investors. We have strong relationships with hundreds of angel investors and can take credit for many recent investments. This makes us happy and our clients happy, but a large portion of our prospective market isn't really a fit for these types of equity investments, and that's led us to expand our business model.

 

We started drilling deeply into other business finance wells a while ago to more thoroughly address the needs of our market. After a lot of research and testing, we've come out with a new program that suits many previously unserviceable customers.

 

The new program is called our Business Lines of Credit (BLOCs) Program. The goal of the program is to help clients secure more than $100,000 of business credit in as little as six to 12 months. We have a VIP relationship with Dun and Bradstreet, the oldest and largest credit bureau in the world, and have developed a step-by-step process with them to accomplish that goal. The response has been excellent.

 

We're thinking dynamically here at FundingUniverse, and staying as close to our customers as we can. Integrate these principles into your business model and I promise many years of success for your company as well.

 

Michael Jones is product manager at FundingUniverse, the one-stop shop for all things small business finance. He can be reached at mjones@fundinguniverse.com.

 

Launch - Spring 2009

 

 

For the full "digital magazine" version of Spring 2009, visit: www.nxtbook.com/nxtbooks/growutah/launch_2009spring/