EIN6325 – Business Plan Development
What is a billion dollar quality idea without the knowledge and discipline to execute? In Billion Dollar Company: An Entrepreneur’s Guide to Business Models for High Growth Companies, Robert H. Hacker gives readers an outlook on how entrepreneurs can develop a business model for big companies. Before reading this book I did not grasp this perception of big or small companies. I thought if you had a successful company making millions of dollars solidifies that you accomplished the task of being a big company. A statistic that is proven that depicts the contrast between big and small companies, which is covered in the book is, “3 in 10,000 companies have sales greater than $100 million.” This mind blowing statistic justifies the inquisition of what a big company is. Robert Hacker’s main purpose in this book is to expand the reader’s mind to thinking big, which in my opinion is not taught in academia. The way the business model is illustrated in the book is to characterize in each major categories that promotes a well-established business model. These categories are the Business Concept, The Business Model, and my favorite The Financial Model which can be delineated as the survival of the business. Having an engineering background I feel like I was trained to be focused on a framework to synthesize the best solution to the problem. Due to this mentality it is difficult to see the business concept out of the eye of the customer. In the growth stage of a business the customer is your main purpose according to the business concept methodology. This methodology is also discussed in the Stanford University of Design Thinking, which focuses the majority of a design based on the best solution to satisfy the user. This concept is where some engineers lack expertise. Identifying the customer needs is vital to your business model. I have a colleague that posed an interesting question one day walking on Miami Beach, “Where does everyone get their cigars from?” He came up with a hypothesis that he can bring the cigars to them in a sexy way. Once, this tentative value proposition is developed, accord to Hacker’s book, you have to then investigate your market. Three scenarios for starting a new business in Chapter 3 that captured my insight are, “Do Something Better, Do Something in a New Way, and Do Something New.” As a startup entrepreneur I think this is the backbone behind the business concept following the customer needs. With a well-constructed business concept you can build a competitive advantage within the industry, which can be the force behind business model.
Discipline is the training or conditions imposed for the improvement of physical powers and self-control. Hacker uses the term discipline to describe the way an entrepreneur should approach a problem when developing the business model. This is an absolute symbolic definition, because as a society where would we be with-out discipline? In comparison, what is a quality idea without a robust business model? The answer to both of these questions is there will be no growth. The business model has many key disciplines that are explained from the pricing strategies, which is an example of Wal-Mart’s approach, to headcount. The one discipline that presented purpose to the growing stage in my opinion is the revenue driver, which explains how a company will grow in revenue in sales. The acronym SANDS describes the five revenue drivers on how a company influences their customer. Going back to the example of my colleague his driver was sales peoples. His sales personal were beautiful young woman that sold cigars to men on the beach. Investing