Generate Design A new program investing in Australian graphic design enterprise, growth and innovation Business Strategy & Five Starting Blocks of Business Building But first … … Some Propositions i. Business thinking →business plan →execution. Of these three, the business plan is the least important. ii. A business that takes time out – regularly – to think about its business and plan its future is more likely to succeed than one that doesn’t. iii. A business that is not regularly reviewing its business model is probably busy dying. iv. As creative people you have an advantage over other business people when it comes to business planning because through design you tell stories and business planning is merely about telling the story of a business in words, numbers and pictures. v. A business strategy that does not align all the key components of business activity is not a strategy. vi. A business that knows, understands and focuses on its customers is more likely to succeed than one that runs around only trying to please itself. Some (more) Propositions vii. Unless a business knows its brand, success is likely to be accidental or lucky; certainly vulnerable and probably not sustainable. viii. A business that knows why customers buy its products over it competitors’ products is more likely to attract customers than one that doesn’t. ix. A client that understands the commercial value that graphic design can deliver might be a better client than one solely looking for design excellence. x. There is little point in being in a creative business (perhaps any business) if it does not deliver some personal and creative satisfaction. Balance the creative v the commercial. vii. A business that understands its numbers is more likely to be successful than one that doesn’t. viii. A creative business must get paid for its creative output as directly as possible. ix. A creative business must look for opportunities to generate and exploit IP. Why do you need to do business planning? • To direct or guide or assist or enhance your business growth • Any investor* or lender will ask for (if not at the beginning, eventually) *CPA/AGDA, banks, friends, fools & family, angel investors, venture capitalists, high net worth individuals, Series A, Series B. Stock market. • your economy needs you • it might help you achieve your personal version of success To show them the money... “… as many a senior executive has learned along the way, most ideas are in fact duds. … For that reason, the best thing an innovator can do is gather incontestable evidence of the idea’s value …” Paddy Miller and Thomas Wedell-Wedellsborg, The Case for Stealth Innovation: When it’s better to ask for forgiveness that seek permission. HBR, March 2013. Ideas are good, but execution is better… “It’s important not to overstate the benefits of ideas. Quite frankly, I know it’s kind of a romantic notion that you’re just going to have this one brilliant idea and then everything is going to be great. But the fact is that coming up with an idea is the least important part of creating something great. It has to be the right idea and have good taste, but the execution and delivery are what’s key.” Sergey Brin, Interviewed by Jemima Kiss for The Guardian (UK) newspaper, ‘Secrets of a nimble giant’, Wednesday 17th June 2009. To sell an original idea… “Don't worry about people stealing an idea. If it's original, you will have to ram it down their throats.” Howard Hathaway Aiken (8 March 1900 – 14 March 1973). Business Planning – Strategy … … the alignment of all aspects of business to drive towards an agreed goal. Strategy is … ... the process of discovering and targeting attractive markets and then crafting positions that will deliver sustained advantage. …finding ways to acquire and keep customers. …and it is not about planning. Business Planning – Your strategy in ≤ 15 words Strategy’s hardest job: “finding ways to acquire and keep customers”. Business Planning – Your strategy in ≤ 15 words Strategy’s hardest job: “finding ways to acquire and keep customers”. To improve the performance of creative industries businesses through free business consulting and grant funding. Business Planning – The Starting Blocks My five basics of business planning or business construction. Your business can start with any of them. Copyright Tony Shannon Business Planning – Strategy Arrow SERVICES CUSTOMERS MARKETS THE DEAL Copyright Tony Shannon RESOURCES Five Business Starting Blocks Products or Services If you’ve got nothing to sell, you’re probably not in business. Five Business Starting Blocks – Products/Services What can you produce that can be made once and sold/licensed/accessed many times to generate recurring revenue? Can your products generate repeat views/access? Five Business Starting Blocks Customers In the beginning and in the end, business is about one thing … customers. Five Business Starting Blocks – Customers What services or products or content can you produce that can be made once and sold/licensed/accessed many times to generate recurring revenue? Can your products generate repeat views/access? Five Business Starting Blocks Markets Where will you find those customers whose problems you can solve? Five Business Starting Blocks – Markets What services or products or content can you produce that can be made once and sold/licensed/accessed many times to generate recurring revenue? Can your products generate repeat views/access? Five Business Starting Blocks The Deal How are you going to offer, price and sell your products or services? Five Business Starting Blocks – The Deal What services or products or content can you produce that can be made once and sold/licensed/accessed many times to generate recurring revenue? Can your products generate repeat views/access? The Revenue Master Five Business Starting Blocks The Deal continued The different business models. Five Business Starting Blocks – Business Models Business Model Name Definition Type 1 Maker Create and sell product 2 Trader Buy and sell product 3 Licensor Create and exploit asset 4 Landlord Acquire and exploit asset 5 Doer Perform a service skill 6 Provider Sell someone else's service skill A Big Question: Are you trying to sell a service to someone who thinks they are buying a product? Five Business Starting Blocks Operations + Resources What do you need to make the products, create the services, sell to customers and run the business? Five Business Starting Blocks – Operations + Resources What services or products or content can you produce that can be made once and sold/licensed/accessed many times to generate recurring revenue? Can your products generate repeat views/access? Intellectual Property Exploiting IP How do you exploit IP commercially in a business traditionally based on a feefor-service model? Big Issues: Other industries – musicians, actors, writers – do it, why not graphic designers? Are you offering a licence which is really a sale in disguise? Intellectual Property Exploiting IP Find the right service or product and the right client. • • • • • • • • • Who has the problem that a delayed-payment (royalty) deal can solve? Product is the simplest form Companies that sell product on royalty basis Companies that work in a IP exploitation industry Non-core services or products (packaging) Mixed upfront fee and licence fee Capped fee or fee tranches Gross revenue GD skills & knowledge transferrable into an IP business (maybe not GD) Tony Shannon Business Adviser Enterprise Connect Creative Industries Innovation Centre [email protected] @_tonyshannon W creativeinnovation.net.au/ enterpriseconnect.gov.au P enterprise connect 13 17 91 S facebook.com/creativeinnovation / twitter.com/c_innovation