Why NOT to build a Business Model based on a Kevin Costner Film
…and how to finish Year One of trading with £50K. Kind of.
In this post I’ll explain how I did the misguided mathematics which ultimately swung my decision to launch a business. I will then explain the glaringly obvious (in hindsight) blunder in an otherwise excellent plan.
If you’ve read the previous posts you’ll know by now that I was, and still am passionate about building a platform to promote businesses with values and ethics ahead of all those with a poor approach to business and customer services. It was, and still is my belief that if you can’t do business with integrity, you shouldn’t be doing it at all. Such idealism is all very well, but just because you have a worthy campaign, doesn’t mean it stacks up as a business. This is where the maths come in.
I started at the bottom line with a figure. What amount of income per year would make this worthwhile to me. What is the MINIMUM figure that I would risk jacking in a well paid, secure job to gamble for. For me this was £50K. Remember that this is the floor figure, not the ceiling. Remember also that this doesn’t take into account the (anticipated) lifestyle improvements of working for myself. I could start and finish whenever I want. With an online business I could work from anywhere in the world. So if I got this thing off the ground I could go surfing and fishing until 2pm and make up the time when I felt like it. And I could do the same but in Tahiti, or Mexico? Sold.
Now by this time I had a fairly well defined project brief for a web development team. I felt that if this came together as planned, the result would be a website offering a really unique product, attached to some very worthwhile values. That’s worth £50 to a business right? So I only need 1000 customers (out of 6million UK businesses) to make my target figure. That’s 0.02%. I was pretty sure I could do that. The fact that the website is now FREE is an indication that my stance on this has changed somewhat.
The strapline of the 1989 epic, ‘Field of Dreams’ starring Kevin Costner was ‘If you build it, they will come’. Inspiring isn’t it? ‘That sounds good’ I thought, ‘It must therefore apply to everyday life and business’. There is however one MAJOR omission from this statement. It should read: ‘If you build it, they will come, unless they don’t know it’s there’. Less catchy, but rather more accurate.
And so over a period of a few months I realised two things. Firstly, building a website is not even 10% of running an online business. The 90% challenge now is to get people to use it. It’s general consensus that it’s a good idea, and the market needs something like Cuckoo Vine – something which heralds good businesses over bad ones much like Tripadvisor has done for hotels.
As people we undoubtedly have a herd mentality, and for very good reason. ‘If it’s good enough for them, it’s good enough for me’. But what Cuckoo Vine needs now is pioneers. Like Carsal, Eve Worral and North Norfolk Barge Co. Businesses who can step up and say, ‘Hang on, I’VE got those values and I want the whole world to know’. If these businesses get on board one by one, for free, then eventually the fiscal wheels might grind into motion. Until then I’ll keep giving it the resolve and determination that every great business idea deserves. Maybe then in 18-24 months that £50K figure will seem more likely, but for now I will leave you with one rule of thumb.
If you want to finish Year One with £50K in your pocket, make sure you start with £100K…
Next Time – How not to go bust (from someone who should have done by now)