Question 5. How will I make money and who will pay me
We are into the final week of training with the final pitch for the remaining 15 competitors on Saturday the 10th June. (see the attached photo from the launch on the 4th May)
This week, I want to look at question 5 on the journey to opening your own business.
This step and question asks “How will I make money and who will pay me?
I had the privilege of being a facilitator for Pitch and Polish and as a result, heard many competitors pitching what they thought was a great idea/concept. It was interesting to note, however, what happened when the judges asked them how they would make money and who would pay them?
This question is on point as it causes the budding entrepreneur to grapple with very real questions that must be answered.
Who is the customer? (Growthwheel originally targeted entrepreneurs for their toolkit; but now has shifted to the business advisors/coaches and organisations who input the entrepreneurs)
Who will be paying for the product/service? (Think of the target market being children, with parents taking out the money)
How does the money get from them to me? (Think of methods like Zapper etc.)
These seem so rudimentary, but my experience at Pitch and Polish showed me that it is not always clear to the entrepreneur! It must be clear to you!
In answering this question and doing research within your chosen industry, you need to consider these further questions:-
How will I reach these customers? (I think of Kirsty’s Ice Cream, who reached her initial customers through Instagram)
What is the cost of acquiring and serving each customer? (Apple Itunes spent hundreds of millions of dollars to convince people to buy music this way)
What is the cost of training and the cost of servicing each customer?
Finally, you need to consider whether your business is easy to scale. A business is scalable if the cost of serving the next 10 customers is dramatically less than serving the first 10 customers.
Here’s to building strong businesses, led by resilient entrepreneurs.