Page 26 - The Bootstrapper Bible

ChangeThis Coming up with a brilliant idea for a business is not nearly as important as finding a business model that works. Whatʼs a business model? This classic MBA phrase describes how you set up a business so you can get money out of it. Below are some sample business models. See if you can guess which company each comes from: 1 HIRE THE WORLD’S BEST ATHLETES AS SPOKESPEOPLE. Buy an enormous amount of ad- vertising. Use the advertising to get every sporting goods store to carry your products. Make your product overseas for very little money. Charge very high prices. 2 FIND LOCAL BUSINESSES THAT CARE ABOUT THEIR EMPLOYEES. Offer them a free water cooler if they allow you to refill it. Earn money by making deliveries on a regular basis. 3 CREATE THE OPERATING SYSTEM that runs every personal computer in the world. Then use the power you gain from knowing that system, which controls the computers, to create software, Web sites, online services, even travel agencies. Right. These are the business models of Nike, Poland Spring, and Microsoft. What makes these descriptions business models? They are formulas that take the assets of a company and turn them into cash. Without a business model, a company can get publicity, hire employees, and spend money—but it wonʼt make a profit. In a free society, the government doesnʼt control who gets the right to start a business. Anyone can do it—in most cases without a license, a permit, or a training course. This has one chilling implication: as soon as a business starts to make money, other people will notice, and theyʼll start a business just like it. This is called competition, and it usually keeps people from retiring at the age of 28. | iss. 6.01 | i | U | X | + | h 26/103 f