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The Realities of the Startup and a Kiosk Based Business Plan

January 17, 2012 | Comments: 0 | Views: 146

Not long ago, an entrepreneur told me of a great new kiosk business model, and it sounded fabulous, however having and innovative idea, and a nice business plan are much different than actually making it happen. Okay so, let's talk, because the entrepreneur then asked; where is the best place to get the startup capital and funding for such a new business of this type?

He also suggested that he would not need all that much, perhaps enough to get just a few machines going to get it started and prove the concept. Previously, he'd also indicated that the market for such a kiosk business is vast and worth billions in revenue per year. Indeed, at build out, it could be more like 10s of billions. Well, what say you Mr. Start-up Guru, he asked?

Well, here is what I have to say;

Yes, that's what all us entrepreneurs say isn't? We sit on a billion dollar industry and we don't need much to start. But in reality, yes, you do, and don't count pre-hatched chickens my friend.

Further, actually, you'd need to roll this out something like this awfully fast, so, wouldn't you need a minimum of 5 units of your own making money in a regional chain, plus 20-demo units, and a Blitz Marketing team to ram this into the market? Additionally, you'd need to have a team of 2-3 kick-ass, take no prisoners, 17-hour a day, need for speed, entrepreneurial types. Then a several high-tech wizards, and friends in the right places to make sure these kiosks stay synced up with all their other components.

Okay so, let's put this into perspective and a reality check:

1. So, let's say these devices cost $25,000 to $25,000 to make the kiosk with graphics, and you need 25 = $625,000 2. Plus, your sales team = $140,000 year + $300K in commissions 3. Office ($50K) computers ($40K), Home-office set ups etc. = $130K (even on the mega cheap $50K) 4. Executives for one year, provided they are not lazy schmucks wanting a cool salary and to look good, I mean kick-ass start-up types with skin in the game. $200,000

$625 $340 $200 $130 ------------ 1,265,000

$1.265 M

Now any smart entrepreneur will tell you, that you also need to triple the time to get it going and double the start-up funds, even if the business starts making decent money. So, your 1.265 million dollars is now $2.53 million, and your project instead of 12-18 months is now into 2 to 4 years, before it pays back the money it started with and a decent ROI, or is even viably in the running for an IPO or sale.

Now then if you had a couple of machines and a nice business plan then there are people and corporations, maybe even your initial corporate partners parked on lots of cash, ready to invest, but you'd need to have a machine in place, and a solid plan. And then you'd have to roll the thing out, as if the Mayans were right, and rocket it into the market place, and accelerate, growing a light speed.

Not many people can do that, if you are one of them, you'd have to prove it, or have a track record - the money then becomes very easy to get. Now then, if you move to slow or roll this out like a tortoise, then someone will take your idea run with it, be done with it and do so, before you get out of the gate. In fact, I bet someone somewhere has already started, the only difference now is the jockey, not the horse, right?

So, Mr. Entrepreneur, how much do you really need to get this done, not just to have a pretty science project? Serious, this is where the rubber meets the road, and BS walks right? Oh, and where is your business plan. Please consider all this and think on it - seriously, really think on it.

Lance Winslow has launched a new provocative series of eBooks on Business. Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank;

Source: EzineArticles
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