Just back in Calgary from an appearance as a regular panelist on BNN’s The Pitch, a weekly live venture capital pitch show airing Wednesdays at 11:30am EST, 9:30am MST. If you didn’t catch the show, you can stream the January 12 videos from the BNN website.
This week’s pitchers, Warren MacKenzie (Weigh House) and Roger Nahas (Best Body Bootcamp) represented the diversity of the Canadian entrepreneur population. Warren wants to give investors a fighting chance at good rates of return in their portfolios by offering commission-free advice and wealth management services. Roger has built an Ontario-based fitness bootcamp business that he now wants to expand across Canada. Cool.
Different business models and concepts, but I had the same two issues with both businesses. My issues were scalability and proof of concept, both topics we cover in our online small business training.
Small business scalability
The first issue – scalability – refers to the ability of the existing business to grow, and I mean really grow, from one location to many, from one geographic area to several, from hundreds of customers to thousands of customers virtually overnight (which is why investors love technology companies).
Both Weigh House and Best Body Bootcamp need people to scale their businesses – wealth management consultants and excellent personal trainers – to hit a home run. To scale a business that relies on people as a critical factor is tougher to do. Not to say it won’t happen; it’ll be just be harder for Roger and Warren to attract VC money.
Small business proof of concept
The second issue I had with both businesses was “proof of concept,” or displaying a business model that has proven its ability to make revenue and profit. We teach the difference between a business model and a business plan in our online education for entrepreneurs, so if you want to know more you’ll have to buy the course! (I’m in business too!)
At what point is a concept “proven,” you ask? The point at which the new business has a steady supply of customers, returning customers, great customer evaluations and lots of opportunity to grow. And of course, different options for growth such as franchising, market or geographic expansion, international sales, new products, and so on.
Once a business concept is proven, and the ability to “scale” the business to greater revenue is there, you’ll have no problem attracting angel or venture capital investors to help you get there. The trick is getting to the proof of concept stage. Remember, over half of small businesses don’t get to the second year – they fail before the concept proof stage. Sad.
But then, that’s why we created GoForth – to give the emerging entrepreneur 100 Essential Small Business Skills to help them through start-up and early growth stages of any business – construction and trades, real estate agents, artists, coffee shop owners, dog walkers. If you’re a small business owner, we can help you succeed.
If you’ve got a great early-stage business and want to appear on The Pitch, shoot me an email!
PS. A little backstory – at the end of the show I mentioned that I was “a little bit of an alley cat” on one of the ideas. That was a secret shout out to four of my all time favourite University of Calgary students, Allison Onyett (Ally) , Catharine McMechan (Cat), Jalene Ippolito and Heather Baker who I had the pleasure of teaching when I was still an entrepreneurship professor. Today, they are no longer former students, but are friends of mine, and I’m grateful for their love and support.