General Scoring Criteria
NOTE: At your first meeting with EDC, we will grade your business using the following score sheet. Please come to the first meeting prepared to discuss each section, with primary emphasis on the strategic fit. Please see attached guidelines for detail on each scoring component.
Viable Product or Service (strategic fit):
- What is your business / what are you going to sell?
- Who are you going to sell it to specifically?
- Description of typical customer, where are they, and how many of them are there?
- What problem does your product or service solve?
- Why will they buy it, how compelling is the opportunity - how big is the problem?
- Why will they buy from you instead of others?
- Why is your product or service better than all others?
- What will it cost to produce?
- How will you price it?
- Can you make money at that price?
- Can you produce / provide and deliver the product at appropriate volumes and qualities?
NOTE: Having an idea is one thing, while offering a product or service that people will actually buy in sufficient quantities to allow you to make money in the process is much more difficult. Most businesses jump from idea to execution without properly researching and understanding whether they truly have a strategic fit in the market. Emotion, ego, lack of discipline, education, or just plain laziness cause the average entrepreneur to make fatal assumptions which ultimately waste time and capital, resulting in partially successful or failed businesses. Understanding your strategic fit allows you to build a viable business plan on a firm foundation.
Business Plan:
- What is your company vision and brand model?
- How much can you sell - sales forecast
- How will you make it happen - what are your strategies?
- What products will you provide?
- How will you price them - based upon competition, distribution method, margins, etc?
- How will you promote them - advertising, promotion, public relations, etc?
- How will you distribute them - direct, dealers, reps, distributors, etc?
- How will you support them after the sale?
- How will you produce the product - manufacture in-house or outsource?
- How much money can you make - have you created a minimum of three years of projected financials - income statement, balance sheets, and cash flow projections?
- How much money do you need to get started and how will it be spent?
- Your entire execution plan needs to be built around the product / service opportunity identified in your strategic fit analysis.
Talent, Proper Disciplines and Capability:
Do you have a leadership team that includes marketing, sales, finance, development, and operations disciplines? If so, do they have the necessary capabilities and experience, or did they simply assume a new title? If not, how will you obtain those talents? Building a leadership team with the proper disciplines and the necessary capabilities in proper balance creates the opportunity to maximize your overall success. Think of your business like a wheel on your car, the further it gets out of balance, the rougher the ride!
Leadership:
Who is going to lead the team? Do they have successful leadership experience? Is that experience applicable to the task at hand? Are you willing to consider bringing in an experienced leader? Not everyone can lead, and if you want to improve your chance of success, consider this position carefully.
Capital / Resources:
Have you accounted for enough money (capital) to fund your business until it can fund itself? Is it the right type of capital? Is follow-on capital available from the same investors? Having enough of the proper funding improves the execution process and likelihood of success. Note: getting optimal capitalization is a direct result of validating the proper strategic fit for your product or service, writing a viable business plan and assembling the proper talent and leadership.
