Agtips: Commercial Viability
This edition’s agtips will cover the commercial viability section of your submission. While the technology section describes the technological maturity of your product and the sustainability section explains how your idea makes optimal use of natural resources, the commercial viability section demonstrates that your proposition has the potential to become a commercially successful business in the UAE. Business plans come in many forms, but for The FoodTech Challenge, we recommend you include these 7 points:
Who are your target customers? Target customers can be segmented by age, location, background, income, and lifestyle. Defined customer segments translate to defined sales and marketing strategies, which achieve stronger commercial results. Read more here.
What is the market opportunity and growth potential? Understanding the market dynamics for your product or service, relative to your competitors, is crucial to forecast how your business will sustain its growth. Read more here.
A strong competitor analysis establishes what makes your product or service unique in order to attract the market. There are various frameworks to evaluate competitors; check out this article from Entrepeneur Middle East to learn more.
Value Proposition/Competitor Edge
The value proposition of your business drives your competitive edge. It defines the unique value that your product delivers to the customer, compared to what the market offers. A strong value proposition makes your product or service an irresistible idea to invest in.
As the saying goes, “you have to spend money to make money”. It is important that your business model takes into consideration the required fixed and variable costs to set up and maintain operations. The business model ideally forecasts when revenue will begin to recuperate the initial costs and begin generating profits (i.e., the breakeven point).
Each winning team is eligible to win up to $250,000 in prizes – how do you plan to use it? What are the key areas where you will invest in your product or service (e.g., R&D, new hires, capital expenses)? Describe how funding from The FoodTech Challenge will be used to grow your product or service over a defined period (e.g., 12-18 months). Throughout that defined period, what major milestones do you think you will reach with the funding?
How do you make money? A robust revenue model is the foundation for a sustainable business. Here are 10 common revenue models for startup companies to get you to start thinking, but there are unique business models out there as well that have proven success in the market.
There are many resources out there to help you think about how to structure your commercial viability section. We recommend you to take this 8-point test from Investopedia to determine whether your business model is viable. Once you have all the business plan components together, read this article from Forbes about the important do’s and don’ts for investor pitch decks to make sure that your business case is in the best shape possible.