Having talked to thousands of entrepreneurs over the last decade and a half, I’m still surprised by the large amount of companies that are still starting businesses without viable revenue models. In fact many entrepreneurs are starting companies without any revenue model plan whatsoever!
Granted, there are companies without revenue models that have sold for breathtaking bounties. Just this recent quarter, Draw Something sold to Zynga for $300 million and Instagram sold to Facebook for a whopping $1 billion.
Many of these businesses started out with brick and mortar locations and have since closed their physical presences as a result of higher revenues and profit margins from their online sales. Unfortunately, many other businesses started to execute our mutually created game plan and then got busy and put it on the side burner.
What’s the result? Their ability to grow their business, stay ahead of their competitors and truly reap the rewards of their competitive advantages has not yet been realized. Ironically, many of these companies should be sitting in a far better situation today than they are, but, they continue to struggle because they’ve got caught up in the day-to-day operation of their business and put aside the most important activity that’s vital to any company’s long-term success – following a game plan. We’ve all heard the old adage, when you fail to plan, you plan to fail.