The realities of startup and a kiosk-based business plan

Not too long ago, an entrepreneur told me about a great new kiosk business model, and it sounded great, however, having an innovative idea and a good business plan are very different from making it happen. Well, then let’s talk, because then the businessman asked; Where is the best place to get start-up capital and financing for such a new business?

He also suggested that he wouldn’t need as much, maybe enough to have a few machines to get him up and running and prove the concept. Previously, he had also indicated that the market for such a kiosk business is huge and is worth billions in revenue per year. In fact, in construction, it could be more like tens of billions. Well, what do you say, Mr. Startup Guru? he asked.

Well this is what I have to say;

Yeah, that’s what all entrepreneurs say isn’t it? We sit in a billion dollar industry and we don’t need much to get started. But actually, yes you do, and don’t count the pre-hatched chicks, my friend.

Also, you would actually need to implement this very quickly, so wouldn’t you need a minimum of 5 owned units to make money on a regional chain, plus 20 demo units and a Marketing Blitz? equipment to ram this into the market? Also, you would need to have a team of 2-3 greats, take no prisoners, 17 hours a day, need for speed, entrepreneurial types. Then various hi-tech wizards and friends in the right places to make sure these kiosks stay in sync with all of your other components.

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

1. So let’s say these devices cost between $25,000 and $25,000 to make the graphic kiosk, and you need 25 = $625,000

2. Plus your sales team = $140,000 a year + $300,000 in commissions

3. Office computers ($50K) ($40K), home office setups, etc. = $130K (even at the mega cheap $50K)

4. Executives for a year, as long as they’re not lazy jerks who want a good salary and look good, I mean startup types with skin in the game. $200,000

$625

$340

$200

$130

————

1,265,000

$1.265M

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

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

Not many people can do that, if you are one of them you would have to prove it or have a track record – money becomes very easy to come by. Now if you move slowly or toss this around like a turtle, then someone will take your idea and execute it, finish it, and do it, before you even walk out the door. In fact, I bet someone somewhere already started, the only difference now is the jockey, not the horse, right?

So Mr. Entrepreneur, how much do you really need to do this, not just to have a nice science project? Seriously, this is where the rubber meets the road, and BS walks, right? Oh, and where’s your business plan. Please consider all this and think about it; seriously, really think about it.