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What is a Business Model

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What is a Business Model?

The Business Model Canvas (also known as Business Model Canvas) is a business structuring tool proposed by Alexander Osterwalder at 2008, as a result of his doctoral thesis. The tool is intended to describe everything that is relevant to a business in 9 areas within a framework (Canvas), according to the list below:

1 - Customer Segment: It is the division of your customers according to characteristics, needs, attributes or other similar points.
2 - Value Offer: How your company differentiates and provides something unique to the defined customer segment.
3 - Distribution Channels: Form the company get in touch with the chosen client segment. Usually involves marketing or logistics.
4 - Relationship: The company's way of interacting with the chosen customer segment.
5 - Revenue Sources: Describes the ways the company will generate revenue within the business structure.
6 - Key Features: Key assets and intellectual, physical, or human resources a business needs to function.
7 - Key Activities: It is the essential actions that must be carried out for the company to function properly.
8 - Partnerships: Companies, organizations and any other public of interest that are supportive and facilitate the operation of the company.
9 - Cost Structure: Describes the costs of the company arising from the operation of the business model in question.

Model-of-Business-Trunk-Club-by-Light-Shop-for-Consulting1

Features: The Business Model (MD), unlike the Business plan, is a very visual and suitable tool for team discussions. In addition, the MD aims to get out of the perspective of the problem that the customer has and, through prototyping, to arrive at a solution / product.

How to: To evaluate your business model, first of all you must draw it, then you must do an analysis of the strengths and weaknesses of the model and, finally, a financial projection. Let's go step by step below.

a) Drawing the Model

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To do this, simply fill out the template in the order below. This post is not intended to treat this step in depth, but if you are interested, you can access this Blog about Business Models or download this ebook with more than 75 examples of business models.

This is the Business Template Canvas fill sequence:

What is an 1 Business Model

b) Revenue Projection

After drawing and assessing key points of your model, the next step is to make a revenue projection simplified, given that, because you are still making the model, there are still a lot of uncertainties regarding the company's operation. The proposal here is, for each revenue source, to estimate sales by counting the price thought and the expected volume of sales. The image below exemplifies this:

projection model business model

c) Structure of Costs

Following the revenue forecast, you must set up the cost structure of your business model. This will include periodic costs with marketing, physical structure, personnel, among others. The table should look like this:

What is an 2 Business Model

d) Indicators of your Model

Finally, with all the previous steps properly met, you should be able to visualize some essential indicators of the proposed business model:

1) Annual Performance
2) Revenue by Type
3) Costs by Type
4) Overall Score of the Model

What is an 3 Business Model

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