Business Processes: Your Business Model Formula

07/28/2016 05:24 to watch
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The engine of your business is your business model. In your business model you develop your strategies and tactics for making money as a business. Learn how to convert those strategies and tactics into financials.

Questions for You

What are the elements of our business model:

  • What do we sell?
  • What are the compelling benefits for our target customers?
  • What is our competitive advantage?
  • Pricing strategy?  Costs?  Revenues?
  • Sales strategy and distribution channels?
  • Service and support strategies?

Can I quantify our business model in financial terms?

Questions for Your Team

How confident are we that each element of the business model is right?

What should we be testing to validate our business model?

What alternatives should we consider?

How can we improve the economics of our business model?

Which elements of the model give us the most leverage to improve our business?

Tools and Exercises

The Art of Enchanting Investors (PDF)

Fill in each part of your Business Model Formula:

  • We will become profitable in the [Nth] quarter of [20__]
  • By selling [x] systems/licenses/subscriptions to [y] customers
  • Through [channels/partners/direct sales]
  • At $[price] per system/customer/unit/subscription
  • With a cost of $[x] per customer acquired
  • At that point, our revenue run rate will be $[revenues] on an annualized basis.

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