Business Model

• A description of how your business makes money.

  Business Model
• An explanation of how you deliver value to your customers at an appropriate cost.

  Business Model
• A business model is supposed to answer:

  -who your customer is

  -what value you can create/add for the customer

  -how you can do that reasonable costs
• Business Model broken in 3 parts:

  1. Everything it takes to make something.
  2. Everything it takes to sell that thing.
  3. How and what the customer pays.
• A business model where a company generates revenue by selling advertising space on their platform.

  Advertising
• A business model that

  uses links embedded in content instead of visual advertisements that are easily identifiable.

  Affiliate
• A business model that connects buyers and sellers and helps facilitate a transaction.

  Brokerage
• A business model that takes existing products/ services and add a custom element to the transaction that makes every sale unique for the given customer.

  Customization
• Also known as "concierge"

  Customization
• A business model that is frequently paired to Advertising models to generate revenue.

  Crowdsourcing
• A business model that is common in the Restaurant Industry. You are selling the recipe for starting and running a successful business to someone else.

  Franchise
• Like renting, at the end of a lease agreement, the customer needs to return the product.

  Leasing
• A business model that allow sellers to list items for sale and provide customers with easy tools for connecting to sellers.

  Marketplace
• A business model where consumers get charged a subscription fee to get access to service.

  Subscription
• A business model where customers get charged for actual usage at the end of the billing period.

  Pay As You Go
• Green Lights:

  (positive signals to develop an ideal business model)

  1. Target high value customers

  2. Offer products or services with great value

  3. Offer products or services with reasonable profit
• A description of the goods or services that a company offers and why they are desirable to customers. It is a promise of value to be delivered.

  Value Proposition
• The process of dividing customers into groups based on common characteristics so companies can market to each group effectively and appropriately.

  Customer Segmentation
• The process of dividing customers into groups based on common characteristics so companies can market to each group effectively and appropriately.

  Channels
• The ways in which your company communicates and deals with existing customers. •Follow-ups

  •Saying “Thank You”

  Customer Relationship
• The amount of money that is brought into a company through its various business activities.

  Revenue Streams
• Resources are needed to create value for your customers.

  Key Resources
• The relationships that you have with other business, governmental, or non-consumer entities that help your business model work such as suppliers, manufacturers, business partners, etc.

  Key Partners
• The costs and expenses that your company will incur while operating your business model.

  Cost Structure
• Red Lights

  (negative signals that entrepreneurs must avoid):

  1. Target high value customers
  2. Offer products or services with great value
  3. Offer products or services with reasonable profit
• “Broadcast Yourself” – Youtube

  Tagline
• Gather specific information – data – about customers and analyze it to identify patterns that can be used.

  Customer Segments
• “The milk chocolate melts in your mouth, not in your hand.” – Mars, Incorporated

  Unique Selling Proposition
• Understand what your customer values.

  Customer Relationship
• Any activities that your business is engaged in for the primary purpose of making a profit.

  Key Activities
• “Why is there nothing quite like the iPhone? Every iPhone we’ve made – and we mean every single one – was built on the same belief. That a phone should be more than a collection of features. That, above all, a phone should be absolutely simple,

  beautiful and magical to use.”

  Value Proposition
• The relationships that you have with other business, governmental, or non-consumer entities that help your business model work.

  Key Partner
• Number of Costs of Good Sold multiplied by Price.

  Revenue
• The amount of money that has to be paid to acquire a given product.

  Price