ENTR4800 Class 3 - Business Modelling for Social Enterprise
-
Upload
social-entrepreneurship -
Category
Business
-
view
1.192 -
download
0
Transcript of ENTR4800 Class 3 - Business Modelling for Social Enterprise
ENTR 4800: Social Entrepreneurship
Class 3: Business Modelling for Social Enterprise
Monday, September 26, 2011
1
Instructors: Norm Tasevski ([email protected]) Karim Harji ([email protected])
© Norm Tasevski & Karim Harji
© Norm Tasevski & Karim Harji
© Norm Tasevski & Karim Harji
Agenda
• Centre for Social Innovation • What are the components of a business model for
social enterprise? • Guest Speaker – Bill Young • What did we learn – Today? • Next week
4
Business Modelling for Social Enterprise…
5
© Norm Tasevski & Karim Harji
A Caveat…
6
When we business model for social enterprise, we focus on the “business”, not the “social”…
But don’t worry, we will come back to the “social” later…
© Norm Tasevski & Karim Harji
7
A Second Caveat…
“Business Model”
“Business Form/Legal Structure”
© Norm Tasevski & Karim Harji
8
A Third Caveat…
“Business Model”
“Business Plan”
Business Model 1st!!! (Business Plan 2nd)
Why business model 1st and plan 2nd?
9
© Norm Tasevski & Karim Harji
10
Because…
It is a cure for “We Need a Plan-itis”
© Norm Tasevski & Karim Harji
11
And…
It is a Quick way to assess Profitability/Sustainability – Why spend months building a plan if you don’t have a real
sense of profitability/sustainability? – If your model doesn’t make money, even with the most
ideal conditions…
…STOP! (…and rethink your business model)
© Norm Tasevski & Karim Harji
12
One More…
It breaks down highly complex business ideas into easily digestible (and visual) chunks
– Gets to the heart of what you need to know to:
Set Strategy
Make a Go No-Go Decision
Make Potential Investors/funders (and business partners) Happy :)
13
Are small and visual (1 page with about 10 supporting pages)
Are big and complex (often 50-100+ pages)
Cover many topics (business description, financials, marketing strategy, HR strategy, Operations Strategy management team, etc, etc, etc)
Business Models
Focus on a few topics (Will you make $$? How do the pieces fit together?)
Take weeks/months to create
Take a few days (possibly hours) to create
Are necessary for investors, funders, business partners, etc
Feed the business plan!!
Business Plans
© Norm Tasevski & Karim Harji
Our Goal for Today
14
We’ll be building business models for YOUR business idea…
© Norm Tasevski & Karim Harji
freemium!
15!
user networks!franchising!
web ads!
licensing!micro-finance!retail!
subscription!
nonprofit (donation)!
open-source!loyalty!
solution shops!
!
etc…etc…etc…!
© Norm Tasevski & Karim Harji
Some Definitions
• “A business model describes the rationale of how an organization creates, delivers and captures value – economic, social, or other forms of value”
Wikipedia
• “A description of the means and methods a firm employs to earn the revenue projected in its plans. It views the business as a system and answers the question, “How are we going to make money to survive and grow?”
BusinessDictionary.com
• “A business model describes the specific way the business expects to make money. While a business plan is on paper (lots of paper!) a business model should be small enough to stay in the heads of the owner and staff. If a business model is on paper, it should be one page, and it would be more clearly shown as a diagram than as words.”
AudienceDialogue.net 16
© Norm Tasevski & Karim Harji
17
© Norm Tasevski & Karim Harji
18
Customer Segments
What you need to care about is… – Customer “Pain” – Difference between a “customer” and a “client”
© Norm Tasevski & Karim Harji
Empathy Mapping
© Norm Tasevski & Karim Harji
20
Who are your customers?
What does their Empathy map look like?
© Norm Tasevski & Karim Harji
21
Value Proposition (the “Offer”)
What you need to care about is… – The “value” you are creating for customers (in terms
of products/services), and the “pain” you are alleviating
– An exchange of value
© Norm Tasevski & Karim Harji
Quick…
22
What is the last thing you bought?
© Norm Tasevski & Karim Harji
23
Customer Utility
© Norm Tasevski & Karim Harji
24
What is your value proposition?
© Norm Tasevski & Karim Harji
25
Channels
What you need to care about is… – How the customer receives the offer/value prop – The physical “movement” of the offer into the hands
of the customer
© Norm Tasevski & Karim Harji
26
How do you “touch” your customers?
© Norm Tasevski & Karim Harji
27
Relationships
What you need to care about is… – Personal and impersonal interaction with the
customer – The “movement” of information (e.g. marketing,
communication)
© Norm Tasevski & Karim Harji
28
What relationships will you make with your customers?
© Norm Tasevski & Karim Harji
29
Revenue Streams
What you need to care about is… – Cash!!! (specifically, how cash flows into the
enterprise) – “Money In” – Pricing models
© Norm Tasevski & Karim Harji
30
How do you plan to bring in cash?
© Norm Tasevski & Karim Harji
31
Key Resources
What you need to care about is… – Assets… – …and how these assets create value – Includes human, physical, intellectual, and financial
resources
© Norm Tasevski & Karim Harji
32
What are your key assets?
© Norm Tasevski & Karim Harji
33
Key Activities
What you need to care about is… – Actions (specifically, the actions you plan to take to
generate value) – Both “direct” and “indirect”
© Norm Tasevski & Karim Harji
34
What are your key activities?
© Norm Tasevski & Karim Harji
35
Key Partners
What you need to care about is… – People/organizations that are integral to enabling
you to do business – How you partner, and what you partner on
What makes a good partnership?
36
© Norm Tasevski & Karim Harji
37
Common Vision!
Discreet Missions!
Same Core Values!
A Commitment to Invest in
the Partnership!
© Norm Tasevski & Karim Harji
38
Who do you need to partner with?
© Norm Tasevski & Karim Harji
39
Cost Structure
What you need to care about is… – Fixed costs, variable costs, economies of
scale…“money out” – At this stage, focus on your cost assumptions! (don’t
worry about actual $$)
© Norm Tasevski & Karim Harji
40
What does your cost structure look like (in simple terms)?
© Norm Tasevski & Karim Harji
41
42
So…what does a completed biz model look like???
© Norm Tasevski & Karim Harji
43
$$ Microloans
Branches
Personal
BOP Entrepreneurs
-Branches -Brand -Capital
Lending and
collecting $$
Government
-People -Capital Costs
Interest rates
© Norm Tasevski & Karim Harji
Tip…
• Be a Business Model “Alchemist” – You need to go through the business model process many times in order to figure out which model best fits
44
Break
45
© Norm Tasevski & Karim Harji
Bill Young, Social Capital Partners
46
© Norm Tasevski & Karim Harji
47
“Sticky Ideation”…
What we Don’t Know!
What we know!
Bridging the Gap!!(turning what we don’t know into what we know)!
© Norm Tasevski & Karim Harji
What did we learn?
48
© Norm Tasevski & Karim Harji
Next Class
• Deliverables: – The “revenue” side of your business model (and your
motivations, mission, vision and values)
• Readings
49