Business Model Planner

Here is a tool to help you create an effective business model.

Be hard on yourself. Do not gloss over the characteristics of the criteria I have set in the table below. Design convincing arguments for each characteristic. When you have done this, it will be abundantly clear where the ‘rubber meets the road’. This tool is designed to help you, but if you want more guidance, then do not hesitate to contact the Business Owl.

Business Model Planner

Criteria
Characteristics
Value Proposition customer problem—value of your solution to customer
Resource Allocation resources needed—configuration for optimal delivery of value
Market Segment potential market segment—specific definition of opportunity
Value Chain hands-offs of value—from concept to consumption
Location real or virtual—the locus of generating ideas and revenue
Price pricing model—internal margins/external viability
Distribution Chain direct/indirect means of distribution—promotion to delivery
Revenue & Margins means of generating revenue—setting margins for profit
Market Position place in market—relation to what is, or has gone before
Differentiation distinctive nature of offer—customer perceptions
Dazzle what is beguiling about the business—like no other
Branding business/product character—customer experiences
Partners business alliances—complementing any/all of the above

You’re going to need to offer your customers more in use value than in cash value. Think about it. Of course, there will be payment, but the transaction needs to be a pleasure, not a pain. If not, your business will fail to delight you or the customer. Its long term health will also be in question.

At the same time, realize that your business startup needs to be effective as well as delighting. The process of acquiring your customers must be efficient. If it costs you too much in time or money, you will end up firefighting.

You will need to make a good gross margin on sales. Not to profit at the expense of your customers, but to allow for your own mistakes—you won’t win every time. You need to think about how new customers will become long term ones. Getting new customers is always more costly than serving old ones.

Satisfied customers will come back for more and tell their friends. Make sure your actions live up to what is spelled out in your marketing plan.