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Worksheet: Define Your Business Model

I use the following worksheet for initial conversations with clients, especially startups. If the company is at a very early stage, then defining the business model can take a few iterations. If the business is more defined then the output of the worksheet is the beginning of a serious conversation. If you only have a general idea of what your business is going to be, then you will benefit from completing this worksheet.

General Business Model Worksheet

At this point our goal is to create a back of the envelope description, an outline for a five minute discssion where we answer the question: how does your business idea make money?

It’s not meant to be a pitch, you’re not selling anything. You’re trying to communicate (to your business partners, to a consultant, or even to yourself) what you do and why it is valuable, perhaps even sustainably valuable.

If you can illustrate some of it – do it.

Okay let’s start.

Define the product

Describe your product in two sentences. Something along the lines of:

my product is a ______ (software/gadget/piece of clothing/service/etc.) that takes ____ (what’s your input?) and generates ____ (and your output?).

What is the value proposition of your business?

  1. Customer – Who’s your customer? (focus on the ideal type, the ideal customer)
  2. Customer Problem – What customer problem are you solving? (or define it in terms of what customer needs are relevant?)
  3. Proposed Solution – How does your product/service solve the problem?(or how are you satisfying customer needs?)
  4. Added Value – What value is created to the customer because the product/service exists?

Do you have a competitive advantage? Is it sustainable?

  1. Competitive Advantage – What are the advantages of your product/service over existing solutions?
  2. Is it sustainable? Is it inimitable to a level that will maintain profitability over time? How so?

Profitability ($$$)

Okay, you create value. But how do you capture value for profit?

  1. How do you collect payment?
  2. What are the distribution channels?
  3. How do you compensate suppliers?
 
If you need help getting started contact me today

Image for this post on homepage slider “Choices” by Akuppa John Wigham. Used under creative commons license.

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