A business model explains to the reader what all the
elements of your business are and how they fit together. The business model, of outlined correctly can
also make clear on a single page, what the business does, what its core cost
based might be, what its products are and how it can earn revenue from its
activity.
Business models are often not well described in business
plans. Many standard business planning
templates do not even have a section where the business model can be outlined
and clearly explained.
An image often provides the clearest overview of the
business model. A business model diagram
should include 9 key elements of business model design.
- Value Proposition – What are
you offering?
- Capabilities/Resources – What
skills and capacity do you require?
- Partnership – Who do you need
to work with?
- Activities – What will you do?
- Costs – What are your
significant costs likely to be?
- Relationship – What formal and
informal relationships are required
- Channel – What are our channels
to market?
- Revenues – What will our
customers pay for?
- Customers – Who are our
customers?
The business model explains all the key moving parts of your
enterprise, but more importantly, lays out how these parts will work together
to deliver value.
After developing hundreds of business plans for clients, we
have developed a proven business planning technique called “question led
business planning”. This technique uses
questions to draw out of the planner the key business elements and re-assembles
these into a comprehensive business plan.
This approach has been combined with document automation to provide a
new level of flexibility in business planning.
By answering core business model questions, a business plan, executive
summary or presentation can be automatically created. All structural and language issues are taken
care of for the user, leaving them free to focus on answering a series of
questions about their business.
Marcus Tarrant is a leading or management consultant, entrepreneur and thought leader. He has worked for leading consulting firms including Deloitte Consulting, leading major strategy development and business planning initiatives. Business Planning HQ was developed to bring the advantages gained by employing a consultant, without the associated cost. We have developed the “Question Led Approach” to simplify the process of creating a high quality business plan. Our clients agree with our claims that we have reduced their planning times from over 1 week, to less than 4 hours.
