Business Models

What is a business model ?? ... the official meaning is A business model describes the rationale of how an organization creates, delivers, and captures value. in other words its the foundation of the business and it serves as a guide and plan that pushes the business towards success.

The Business Model Has 4 elements. these includes:

*THE FOUNDATION ELEMENT - Customer Value Proposition (CVP)

a company can only become successful when it creates customer value.

*THE PROFIT FORMULA

showing how the company creates value for itself while delivering customer value and this has four parts:

1. Revenue model: price x volume

2. Cost structure:

a. driven by costs of key resources

b. components to consider

 i. direct costs

 ii. indirect costs

 iii. economies of scale

 3. Margin model: Contribution needed from each transaction to achieve desired profits

 4. Resource velocity: Required turnover of inventory, fixed (and other) assets {+ Efficiency in utilizing resources to support expected volume and achieve anticipated profits}

* KEY RESOURCES

Main Assets: people, technology, products, facilities, equipment, channels, brand

* KEY PROCESSES

The sequence(s) of operational and managerial steps required to deliver value. this may also include (but not limited to): training, budgeting, planning, sales, service delivery.Also includes: corporate rules, norms, metrics, etc.

all these elements work together they are interlocked and they create and deliver value they can be seen as the building blocks of any business.
Customer Value Proposition & Profit Formula: Define value for customer & company respectively
Key Resources & Key Processes: Define how the value is delivered to both.

Take a look at this

so guys get started on your business model its the first official step towards the creation of the business i hope this comes in handy and is of much help and guidance.

See You Later On Shadz Scoop ;)