What is a business model? Overview of definitions. Description of the business model Each business model must contain

Today, many experts and specialists talk aboutbusiness process models and talk about their effectiveness, but many novice businessmen and startups do not even understand what it is. In this article, we decided to figure out what this term is and in what cases it is used.

Introduction

The business model is a unique company strategy developed with a peculiarity of various nuances, the main goal of which is to maximize profit. The model necessarily includes various values \u200b\u200band directions that the company can offer to customers, that is, in fact, it describes the possible potential of the organization, the possibilities for creating a certain product and communicating it to the consumer in order to generate constant income.

Classic business model diagram

For example, a restaurant model offers a cozy place for a visitor to relax, where he can dine and have a good time on his own or with his relatives / friends. The online store model implies the reselling of certain products through the network and making a certain profit, while the commercial site implies the sale of advertisements or links.

So what is a business model? This is a kind of connecting link between the organization's offer, target audience and sales of the company's products. By bringing this together, we get the necessary development and work strategy aimed at obtaining maximum profit. When developing a strategy, it is necessary to understand the nuances of the company's work in order to build a detailed plan for its development. She will answer the following questions:

Who specifically influences the conduct of business processes and what exactly does he do.
What commercial idea works / will be implemented in the company.
Who exactly implements the normal course of business processes.
What activities need to be carried out to improve communication and understanding of processes between branches or divisions of the organization.
How to establish an effective system for managing human resources and training new employees.

What is the difference between a strategy and a model

Many entrepreneurs and managers often cannot answer how the strategy differs from the model, confusing these terms or considering them identical. In fact, this is not the case. The model is needed to draw up an option for quickly converting the company's supply into profit, while the strategy captures larger time intervals and considers ways not so much to increase profit as to the survival of the organization.

Attention:the model, in contrast to the strategy, does not consider where resources and financing will be attracted, it aims only to increase profits.

It is also more superficial, that is, when compiling it, it is not necessary to conduct a detailed analysis of the market, find out how much the product is in demand, whether the qualifications of the personnel are enough for its reproduction, etc.

What is called a business model

Popular types

Today there are many different models - it is almost impossible to describe them all. Therefore, we will consider the most popularkinds:

Creator or manufacturer. It's simple - you create a specific product or product and then sell it either to the end customer or to distributors (you can even sell products to one distributor by transferring exclusive rights to him).
Classic retail. The idea is simple - you buy a product from a manufacturer or wholesaler, selling it to the end customer, receiving a certain percentage or a markup for this.
Niche work. If classic retail usually offers customers a wide range of general-purpose goods, then niche work implies functioning in a narrow focus.
Personal sales. The company operates in the retail sector, offering a wide range of products to all visitors, but at the same time it has a certain circle of customers who can get pleasant discounts on popular items. To do this, customers need to pay dues to get into the “club”.
The only sale. Retail is not selling a huge assortment, but one type of product per day, but with a big discount. Therebycompany selects stale goods from a supplier and conducts hundreds / thousands of sales per day. Customers are notified of the sale of a new product in the chosen way - via e-mail, instant messengers, etc.
Integration. Quite a successful technique for increasing sales through online stores for classic distributors. Buyers purchase goods from them, but at the same time receive them through warehouses in a convenient place (or at the dealer's offices).
Franchise. A well-known way of doing business whereby a company grants rights to use its trademark and a polished workflow for the franchisee, who in return pays a percentage of the income.
Razor and blade. The classic way that was developed in the middle of the last century. It implies the sale of a certain product for less than the cost price, provided that the second product is sold with a good markup. As an example, you can consider the Gillette razor - the razor itself is inexpensive, but the cartridges are delayed by a serious amount. A second example - printers - a cartridge can cost up to 50% of the cost of a new device.
Broker. A classic example of mediation - a broker finds a buyer and seller of a certain product / service, receiving a certain percentage or a fixed reward for their actions. Brokerage is carried out according to various schemes: auction (for example, Ebay), rent (Booking), sale of virtual goods (GooglePlay), work with finances (Forex), provision of services (Pig or oDesk), etc.
Rent. The company leases real estate, vehicles or certain products, then rents them out and receives a certain income. For example, a company leases an entire office building and then leases the offices. Or he takes a plane for rent, organizing charter flights.

There are other examplesbuilding business models: subscription to certain resources or software products, affiliate programs that pay remuneration for actions taken, multilevel marketing systems, etc.

Standard Template

Let's take a look at what the traditional model looks like. The template is shown in the picture below,it allows you to understand how everything works. The key section is services and products. In fact, there are practically no unique products, so the products are actually not interesting to buyers, since there are hundreds of similar offers around them. Customers are interested not in the product itself, but in what specifically it will be interesting and useful to them. That is why the “Offer” section is so important - you need to describe what you offer and what the product gives. The main thing is to get potential customers interested in making a purchase.

Standard Business Model Diagram

Right side of the template - these are the ways of selling goods. It consists of several points, the key of which is to establish a channel for working with a client. It depends on the correctness of the channel construction how quickly the consumer purchases the goods after the company issues a certain offer. It is believed that the channel should work in five steps:

Informing the client.
Persuading a potential buyer.
Make a deal.
Delivery of goods to the buyer.
After-sales communication.

Attention:the last point implies that the employee of the company, after the transaction is completed, will clarify with the client whether he liked everything, whether he is satisfied with the quality of the goods. If necessary, the manager will help the client to arrange a return or a warranty case.

On the left in the diagram, the costs that the organization will incur to create a product and sell it are considered. It is necessary to assess them correctly in order to understand what difficulties you will have to face and how to properly overcome them. It should be understood that the left block completely affects the right one, that is, expenses affect the formation of profits.

Principles of creation

Let's consider how to correctly build your own model for a specific enterprise. To get started, study the template above and think about what you can learn from or add from it. Then take a pen and a piece of paper by answering the following 5 questions:

What exactly do you offer and why customers should be interested in your offer. That is, why the buyer should be interested and what he will get by making a purchase. In order to answer this question, you need to make a portrait of the target audience, describe the proposed product, its functions and advantages.
Who can be interested in and benefit from your product. This question involves working with a dedicated target audience. You need to understand who will make regular deals, who - one-time, who your niche can touch, what segment it will cover, etc.
Communication channels. Decide exactly how you will communicate with clients: via the Internet, by phone or messengers, with the help of personalized meetings (store), etc. Quite a lot depends on the communication channels, so you should not ignore this step.
Maintaining relationships. It is necessary not only to convey information to the prospective buyer, but also to make it permanent in order to increase the number of sales. This requires supporting the relationship in a variety of ways.
For what and how they pay. Decide which products will be especially popular, not forgetting about the 80/20 Paretto rule, think over payment methods, pricing and other financial issues.

Build multiple business models to determine the most effective

These five questions will help you shape the revenue side of your plan. Next, you need to take on the consumable part:

Consider what resources and technologies are needed to launch a product sale. Resources can be not only material - intellectual, human, etc.
What processes need to be started in order to make a profit. Processes can be production, that is, launching the creation of a product, platform (creating a website or connecting payments) and organizational, leading to the solution of various issues.
Do you need outside help to implement the project or can you do it yourself.
What will result in the launch of the scheme. Accordingly, you need to calculate how much resources you need to invest, which processes will be the most complex and expensive, which will require maximum resources and labor costs.

Is it worth the candle

In the previous chapter, we figured out how to compose the expense and income side. After that, you need to assess whether you should engage in this process, that is, find out if the idea will be profitable. To do this, subtract the amount of estimated expenses from the amount of estimated income. But, as you understand, these are rough estimates, because they do not take into account a huge number of real nuances that will arise during the implementation of the project. The question arises - then why build a model?

The answer is simple - in order to choose the most simple and profitable line of business. You need to draw up not one model, but several in different directions, assessing the prospects for each individual case. In parallel, you can exploreto understand exactly how such schemes are drawn up, what is indicated on them and how the situation is analyzed.

Moreover, it is necessary to calculate the risks for each stage of cooperation. For example, think about what problems people who have purchased your service or product may have, try to do a little work with a focus group consisting of the intended target audience, in order to understand if they like your idea, ask the audience to tell, what interested them and what did not like or did not cause emotions.Based on the collected information and analytics, try to create a trial version of the product and show it to the audience by examining their moods and wishes. Find out if you are looking at the problem the same way your clients are.

In contact with

The business model is the potential of the enterprise, its commercial partners necessary to create, promote and deliver a product to the target audience; customer relationships and investments needed to generate a sustainable income stream.

You will learn:

What is a business model and how it differs from a strategy.
What the business model consists of.
How the business model is built.
How can the effectiveness of the business model be assessed.

This term means one way or another. Distinguish between simple and complex systems. For example, the business model of a restaurant chain is to generate income by inviting customers to a comfortable place for a pleasant pastime and a delicious, delicious dinner.

The sources of profit for commercial internet sites are more varied and come in many variations. For example, some of the owners of this business provide free information or service in order to increase customer flow. Commercial sites with high traffic levels can be a great place to advertise. Thus, their owners earn money by selling sites for commercial purposes. Another category of sites generates income from online sales. These include, for example, online stores.

The financial business model is the link between:

Those WHAT offers an enterprise (company values \u200b\u200bthat are of interest to customers).
WHOis the target audience and pays for the services offered.
ASimplementation (formation, distribution and sale) of this value to customers is ensured.

This connection is formed so that the profit from the sales turnover exceeds the investments spent on the implementation of the chosen strategy.

The business model of an organization is a set of descriptions aimed at understanding the essence of the company's management process and designed to:

Working out a step-by-step plan for the development of the enterprise.
Understanding the structure of the company's business function.
Answers to a number of questions:

Who is involved in business processes, what roles do they perform?
When and how is the commercial concept implemented?
In which departments of the company are specific business process models executed?
Improving the quality of cooperation and mutual understanding between organizational structures involved in decision-making.
Implementation of a corporate information management system.
Opening opportunities and paths to certification.
Fast and effective training of new specialists, since business process diagrams are visual job descriptions.

Consumer Profile in 2020: How to Adjust Your Business Strategy to the Trends

The editors of the Commercial Director magazine analyzed the trends in consumer behavior in 2020. The algorithm is suitable for any company.

How business models differ from business strategies

The concept of an enterprise business model is often confused with strategy, replacing one term with another, or is understood as one of its components. This confusion stems from the fact that one definition is closely related to the other, but not equal to it. Their differences are as follows:

The factor of value creation and their transformation into income. The business model is intended to describe the way in which a company converts a given product or service into profit. And the strategy covers more distant prospects, creating a sustainable competitive advantage.
Business price or owner's income. Converting the value of an entrepreneurial business into a manager's profit is not the main task of the project business model. This is the direct difference between this concept and strategy. Thus, the business model does not focus on financing methods, but, nevertheless, it has a significant impact on shareholder returns.
Business qualification level. No special knowledge is required to form a company's business model. In turn, the development of a strategy involves a more complex analysis, which presupposes a certain level of awareness in the area where the enterprise is developing.

To visualize how the business model relates to strategy, consider the following formula presented by M. Levy:

V \u003d MS,where

V - value, M - business model, S - strategy.

This formula demonstrates that in order to implement the chosen strategy, the organization must determine the best business models that will serve as the basis for further development and value creation for the target audience.

What are the types of business models

1. Manufacturer.Creation of physical goods, intangible products (music, films) or services. Who will be the target audience - a customer or a distributor? The main task is the production of a demanded product and its subsequent delivery through an efficient channel. There are three types of this business model:

Direct marketing to the consumer means selling a product on a website or through company-owned stores. The main advantages of this system are exemption from intermediaries, increasing income and building relationships with buyers directly (through free support, detailed product demonstrations, etc.).
Sales to distributors and wholesalers and retailers... This business model involves the sale of products to specialized retailers who have multiple channels to reach end customers. Most of the manufacturing companies belong to this segment.
Transfer of exclusive rights to distributors.In this case, manufacturing enterprises cooperate exclusively with one or several intermediaries, creating a monopoly on a specific product in a specific region and receiving a large income. For example, this category of sellers is represented by car manufacturers, film producers, and book authors.

2. Distributor of goods and services.Intermediaries serve as the main link between the manufacturing company and consumers. Their task is to combine the products of various enterprises in order to scale sales. Distributors increase margins and reduce logistics costs. This market is highly competitive. The following varieties of this business model can be distinguished:

Retail(including ecommerce) for general use, involving a huge number of products vertically. Consumers interact exclusively with distributors across all products, which is the value proposition of such a business. For example, Amazon and Walmart online stores adhere to this model.
Niche targeting (narrow focus). General retail trade involves a wide range of products, and product specialization distributors work with a specific category of goods. Toys 'R' Us and Babyoye are examples of this business model.
Personal sales club.In this case, buyers pay a recurring membership fee, which gives them personal access to an exclusive discount system for top brands. For example, Costco, Sam's club, Gilt, Exclusively.
One product per day.This sales business model is used by Woot. Instead of selling hundreds of products, this company offers just one product a day at a substantial discount. Thus, manufacturers clean their warehouses very quickly, and the distributor sells goods in huge quantities. Users are provided with information about a particular product every day.
Integrated model.This system is used by traditional retailers wishing to increase customer flow at the expense of the Internet audience. So, consumers choose a product and pay for it on the distributor's website, and receive it in a warehouse, in a store.

Expert opinion

Successful business model when the product is sold piecemeal

Sergey Alekseenko,

head of Distribution, Russian Branch, Bauer Media Group, Moscow

The business model is still popular, which involves the sale of goods in parts. A striking example is party art, various publications that come out with a certain frequency, at a predetermined date. The principle of collecting is relevant for various goods, but is used, as a rule, as an additional, stimulating way to increase sales.

The main difference between a party work and a regular periodical is that it is characterized by a clearly planned and fixed lifespan. As a rule, this project is launched for 1-3 years, and then, as the topic of the publication is exhausted, it completes its work.

The formation of this business model largely depends on customer interest. As a rule, the first trial issue of a publication is sold for half the price of the next one (from 50 to 100 rubles). In some cases, manufacturing companies determine the cost is lower than their cost to create a given product.

These costs will pay off in the future through future sales. The tempting price of the novelty is combined with a unique element of the product's design embedded in its packaging - the most interesting in the entire collection. Thus, by involving the buyer in the game, the manufacturing company moves to the planned cost: the second copy of the edition costs several times more than the trial one.

Over time, the number of buyers will decrease, but this trend is foreseen in advance, so the company releases subsequent issues in a smaller circulation. The number of published copies of the magazine is determined by the quality of the product, its relevance, concept, cost and uniqueness. The period when millions of copies were released is long gone. Today, on average, 200 to 400 thousand copies of the first issue are published. The duration of the issue can be different - from a couple of months to several years. Consequently, circulations may also vary, but, as a rule, the full collection of magazines does not exceed 170 issues.

Patwork manufacturers face challenges in attracting and retaining their target audience. To this end, they are developing serious marketing work: they place advertisements, carry out various actions and research.

Expert opinion

What the structure of a business model looks like

Alexander Osterwalder,

1. Consumer segments.This section includes groups of people or companies that an organization sees as potential customers. The target audience is at the center of any business model. Without its own client base, no company can make a stable profit. And in order to best satisfy the needs of its consumers, the company divides them into groups depending on their desires, behavior patterns and other characteristic features. The head of the enterprise must decide which particular groups are of interest for his activities. Business model development is based on the needs of customers in each segment.

2. Value of the proposal.This section consists of a set of products or services of interest to each consumer group. Clients give preference to one or another company, focusing on the value or benefit offered to them. The enterprise, in turn, directs its activities towards solving consumer problems and satisfying their needs. Each group has its own desires, so it is important to create products or services that have a specific value and benefit for them.

3. Sales channels.This block contains information on how the company establishes communication with a potential audience, distributes, delivers, sells products or services to each group of consumers. Based on these channels, they choose methods of interaction with customers. This plays a critical role in creating a positive image of the enterprise in the perception of consumers. Distribution channels are intended for:

increasing customer awareness of the company's products and services;
assistance in assessing the benefits (value) of the organization's proposal;
enabling the audience to purchase a product or use a service;
guarantees of consumer benefits;
providing customers with after-sales service.

4. Relationship with customers.This section characterizes the features of the enterprise's relations with members of each group. An enterprise should determine what methods of interaction are most effective in dealing with these categories of consumers. Relationships can be either personal or automated. Communication with consumers performs the following functions:

attracting an additional stream of buyers;
customer retention;
increase in sales.

5. Streams of income.This section shows which cash flows are involved in the formation of the total income of the enterprise. Each firm must clearly understand for what value each category of customers pays them. Based on this, cash flows will be formed. By calculating the approximate number of consumers, you can determine the total revenue for a particular business model.

6. Key resourcesare necessary in order to create value proposition and deliver it to the client, establish contact with the target audience, implement the sales process, etc. Different types of entrepreneurship imply their own separate key resources. For example, a manufacturing company needs equipment and production facilities. Distinguish between physical, financial, intellectual or human resources. They can be rented, purchased or borrowed from partners.

7. Key processes.This section describes a number of the most important processes, functions, activities. In order to implement the business model in practice, it is necessary to create and support the activities of a certain set of key processes. These are the most important organizational activities required to create, offer, distribute value proposition and implement customer relationships, etc. As in the previous case, the key processes are determined by the type of business model.

8. Key partners.This section includes suppliers and partners. In some cases, partner companies are the backbone of the business model. Enterprises form alliances to optimize their program, reduce commercial risks, or share resources.

9. Cost structure.This section includes all costs required to implement a business model. All the blocks described above imply certain costs. These costs are driven by key resources, processes and partners. Some business models are more costly than others. The cost structure should be determined during the concept development process. Based on the resulting costs, you can calculate the expected income from a particular concept.

What a generic business model template looks like

Let's consider what parts business models are made of and how they interact with each other. The image below shows the elements of this structure and the main links.

In the center of the image there is a subsection "Products / Services". As a rule, the products themselves are not of interest to customers, since similar offers can be found in competing companies. For buyers, only the solution of their problems and satisfaction of needs on the most favorable terms for them is of value.

To understand what exactly you can interest the target audience and what are the advantages of your company, describe them in the "Offer" category. Each customer group has a specific set of products or services.

Offering value to your customers is the backbone of your business. This element is the link between the needs of the client and your products (services). "Offer" helps to create income from the sale of goods (right side of the image) and the organization of business activities for subsequent sale (left side of the diagram). Profit stream formation implies certain costs ("cost structure"). By calculating the difference between the amount of income and expenses, you can determine the financial outlook for a particular business model.

Pay attention to the right side of the diagram (profit generation), consisting of income streams from the sale of a certain product to a specific group of consumers. From this image, we can see that a profitable offer is intended for a certain category of customers due to the established mechanism of relationships with the target audience. The company addresses clients with information at a certain frequency, at specific stages of interaction development, in order to convince them of the profitability of its offer for them, which further ensures the implementation (sale) of products.

The basis of the company's contact with consumers is the channels that differ depending on the stage of the relationship with customers: from the period when the business created its offer to the moment of purchasing the product. There are five phases in total:

1) Notification.The purpose of this stage is to inform the consumer group about the available products and services of the company.

2) Conviction.The main task is to help the client in assessing the proposed benefits.

3) Deal.At this stage of interaction, the conditions necessary to carry out the process of purchasing a product or service are formed.

4) Delivery.This phase ensures that the consumer receives the goods with the declared benefit.

5) After-sales interactionpursues the goal of organizing customer service after the product is sold.

The total profit is generated through offers, channels and customer groups. Moreover, each stream can be characterized by its own rules for setting the cost (for example, the creation of fixed price lists, the amount of discounts, negotiated prices based on the purchase volume).

The business model's cash flows consist of:

one-time payments made after each transaction;
regular payment (for example, a subscription fee) for after-sales service of purchased goods.

The elements on the left side of the diagram contribute to the selection of the most effective tools (relationship mechanisms and channels) in order to get the highest total profit in the future.

The left side of the image shows the cost creation model in the process of generating a unique proposal, its subsequent distribution, sale, delivery and collection of revenue from each stream. This scheme has all the elements that create conditions for the implementation of the proposal, and implies specific costs for this.

To sell products, a business must have key resources and processes (skills) that provide:

the formation of a certain value;
creation and maintenance of communication channels (in accordance with the phase and group of a particular client).

Key processes (or activities) refer to required actions. Here, the main resources are used to implement the proposal. For example, for a trading firm, the key process is the ability to sell its products. For the service center - not only the implementation of their services, but also the provision of them at the proper level.

Key resources can be provided by business partners. An example is suppliers of products or raw materials. They can also carry out key processes.

It is important to assess all the costs required to implement the company's proposal. Of course, the cost structure is directly related to the decisions made to form the profit streams. Any adjustment in this matter causes changes in the total cost of the proposal implementation.

An entity's financial prospects are calculated based on the difference in revenue streams and total costs.

A business model is usually created and developed using a universal template, consisting of all components and sample questions, answering which you can determine the best option for implementing your proposal.

This technique contributes to the creation and objective assessment of the development path of a business idea. You form several options, conduct a comparative analysis and choose the most effective and reliable model, which will become the basis of the proposal implementation system.

How business models are built: step-by-step instructions

In order to create a business model, you need to answer nine questions in turn, entering the results in the corresponding cells of the template. You can draw up this diagram on A1 or A0 paper and place it on the wall, marking the answers with multi-colored stickers.

Step 1. Create the revenue side of the business model.

The central components of the model are value proposition and consumer groups. These elements are closely interconnected with each other, so the questions should go strictly one after another. In answering the first question, you must assume the answer to the second. Conversely, the answer to the second question confirms the first. Let's take a closer look at the elements of the business model, which are described by answers to the following questions:

1) What is the essence of your proposal? Pre-answer the questions:

What is the value of your offer to customers?
What customer problem will you solve with your products?
What needs will the client satisfy if he uses your offer?
What set of products or services are you offering to your target audience?

Offering a benefit always implies a specific value for a specific group of customers, which is the characteristic of a product that satisfies a customer's needs. These properties of goods (services) can be both quantitative (cost, service speed) and qualitative (shape, design, ease of use). Let's take a closer look at some of the characteristics that make up the benefit offer:

Novelty.There are a number of proposals that satisfy the new set of requests that did not arise earlier due to the lack of this product (service). As a rule, this concerns technological innovations. For example, as mobile phones became popular, many devices and accessories for them (covers, programs, special cords, etc.) were created.
Performance.Optimizing the production process or increasing service speed is the traditional way of generating a value proposition. This approach is actively used in the computer industry, which every year produces more and more powerful equipment for consumers.
Customization according to customer requirements.A great way to create value for a customer is to tailor a product or service to a customer's request.
"To always work."Consumers are loyal to those products that help them solve certain problems. For example, Rolls-Royce actively uses this principle: airlines buy aircraft engines from them along with a guarantee that this product will not be inoperative, which, in turn, makes it possible to concentrate all attention on the transportation of passengers without perplexing yourself a maintenance question. In return, Rolls-Royce is rewarded for every hour the engines are in operation.
Construction (design).In the field of fashion and electronic devices, this property is essential.
Name / brand / status. There is a certain category of customers who prefer to purchase goods from eminent manufacturers, which is an attribute of their belonging to a certain category of society.
Price.Offering the same product, but at a lower cost, is a standard technique for attracting a category of consumers that is sensitive to the price of a product or service. Free offers such as magazines, mobile apps, etc. are very popular.
Reduced costs.By helping to reduce customer costs, you create a value proposition for them. For example, you can reduce consumer costs when introducing a service.
Reduced acquisition risk. Usually, at the time of purchase, customers risk purchasing a product that is not what they expected. For example, in such situations, dealers offer free service for used cars throughout the year. Thus, they reduce the risks of purchasing a car with undiagnosed defects.
Availability.For example, mutual funds are material investments in stocks with a small initial capital. As a rule, an investment requires an amount of 30 thousand rubles or more. While for mutual funds it is enough to deposit only 1000 rubles, for students - 100 rubles.
Ease of management and use.An example is the touch screen of a mobile phone, which provides a comfortable environment for operating the device.

2) Which customer groups will be interested in the benefits offered? Before answering this question, please specify:

Which consumer groups are ready to purchase this product or service?
Who is the most important customer and is he in the 20% that provides 80% of the profit?

The following categories of consumers can be distinguished:

Bulk buyer.For the business model, there is no distinction between customer groups. Proposal creation, channelization, and relationship building with target audiences focus on customers with similar needs and common concerns.
Niche.This category of customers is intended for a specific part of the customer group. As in the first case, the formation of value, relationships and the distribution of channels is aimed at meeting exactly their needs and demands. This category is very common in a business based on a supplier-customer relationship.
Segment.In some business models, each group of customers is divided into certain categories, whose needs and requirements differ slightly. For example, the banking sector. They subdivide their consumers according to the amount of material invested, providing them with various offers of benefits (an increase in interest with an increase in contribution).
Mixed.Many companies offer value to two or more unrelated groups of consumers at once. For example, a newspaper with free classified ads provides information for readers, and advertisers provide publishing platforms.

3) How will you contact customers (channels)? The answer to this question contributes to the formation of a model of interaction with consumers. Pre-consider all five phases for each customer group and choose a separate way of how you will connect at each stage of the relationship.

For example, in order to sell digital products via the Internet, only three channels are used: the site - during all five phases; email - for the first, second and fifth; acceptance of payment (by electronic money, bank cards, etc.) - for the third phase.

4) How will you build and maintain customer relationships? Answer the following questions:

What types of interactions do you need to support for each benefit offering?
Which ones can you use for each customer group?

What types of customer relationships are distinguished:

Personal.They are based on the interaction of employees with customers: specialists are engaged in service in the process and after the sale. This type of relationship can be carried out in the office, using e-mail, telephone, etc.
Dedicated personal.This interaction model implies that a certain employee is assigned to each client in order to establish closer and deeper relationships, designed for a long time.
No relationship.In this case, the organization does not maintain contact with the consumer, counting on his independence in resolving the issues that have arisen.
Automated.This is a modernized version of the previous type of relationship - the client is provided with a standard reference, a website where you can find answers to common questions, etc. Thanks to modern developments, the company has the ability to form "pseudo" -personal relationships through software.
Groups, communities, forums.Their function is to provide contacts between members of the community to resolve problem situations through the exchange of information. These groups enable an organization to understand the needs and demands of its customers.
Complicity.In many businesses, customer relationship policies go beyond the traditional approach, with executives inviting customers to participate in developing additional value propositions. For example, the online bookstore Ozon encourages buyers to post their reviews of works.

5) What exactly will customers pay for (these are your sources of income)? Make a short list and include:

What value will the group's consumers buy?
How will the payment be made?
How much does each stream contribute to the total profit?

Consider the main ways to generate profit streams:

The product is money.The company transfers the right to use physical products, such as a book, electronic device, car, etc.
User fees.The cash flow comes from the provision of services. An example is the per-minute payment for mobile communications, daily payment for a hotel room, delivery of goods by mail, etc.
Subscription fee.For example, using unlimited Internet, fitness classes, etc.
Rent / lease.Transfer of rights to use physical goods for a specified period or with subsequent redemption. For example, bike rental, car rental, tool rental, etc.
Transfer of Intellectual Property Rights.For example, the privilege of translating and publishing a book.
Intermediary fees (broker fees).An example of this business model is the payment by a client of a commission to a realtor after a successful real estate transaction. Thus, intermediary services between two or more participants are paid for.
Advertising.As a rule, organizers of holiday events receive a large percentage of the sale of places for advertising content.

The main ways of creating value:

Fix price.A clear price list for each product or service. The price is determined by the quantity or quality of the benefit offered. For example, additional options when purchasing a car or smartphone. The price is directly related to the type and characteristics of the consumer group (private clients or commercial enterprises), as well as the amount of purchased products (discount is possible).
Dynamic pricing.This is the value that is formed during the negotiation process. The price is determined by the time of purchase (depending on the season and time of day), as well as supply and demand. The auction value is set during the bidding process.

Step 2. Create the expenditure part of the business model.

With the help of the following questions, it is determined which methods and resources should be involved in the implementation of a given business model, what costs will follow.

1) What knowledge and technologies (resources) are needed in order to :

create offers;
form channels;
maintain a relationship with a customer base ?;
get cash flows.

Physical.Tools, production equipment, devices, marketplaces, etc.
Intelligent.Brand, specialized knowledge and skills, patents, partnerships, copyrights, etc.
Human.These resources are key to every business model. They play an important role when the activities of the organization are related to the intensive use of knowledge or creativity - lawyers, specialist consultants, advertising agencies, designers, etc. Any business needs experienced salesmen.
Financial.Own investments, credit funds, etc.

2) What are the key processes required in order to :

create offers;
form channels;
maintain relationships with the customer base;
get cash flows.

Key processes are divided into:

Manufacturing.Those that relate to the direct creation of the proposal.
Problem solving.Those that are associated with solving issues that arise in the process of relationships with consumers in each of the five phases.
Platform.Those that relate to a business based on the automated distribution of proposals (web technology, payment terminals, etc.).

3) Do you need the help of partners? To answer this question, describe:

Who are your partners.
Who are your suppliers.
What resources are your business partners interested in?
What activities did they plan to hold.

There are three motives for creating and maintaining a business interaction model:

Optimization and economies of scale.It is not at all necessary that every company has all the resources at once. You can leverage partner funds to keep costs down.
Reducing uncertainty and risks.Business partners help to withstand the competition.
Obtaining specific resources or performing specific activities.For example, in order to manufacture products, you must first obtain an appropriate license.

4) How much will each proposal cost?

Carefully analyze all costs and answer the following questions:

Which of the given business model requires the largest investment?
What are the most expensive resources?
What processes will be involved?

Step 3. Assess the profitability of the business model.

So the model is built. Now it is important for you to assess how much income it will bring. The business model score is calculated using the following formula:

Profitability \u003d Sum of all income - the sum of all expense items.

Analysis of the business model by individual elements

When you're designing a business model, don't limit yourself to just one option. Your only decision may not be the most successful and profitable. Consider various options for implementing your business idea. Form several models in order to obtain an assessment of the effectiveness of various combinations of the development of the benefit proposal to the target audience.

By combining classic and new customer relationship techniques, develop at least five options. Evaluate the effectiveness and profitability of each of them, then select the most profitable and best business model.

Before you start creating a project, keep in mind that you are evaluating the profitability of a model based on subjective assumptions. Before moving on, make sure your predictions are sound, or you risk losing all of your invested capital.

Which components of the business model are subject to validation:

1. Test the hypothesis that potential customers have a problem,how good is your product or service. Select a few loyal potential customers and stage a “problem presentation” with them in order to assess whether your assumptions are true.

The demonstration is intended to determine the content of the problem: at what moment it occurs, with what frequency, how annoying a potential consumer is.

Indicative plan for the "problem presentation":

List a few problems that your product can solve.
Ask the client to prioritize and highlight the most important one.
Then the consumer describes how he is dealing with the problem at the moment, and what are his costs.
Briefly describe what solutions you see.
Ask how the proposed method is convenient and beneficial for the client.
He would use it if it was free.
Is the client willing to pay for this solution to the problem. It is desirable to indicate a certain amount.
Who else, in the opinion of the consumer, may be interested in this offer.

2. Create a trial version of the product or a service that you believe can solve the problem. Create a prototype that you can then demonstrate to your target audience. Your task in the presentation process is to understand whether this solution will help to cope with the client's problem.

Indicative structure of the "presentation of the solution to the problem":

Be clear about the problem.
Demonstrate to the customer how your proposed solution will solve the problem with a product demo.
Re-check if the potential consumer is willing to pay a certain amount to solve the existing problem.
Ask where exactly and how it will be more convenient for him to purchase this product.
Ask for whom else, in the client's opinion, this solution to the problem is relevant.
End your presentation with a call to action (to sign a contract or buy a product).

3. Clarifyhow much do your proposals match the opinions of customersabout this problem and methods of its solution. You can easily draw conclusions based on the number of deals made. If the level of sales is low, then adjust the description of the problem of potential customers, or you will have to look for another category of customers for your proposal.

4 ... When the presentation of the solution to the problem ends with a good deal, no changes are made to the business model description. Then we we finish testing and re-evaluate the profitability of the updated model.

When you do your experiment, make sure the channels you offer to reach potential buyers are as comfortable as possible. Make sure they are effective in terms of mass demand for your product or service.

If you have received answers to all your questions and are sure that potential customers are interested in your product, then proceed to adjust the left side of the diagram to assess the profitability of the updated business model.

TOP 6 books on building business models

1) Yves Pignet, Alexander Osterwald “Building business models. Handbook of the strategist and innovator "

In this book you will find a unique system for the analysis, formation and development of Alexander Osterwald's business model, which is used by the world's leading companies, including Google, IBM, Ericsson. The authors demonstrate an easy and understandable method of visualizing key components, which provides a logical explanation for why the organization chose this particular method of generating revenue. To master Osterwald's business model, you don't need anything but a large sheet of paper and a block of stickers. Through this simplistic approach, you will become familiar with the overall strategic picture of entrepreneurship. With the help of concise stickers, you can easily learn the main elements of a business plan and connect them into a single system.

2) Oliver Gassman, Carolyn Frankenberger, Michaela Schick “Business models. 55 best templates "

The profit of each organization is largely determined by the choice of the most effective business model. Analyzing methodologies is an excellent tool for both start-ups and those looking to reorganize their business and make it as profitable as possible. In this book, you will get acquainted with the strategy for the formation and implementation of innovative models, as well as learn about the main stages and difficulties in this matter. This work is based on 55 business building templates that are used by the most successful modern companies, and you will also learn how to apply them in practice.

3) Tim Brown Design Thinking in Business. From developing new products to designing business models "

Nowadays, most progressive companies attract designers not to “embellish” ready-made ideas, but entrust them with development from scratch. Previously, the tasks of this specialist were limited by the scope of the existing project, now he is endowed with much greater powers. Design, as a thinking process, has completely transformed, and its principles are relevant for a wide variety of areas of activity.

4) John Mullins, Randy Komisar “Finding a Business Model. How to save a startup by changing the plan in time "

Even if an entrepreneur has very carefully developed a business plan, received approval and funds from venture capitalists, this does not guarantee the success of the project. This is why it is important to have additional strategies that you can switch to in case of failure. This book will teach you how to correctly diagnose the effectiveness of your business plan and, if necessary, change course in a timely manner.

5) Chris Anderson "Long Tail"

This book is the result of numerous experiments and interactions with entrepreneurs and scientists. In it, the author presented an analysis of data related to the sales and use of services of enterprises that specialize in the long tail market, such as Netflix and eBay.

This book describes a fundamentally new business development model that is only gaining popularity.

The information is intended for those who sell their products on the Web, as well as for anyone who is not indifferent to the future prospects for the development of marketing on the Internet.

The book is written in living language, and practical ideas can be applied immediately after you read it. It is actively gaining popularity, and experts in the field of Internet marketing leave the most rave reviews.

6) Eric Schmidt, Jared Cohen "New Digital World"

This book provides a big picture of technology development. This is not a fantasy genre. The book consists of vivid examples of modern developments, the main ways of their further development and the facts of how they can be applied in practice. It is in this area that the formation of tomorrow takes place.

The future is here today, and the authors of this book are probably closest to it: Eric Schmidt (the chairman of the board of directors of Google, who served as CEO for ten years) and Jared Cohen (the founder and leader of Google Ideas).

Information about experts

Sergey Alekseenko,distribution manager of the Russian branch Bauer Media Group in Moscow. The company's assets are represented by television channels, radio stations, 112 online projects and 396 publications in 15 countries of the world. Since 2008, the company has been the sole distributor of Hachette Collections patworks. The official website is www.bauermedia.ru.

Andrey Soolyatte,general director and business partner of Finexpert.ru in Moscow. This company was founded at the end of 2004 by Andrey Soolyatte, Vladimir Repin and Alexander Khalileev. At the beginning of 2010 the organization was renamed into BPM Consulting Group LLC.

Anastasia Gushchina,general director of the representative office Finn flare in Moscow. Field of activity:production of clothing, footwear, accessories for the category of buyers above average income. Organization form: holding. Territory: Russia, Kazakhstan, Finland. 25 own brand stores located in Moscow, St. Petersburg, Astana, Helsinki. Franchise network: 245 stores. Number of staff: 400. Annual turnover: 107 million dollars (as of 2007).

At its core, a business model is a description of how a business makes money. She explains how you create value for your customers at the right price.

The term "business model" has become widespread with the advent of the personal computer and spreadsheets. These tools allow entrepreneurs to experiment, test, and at the same time to plancosts and streams of income. With the help of spreadsheets, entrepreneurs make quick changes to their business models and can immediately see how these changes can affect their business today and in the future.

The business model structure has three parts:

All it takes to do something: design, raw materials, production, labor, etc.
Everything you need to sell a product: marketing, service provision, promotion, sales.
How and what the client pays: pricing strategy, payment methods, payment terms, etc.

Obviously, a business model is simply a study of what costs and expenses you have, and how much money you can charge for a product or service.

The essence of an effective business model is to receive more money from customers than is required to develop a product.

Different business models can improve any of these three components. You may be able to minimize costs during the design and manufacturing stages. Or you have the resources for better marketing and sales techniques. Are you ready to offer an innovative payment method for your customers?

Be that as it may, keep in mind: an effective strategy does not require a new business model; it is enough to spy on the existing one on the market. For example, most restaurants operate with a standard business model, but each establishment focuses its strategy on a specific customer category.

7 questions for evaluating a business model according to Osterwalder:

1. Switching cost

How difficult is it for consumers to switch to another company's products or services?

2. Regular income

Does each sale require new efforts or does it provide some kind of guarantee for subsequent sales and income?

3. Income and costs

Do you receive income before or after the costs arise?

4. Revolutionary cost structure

Is your cost structure different and fundamentally better than your competitors?

5. Shifting work to other parties

Does your business model allow consumers and third parties to create value for your company for free?

6. Scalability

Can you grow easily without facing hurdles like infrastructure, customer support, hiring?

7. Protection from competition

Does the business model protect you well from the competition?

17 most common business models

The vast majority of companies use existing and proven business models, only improving them in order to find competitive advantages. Here is a list of business models that you can use to start a business.

1. Advertising

The advertising business model has been around for a long time and is becoming more original as the world moves from print to online. The basics of the model are built around creating content that people want to read or watch, and showing ads to their readers or viewers.

An advertising business model needs to meet the needs of two groups of customers: readers or viewers, and advertisers. Readers may or may not pay you, but advertisers certainly do. The advertising business model is sometimes combined with the crowdsourcing format, when the creation of content does not require monetary resources, since users provide it.

Examples of: The New York Times, YouTube

2. Affiliate program

The affiliate business model is related to the advertising model, but has some specific features. Most often, the affiliate model uses links (they are embedded in the content) rather than visual advertisements that are easily identifiable.

For example, if you run a book review site, you can embed affiliate links for Ozon or other online bookstores in your reviews. If a visitor follows the link to buy a book, the partner will pay you a small commission for the sale.

Examples: Alpina Publisher, Ozon, Aviasales

3. Commission

Intermediary businesses connect buyers and sellers, thereby simplifying the transaction. They charge a fee for each transaction with either the buyer or the seller, and sometimes both.

One of the most common brokerage businesses is the real estate agency, but there are many other types of services. For example, some help construction companies find buyers.

Examples: real estate agencies, PR-agencies, recruiting agencies

4. Customization

Some companies use existing products or services to complement them with elements that make each sale unique to a particular customer.

Think, for example, of special travel agents who book trips for wealthy clients. The customization applies to products such as Nike sneakers.

Examples: NIKEiD, "Custom shirt", ""

5. Crowdsourcing

If you have managed to bring together a large number of people who provide your site with content, then you are using the crowdsourcing model. This business model is most often combined with an ad format to generate income, but there are many other variations of this model. For example, you can give designers the ability to design T-shirts and pay them a percentage of sales.

Companies that try to solve complex problems often publicly disclose their problems for advice. Authors of successful solutions receive awards, and the company can use these tips to grow its business. The key to a successful crowdsourcing business is providing the “right” incentive to attract the “crowd”.

Examples of: LJ, YouTube, P&G Connect and Develop

6. Refusal of intermediaries

If you want to make a product and sell it in stores, then you have to work through intermediaries to get your product off the assembly line and on the store shelf.

Working without a middleman assumes that you bypass everyone in the supply chain and sell goods directly to consumers. This allows you to reduce costs and build direct and honest relationships with customers.

Examples: Casper, Dell

7. Crushing

Instead of selling the entire product, you can only sell a portion of that product using a crushing business model.

One of the best examples of this business model is joint property rentals where a group of people only owns part of a vacation home.

Examples of: Disney Vacation Club, NetJets

8. Franchise

Franchising is especially common in the restaurant industry, but you will also often see examples of its implementation in all areas of services - from cleaning premises to recruiting agencies.

This business model involves selling a strategy for starting and running a successful business to someone else. Often, you also sell access to the brand and support services that help the new franchise owner successfully enter the market. Essentially, you are selling access to a successful business model that you have developed yourself.

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The next section of the business plan is next:. Today we will tell you why and how you need to draw up the next part of the business plan. And even if it does not seem so obvious, to some extent repetitive, in a professional (and not only) business plan, this is a necessary part. If only because it will give a new perspective on your small business idea and prospects for its improvement.

Description of the business model

Why is there a business model section in a business plan?

An analysis of the business plan process shows the relationship between the business plan as a product of this process and the business model as the starting point of any planning process. The business model is at the heart of the business plan and can even simplify the planning process for major business lines. At least the basic calculations of costs, revenues and profitability can be seen through the business model.

The business model focuses on four pillars of the business: customers, supply, infrastructure, and financial sustainability. These elements are detailed in the business plan.

It's easier to start planning if we have a foundation. With the help of a business model, our planning process will focus our attention on the right things.

And, of course, it will be easier to convince the investor of the profitability of the investment if a working business model is presented that will make the business profitable.

What is a business model?

As a formal definition, we will use the definition from the book "Business Model Generation - Alexander Osterwalder & Yves Pigneur":

A business model describes how a business creates, acquires, and delivers value.

Description of the business model: what questions should it answer?

To facilitate the completion of this part of business planning, we will try to classify the main questions that you, as an entrepreneur, should answer:

What market segments will the business serve, or?
What value or benefit will the business offer?
How and how will this value be presented to the market? This is a simple answer to the question of how your product and / or service will get into the attention of each segment that you identified above. Note that different segments may prefer different delivery channels.
What will be the relationship with consumers? Both before and after the sale of a product or service, a business must maintain specific relationships with consumers. The answer to this question should be given here.
What will be the income? Income is the result of the process of delivering value to customers and receiving money for that value. To do this, you need to design the size of each segment and its market share. Note: here use only assumptions and your previous knowledge, and you will do a full analysis of the market later.
What do you need in order to deliver the value you offer to the market? It includes all the resources your business needs to successfully produce and distribute value to consumers. It can be people, equipment, knowledge, technology, or something else. Everything should be listed in this subsection.
What should you do to realize this value in the market? You must undertake different activities to accomplish the main task of producing and delivering value. For example, production, marketing, sales ...
Who are the key partners in the business process? You are not alone in this process. You have suppliers, investors, consultants, partners ...
What is the economic structure of a business? All items in a particular business model create or have some value. It is best to develop an economic structure in this section in order to determine the possible costs, although, of course, there will be details in the financial part of the business plan.

Rethinking the business model

You need to know: a business model, like a business plan, can change. This is the cycle that drives continuous improvement in your business. It will be difficult for a business to develop without it. Moreover, at the current pace of development in all spheres, constant changes are simply necessary, and business as well.

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