How to prepare your business model

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When you come up with a new idea , you may think that it can be easily converted into a successful business , but in fact you can’t say that until you manage to create your business model.

In this post I will try to talk about how you can create your business model. I prepared  this topic through “The business Model Canvas ” book. It is a small book but really you should read it.

A business model describes the rationale of how an organization creates , delivers and captures value.

The business model is like a blueprint for a strategy to be implemented through organizational structures, processes, and systems.

Our business model will be consisted from 9 blocks so I will try to give you short note about each block.

1- Customer Segment : it defines the type of customers that your business or product try to target.

2- Value Proposition : What is the value that your product or service  gives to customer ?

3- Channel : How would your product reach the target customer and how he would know about it ?

4- Customer Relationship : The relationship between you (Company) and the customers.

5- Revenue Streams : How would you get (not earn) the money  ? For what value are your customers willing to pay ?

Note : To calculate the earnings , simply subtract the costs from the revenue .

6- Key Resources : What is the main source of power in your business ? Does your business (ex : Hotel )  depends on owning a very fascinating location that will help you in attracting customers.

7- Key Activities : What are the activities that your company should do to make the business model work perfectly?

8- Key Partnership : Are you looking for a partner that would provide you with a something that will help you in making your business model work ?

9-  Cost Structure : It describes all costs incurred to operate the business model.

Note : When you calculate the cost structure , don’t forget the salaries of you and other team members.

– If you would know more about the each block you can check them in the book as I said before.

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This picture represents Apple iPod/iTunes Business model.

Although Apple wasn’t the first company to bring a portable media player to the market. But what enables Apple to dominate the market is that they mixed between their portable device and their Software (iTunes) in addition the perfect design of the device. So we can say that Apple entered the war with a stronger business plan therefore it win at the final.

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