The Nitty Gritty: Creating the Business Model

How can your idea for a product or service can be developed and better adapted? Who are the customers? How can your offer create added value? What are the costs?

Three types of Business Models:

  • Social added value in manufacturing: Goods are produced sustainably, ecologically or fairly, or that they include disadvantaged people, for example persons with disabilities
  • Social added value for the customer: Creating/offering a product or service to a specific target group, which should improve the life situation of the group concerned. For example, solar lamps for people without adequate power supply in developing regions
  • Social added value on offer: The product or service itself such as social innovations that are developed to make everyday life easier for certain groups, e.g. auxiliary equipment for seniors

 

These three types of business models help classifying idea s and concepts. Leading to the next step – designing a Business Plan.

The Business Plan details how the business model works:

 

  • creating an overview and shows how an identified idea faces the challenges ahead
  • including a list of competitors and possible supporters
  • high level statement of finances, revenue and expected costs
  • an outlook on market success, including risk analysis

 

Business Model Canvas for Startups and Social Enterprises

The Business Model Canvas (BMC)*has proven to be efficient and useful. The BMC considers the “key partners” and their expectations, as well as the circle of customers and how the market model can be communicated and tested.

* Developed by Alexander Osterwalder, published in “Business Model Generation