Focus on - Business Model
A business model describes how an organization creates, delivers and captures value. In other words, it shows the major components of a business or project, how they interact to deliver good things to clients, and how it makes money in the end. A business model is not like a business plan. A business plan may be sixty pages or more, filled with assumptions about every aspect of your future business: marketing, sales, production, human resources, organization. The problem with business plans is that they’re often static and unvalidated, which means they can be completely wrong. This happens because it’s extremely hard to predict what will happen when you actually launch your business. Understanding the business model of a social enterprise can have two key benefits:
1. It can help us to understand, design, articulate and discuss the ‘nuts and bolts’ of our business concept;
2. It can help us to test and develop prototypes so that we can see if what we passionately believe about our impact and our business actually ‘stacks up’ in practice.
About this challenge
For this challenge, you’ll use the Business Model Canvas, created by Alex Osterwalder. If you want to dig deeper and understand this great tool, used by millions of entrepreneurs, I recommend that you read his book Business Model Generation. The differences between a business plan and a business model lie in purpose and substance. A business model helps us to design and articulate how a business could work, and how we can innovate inside the business.