ENTR4800 Class 3 - Business Modelling for Social Enterprise

ENTR 4800: Social Entrepreneurship Class 3: Business Modelling for Social Enterprise Monday, September 26, 2011Instructors:Norm Tasevski (norm@socialentrepreneurship.ca)Karim Harji (karim@socialentrepreneurship.ca) 1

© Norm Tasevski & Karim HarjiAgenda•  Centre for Social Innovation•  What are the components of a business model for social enterprise?•  Guest Speaker – Bill Young•  What did we learn – Today?•  Next week 4

Business Modelling for SocialEnterprise… 5

Why business model 1st and plan 2nd? 9

© Norm Tasevski & Karim HarjiAnd…It is a Quick way to assess Profitability/Sustainability –  Why spend months building a plan if you don’t have a real sense of profitability/sustainability? –  If your model doesn’t make money, even with the most ideal conditions… …STOP! (…and rethink your business model) 11

© Norm Tasevski & Karim HarjiOne More…It breaks down highly complex business ideas intoeasily digestible (and visual) chunks –  Gets to the heart of what you need to know to: Make a Go No- Go Decision Set Strategy Make Potential Investors/funders (and business partners) Happy :) 12

Business Plans Business ModelsAre big and complex Are small and visual (often 50-100+ pages) (1 page with about 10 supporting pages)Cover many topics Focus on a few topics(business description, ﬁnancials,marketing strategy, HR strategy, (Will you make $$? How do theOperations Strategy management team, pieces ﬁt together?)etc, etc, etc)Take weeks/months to Take a few days (possiblycreate hours) to create Are necessary for Feed the business plan!! investors, funders, business partners, etc 13

© Norm Tasevski & Karim Harji user networks! franchising! freemium! ! web ads! etc…etc…etc…! licensing! retail! micro-finance!subscription! loyalty! open-source! nonprofit (donation)! solution shops! 15!

© Norm Tasevski & Karim HarjiSome Definitions•  “A business model describes the rationale of how an organization creates, delivers and captures value – economic, social, or other forms of value” Wikipedia•  “A description of the means and methods a firm employs to earn the revenue projected in its plans. It views the business as a system and answers the question, “How are we going to make money to survive and grow?” BusinessDictionary.com•  “A business model describes the specific way the business expects to make money. While a business plan is on paper (lots of paper!) a business model should be small enough to stay in the heads of the owner and staff. If a business model is on paper, it should be one page, and it would be more clearly shown as a diagram than as words.” AudienceDialogue.net 16

© Norm Tasevski & Karim HarjiValue Proposition (the “Offer”)What you need to care about is…–  The “value” you are creating for customers (in terms of products/services), and the “pain” you are alleviating–  An exchange of value 21

What makes a good partnership? 36

© Norm Tasevski & Karim HarjiCost StructureWhat you need to care about is…–  Fixed costs, variable costs, economies of scale…“money out”–  At this stage, focus on your cost assumptions! (don’t worry about actual $$) 39

So…whatdoes acompletedbiz modellooklike??? 42

Break 45

ENTR4800 Class 3 - Business Modelling for Social Enterprise

by Social Entrepreneurship on Sep 25, 2011

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ENTR4800 Class 3 - Business Modelling for Social Enterprise Presentation Transcript