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INDEV308 Class 3 - Business Modelling for Social Entreprise
 

INDEV308 Class 3 - Business Modelling for Social Entreprise

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Theory: What models exist for social enterprises? How do these models inform the structure and operations of the social venture? What are the key issues, tensions and considerations that make these ...

Theory: What models exist for social enterprises? How do these models inform the structure and operations of the social venture? What are the key issues, tensions and considerations that make these models applicable to specific contexts?
Practice: How can business model development be applied to the development of a social enterprise?

http://www.socialentrepreneurship.ca/indev308/

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    INDEV308 Class 3 - Business Modelling for Social Entreprise INDEV308 Class 3 - Business Modelling for Social Entreprise Presentation Transcript

    • INDEV 308: Intro to Social Entrepreneurship Class 3: Business Modelling for Social Enterprise Monday, May 16, 2011Instructors:Norm Tasevski (norm@socialentrepreneurship.ca)Karim Harji (karim@socialentrepreneurship.ca) 1
    • © Norm Tasevski & Karim Harji
    • © Norm Tasevski & Karim Harji
    • © Norm Tasevski & Karim HarjiAgenda•  Centre for Social Innovation•  What did we learn – Last Week?•  What are the components of a business model for social enterprise?•  What did we learn – Today?•  Next week 4
    • © Norm Tasevski & Karim HarjiLast Week – What did we learn? 5
    • Business Modelling for SocialEnterprise… 6
    • © Norm Tasevski & Karim HarjiA Caveat… When we business model for social enterprise, we focus on the “business”, not the “social”… But don’t worry, we will come back to the “social” later… 7
    • © Norm Tasevski & Karim HarjiA Second Caveat… “Business   “Business Form/Legal   Model” Structure”   8
    • © Norm Tasevski & Karim HarjiA Third Caveat… “Business “Business   Model” Plan”   Business  Model  1st!!!   (Business  Plan  2nd)   9
    • Why business model 1st and plan 2nd? 10
    • © Norm Tasevski & Karim HarjiBecause…It is a cure for “We Need a Plan-itis” 11
    • © 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) 12
    • © 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 :) 13
    • 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 14
    • © Norm Tasevski & Karim HarjiOur Goal for Today We’ll be designing a business model for… 15
    • © 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! 16!
    • © 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 17
    • © Norm Tasevski & Karim Harji 18
    • © Norm Tasevski & Karim HarjiCustomer SegmentsWhat you need to care about is…–  Customer “Pain”–  Difference between a “customer” and a “client” 19
    • © Norm Tasevski & Karim HarjiEmpathy Mapping
    • © Norm Tasevski & Karim Harji Who are Grameen Bank’s customers?What does their Empathy map look like? 21
    • © 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 22
    • © Norm Tasevski & Karim HarjiQuick… What is the last thing you bought? 23
    • © Norm Tasevski & Karim HarjiCustomer Utility 24
    • © Norm Tasevski & Karim HarjiWhat is Grameen Bank’s value proposition? 25
    • © Norm Tasevski & Karim HarjiChannelsWhat you need to care about is…–  How the customer receives the offer/value prop–  The physical “movement” of the offer into the hands of the customer 26
    • © Norm Tasevski & Karim HarjiHow does Grameen Bank “touch” its customers? 27
    • © Norm Tasevski & Karim HarjiRelationshipsWhat you need to care about is…–  Personal and impersonal interaction with the customer–  The “movement” of information (e.g. marketing, communication) 28
    • © Norm Tasevski & Karim HarjiWhat relationships has Grameen Bank made with its customers? 29
    • © Norm Tasevski & Karim HarjiRevenue StreamsWhat you need to care about is…–  Cash!!! (specifically, how cash flows into the enterprise) – “Money In”–  Pricing models 30
    • © Norm Tasevski & Karim HarjiHow does Grameen Bank bring in cash? 31
    • Break 32
    • © Norm Tasevski & Karim HarjiKey ResourcesWhat you need to care about is…–  Assets…–  …and how these assets create value–  Includes human, physical, intellectual, and financial resources 33
    • © Norm Tasevski & Karim HarjiWhat are Grameen Bank’s key assets? 34
    • © Norm Tasevski & Karim HarjiKey ActivitiesWhat you need to care about is…–  Actions (specifically, the actions you plan to take to generate value)–  Both “direct” and “indirect” 35
    • © Norm Tasevski & Karim HarjiWhat are Grameen Bank’s key activities? 36
    • © Norm Tasevski & Karim HarjiKey PartnersWhat you need to care about is…–  People/organizations that are integral to enabling you to do business–  How you partner, and what you partner on 37
    • What makes a good partnership? 38
    • © Norm Tasevski & Karim Harji A Common Commitment Vision! to Invest in the Partnership!Same CoreValues! Discreet Missions! 39
    • © Norm Tasevski & Karim HarjiWho does Grameen Bank partner with? 40
    • © 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 $$) 41
    • © Norm Tasevski & Karim HarjiWhat does Grameen Bank’s cost structure look like (in simple terms)? 42
    • © Norm Tasevski & Karim Harji 43
    • So…howdoes yourBusinessModel forGrameenBankcompare??? 44
    • © Norm Tasevski & Karim Harji Lending and Personal collecting $$ s $$ MicroloanGovernment BOP rs Entrepreneu Branches -Branches -Brand -Capital -People Interest rates ts-Capital Cos 45
    • © Norm Tasevski & Karim HarjiTip…•  Be a Business Model “Alchemist” – You need to go through the business model process many times in order to figure out which model best fits 46
    • © Norm Tasevski & Karim Harji“Sticky Ideation”… What we know! What we Don’t Know! Bridging the Gap! ! (turning what we don’t know into what we know)! 47
    • © Norm Tasevski & Karim HarjiWhat did we learn? 48
    • © Norm Tasevski & Karim HarjiNext Week•  Deliverable: The “revenue” side of your business model (and your motivations, mission, vision and values)•  Readings 49