Business Model Innovation - is it only for consultants?

This sounds like something very "flashy" and as a "new-biz-buzz". However, we are all thinking business models and a lot of us are also doing business model innovations without even knowing it.

A lot of people get confused when using a term like a business model...why not just call it a strategy? Well, - there are some differences. A business strategy holds a lot of the information that a business model does....it describes where we are going with our business. The business Model however, describes how we make money.

Cost structure and revenue streams
In the end it all comes down to cost structure and revenue streams. There are no single-most important aspects in a business model...it's about how you integrate the different components to make a profitable business that is essential.

The "bridge" between a cost structure and the revenue streams is the "Value Proposition". The value proposition states what value that you are offering your clients in return for their money. It is important to articulate this value proposition so it reaches high enough without loosing foot-hold. It should be easy for anyone to see why customers would want to accept your value proposition. (see former issue around business strategy)

The cost structure can be defined as "key resources", "key activities" and "key partners" that is needed to make the business model work. They all have associated costs. The revenue streams defines how cash flow is delivered to the company and is made up by "client relations", "distribution channels" and "client segments". Here you will define how your value proposition is offered to your clients and who your clients are....and how they are going to pay for it.

In the end it is ofcourse imperative to match a reasonable cost structure with the revenue streams to become succesful. It sounds very simple...but there are tons of ways to do this.


http://www.businessmodelgeneration.com/

The above link will guide you to one of the most straightforward, yet innovative, approaches to describe the concept and how you can use it to find new ways to make money, - either for your existing business or for a completely new startup. Explained in this visual way, - anyone is able to follow it and find time to complete it. It is a book for people that sees beyond initial offerings and want to challenge the old models of doing things. An important aspect that I will urge you to notice in this book is, that they are focusing on working systematically with creativity...(see the last post on this blog). This issue is becoming more and more important and organisations are really opening up for 1. aknowledging that we are not good at this & 2. seeing the possibilities in behaving crazy :-)

I'm sure that anyone interested in business development and innovation will find this book very interesting and get lots of ideas.