A reference portal for students, mentors, and ATL in-charges. Data has been filtered & names have been changed to protect the privacy of individuals.
CREATE A BUSINESS MODEL
At its core, a business model is a plan that describes how your business makes money, delivers value and benefits to customers, and at what cost.
To elaborate, the business model talks about the way your business will make a profit from selling your products and/or services. It identifies the products or services you plan to sell, target customers and benefits to them, and expenses incurred in building, marketing, selling, and delivering your product or service to its users. It also identifies key partners with whom you will work to deliver value and benefits to your customers.
In the context of a product, the business model can be broken into three parts:
Building a product: design, raw materials, manufacturing, labor, etc.
Selling a product: marketing, distribution, delivering, and processing a sale.
Pricing & Payment: pricing strategy, payment methods, payment timing, etc.
CREATE A BUSINESS MODEL
Who needs to have a business model?
Any individual or organization that is planning to offer products, services, or solutions to customers in the market needs to have a business model. Without a business model, you will not have clarity on how you can offer your product to the market, and consequently, you may make mistakes, spend a lot of time, money and efforts, and even fail to generate any profits.
Why develop a business model?
The business model helps an entrepreneur create different models in which they can build, market, sell, and deliver their product or service to their customers while structuring their costs suitably to generate desired revenue or profits. Since it is a "model", an entrepreneur can compute, experiment and validate how their model works, and if necessary, refine the model before going to the market. By doing so, the entrepreneur can not only minimize risks, but also achieve his/her business goals better.
What are the components of the business model?
A business model consists of the following 9 components:
Business Name The name of your Tinkerpreneur business
Products & Services products or services you are offering to your customers (core and supporting ones)
Value Proposition value and benefits your products/services provide your customer
Customer Segments who are your customers and how you categorize them (by type & geography)
Customer Engagement how you engage with your customer on an ongoing basis (online / offline)
Sales Channel how you sell your product to your customers (online / traditional store)
Pricing Strategy how you price your product for different types of customers & geographies
Expenses costs you incur for running your Tinkerpreneur business
Revenue Model different ways in which you make money on your product
What is a revenue model?
Revenue is the total income generated by the sale of products or services by a business in a given period of time, typically in a month, a quarter, or a year. A Revenue Model describes how a business generates revenue from the value it has generated for its customers (i.e., through the sale of product & services). A business that uses Advertising as a means of generating revenue is said to use an advertising revenue model. For e.g., Google, Facebook. A business that rents out its products or services to customers and charges a rental fee is said to use the Rental revenue model. For e.g., Ola and Uber Cabs. A business that charges a monthly fee to use its products or services is said to use a Subscription-based Revenue model. For e.g., Netflix and Amazon Prime.