A Business Model Template Essay

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A Business Model Template . Business models A business model is a description of how a business makes (or intends to make) money. It is the centerpiece of the business plan. Constructing a business model is the first step in planning to start a business. The purpose of a business model is to insure that all the factors needed to operate a successful business are considered and analyzed to make sure they are reasonable and achievable. Business models describe the products and services offered for sale, the business infrastructure required to produce and sell these products and services, the target customers that the business expects will buy these products and services, and the financial results and profit the business expects to achieve. Following is a template describing the contents of a business model developed by Alex Osterwalder, PhD. There are 4 parts to this business model. Part 1- The offering – this is what the business produces and sells • Value proposition: The value proposition is a description of the products and services the business offers and why customers will be compelled to buy them. The value proposition describes the problem the customers are experiencing and how the products and services being offered will help solve that problem. It describes how the features and characteristics of the products and services will contribute to the solution of the customers’ problem. Part 2- Infrastructure– This is the part of the business that creates expenses. This part describes the basic facilities, skills, manpower, partnerships, and production process needed to exploit the business opportunity. • Core capabilities: The capabilities and core competencies necessary to operate the business. This includes land, facilities, equipment, personnel and their required skills needed to produce the products or services described in the

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