How Does Your Business Model Work?

What drives your business and what affects it? Entrepreneurs need to fully understand their Business Model.

What creates revenues in your business? What are the key variables that affect your revenues? Understanding your revenue model completely and analyzing the key drivers is an important component in knowing your Business Model . Perform sensitivity analyses on key variables to see how they affect your revenues. What could you do to control the variables and affect the outcomes?

Similarly, what are the key cost and expense components in your business? What is fixed and what is variable? Do you know the broad categories that account for 80% of your costs and expenses? What can you change to increase your bottom line?

What is controllable versus non-controllable in your Business Model? Are external factors a key component?

As an Entrepreneur one needs to fully understand the Business Model not only to improve performance but also to talk intelligently to potential investors.

Ravi Patel

Published in: on September 27, 2016 at 4:17 am  Leave a Comment  
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