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

www.patelCFOservices.com

Published in: on September 27, 2016 at 4:17 am  Leave a Comment  
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Do You Know Your Business Model?

How well do you know your business model? As an Entrepreneur have you thought about this question?

One has a successful company as the end result of having a consistently well-functioning business model. An Entrepreneur needs to know exactly how his/her business model works.

What are the key Revenue drivers? Is there a competitive advantage? Are there any barriers to entry? Do you have proprietary technology?

What are the key cost components? Are they well controllable? What costs are fixed and which ones are variable? Is your model labor sensitive or capital-intensive?

What are the other variables that have a significant influence on your model? Distribution? Customer service? Rapid response times?

An entrepreneur has to not only to know answers to the above questions and more, but more importantly he/she needs to determine the sensitivity of each of the components to the whole model. What are the few variables, that have a tremendous impact on the model, if tweaked even slightly could make the model better?

Only when you can fully understand your business model, you can make it better! Do the Right Things!

Ravi Patel

http://www.patelCFOservices.com

Published in: on September 3, 2014 at 3:34 am  Leave a Comment  
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Knowing your Business Model

Entrepreneurs, do you fully understand your Business Model? What drives your business and what affects it?

What generates 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 . Have you ever performed sensitivity analyses on the 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

www.patelCFOservices.com

Published in: on October 15, 2013 at 3:20 am  Leave a Comment  
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Knowing Your Business Model

How well do you know your business model? As an Entrepreneur have you thought about this question?

One has a successful company as the end result of having a consistently well-functioning business model. An Entrepreneur needs to know exactly how his/her business model works.

What are the key Revenue drivers? Is there a competitive advantage? Are there any barriers to entry? Do you have proprietary technology?

What are the key cost components? Are they well controllable? What costs are fixed and which ones are variable? Is your model labor sensitive or capital-intensive?

What are the other variables that have a significant influence on your model? Distribution? Customer service? Rapid response times?

An entrepreneur has to not only to know answers to the above questions and more, but more importantly he/she needs to determine the sensitivity of each of the components to the whole model. What are the few variables, that have a tremendous impact on the model, if tweaked even slightly could make the model better?

Only when you can fully understand your business model, you can make it better! Do the Right Things!

Ravi Patel

www.patelCFOservices.com

 

Published in: on January 23, 2012 at 5:59 am  Leave a Comment  
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