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Powerpoint 2-16-2009

Powerpoint 2-16-2009 - Business 173c Business Models and...

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Business 173c Business Models and Bootstrapping Professor Bennet
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Agenda Announcements Lecture: Business Models and Bootstrapping Case: ONSET Ventures
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Why are business models important to the entrepreneur? They are important to investors Highlights key assumptions and risks to venture Provides focus and acts as a roadmap Tells a Story of how the business works Proves validity of business proposition Once business model is defined, preparing the business plan is simple
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Business Models Definition System that enables a company to grow and make money on a sustainable basis Core business decisions and tradeoffs employed by a company to earn a profit System that is complex and dynamic Value Engine Business Model Components Markets and Customers Products and Services Distribution Financial Model
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Business Model Components Markets/Customers Products/Services Distribution Channels Can you make money? Financial Engine
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Business Model Basics Story that explains how an enterprise works Who is the Customer? What does the customer value? How do you make money in the business? What is the economic logic that explains how we can deliver value to customers at appropriate cost? Core Business Decisions and tradeoffs employed by a company to earn a profit Revenue Sources Cost Drivers Investment Size Critical Success Factors
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Business Model Revenue Costs Investment CS Factors revenue sources? pricing and time to money • single or hybrid model? what factors impact overall costs? fixed vs. variable costs? • where are cost centers & drivers? • gross margin/operating margin • Key operational competencies? • Which factors most affect business? use sensitivity analysis (what if) how much $ to get to CF positive?
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