Part IV: Build Your Own Business | Chapter 15
Creating Your Business Model
The Goal
By the end of this chapter you will be able to describe on one page how your business creates value and earns money. You will calculate what you earn on each sale, what your fixed costs are, and how many sales you need before you make a profit. And you will know which numbers AI should calculate — and which it shouldn’t.
Understand: the business model on one page
A business model answers one question: how does this business create value for customers, and how does it earn money doing so? You can describe it with nine short answers:
| Building block | Question |
|---|---|
| Customers | Who exactly do I serve? |
| Problem | What problem do I solve for them? |
| Offer | What exactly do I provide? |
| Value | Why is this better than what they do today? |
| Channels | How do customers find me, order and receive? |
| Revenue | How and how much do customers pay? |
| Costs | What do I spend — per sale and in total? |
| Key partners | Who do I depend on? |
| My advantage | What makes it hard for others to copy me? |
If you can’t answer one of these clearly, that is where your next work lies.
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