This document outlines the agenda and content for a class on business modeling for social enterprises. The class will cover the basics of business modeling including customer segments, value propositions, revenue streams, key resources, activities and partnerships. It emphasizes that the business model should come before the business plan and focuses on assessing profitability and sustainability. Examples are provided for each business model component and the instructor notes that the business model process may need to be done multiple times to find the best fit model.

1. APS 1015: Social Entrepreneurship
Class 2: Business Modeling for Social
Enterprise
Saturday, September 22, 2012
Instructors:
Norm Tasevski (norm@socialentrepreneurship.ca)
Karim Harji (karim@socialentrepreneurship.ca)
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2. © Karim Harji & Norm Tasevski

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4. © Karim Harji & Norm Tasevski
Agenda
• Centre for Social Innovation
• Business modeling your social venture
• What did we learn – Today?
• Next week
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5. Business Modelling for Social
Enterprise…
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6. © Karim Harji & Norm Tasevski
A Caveat…
When we business model for social enterprise, we
focus on the “business”, not the “social”…
But don’t worry, we will come back to the “social”
later…
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7. © Karim Harji & Norm Tasevski
A Second Caveat…
“Business
“Business Form/Legal
Model” Structure”
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8. © Karim Harji & Norm Tasevski
A Third Caveat…
“Business “Business
Model” Plan”
Business
Model
1st!!!
(Business
Plan
2nd)
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9. Why business model 1st and plan 2nd?
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10. © Karim Harji & Norm Tasevski
Because…
It is a cure for “We Need a Plan-itis”
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And…
It is a Quick way to assess Profitability/Sustainability
– Why spend months building a plan if you don’t have a real
sense of profitability/sustainability?
– If your model doesn’t make money, even with the most
ideal conditions…
…STOP! (…and rethink your business model)
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12. © Karim Harji & Norm Tasevski
One More…
It breaks down highly complex business ideas into
easily digestible (and visual) chunks
– Gets to the heart of what you need to know to:
Make a Go No-
Go Decision
Set Strategy
Make Potential
Investors/funders
(and business
partners) Happy :)
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13. Business Plans
Business Models
Are big and complex
Are small and visual
(often 50-100+ pages)
(1 page with about 10 supporting
pages)
Cover many topics
Focus on a few topics
(business description, financials,
marketing strategy, HR strategy,
(Will you make $$? How do the
Operations Strategy management team, pieces fit together?)
etc, etc, etc)
Take weeks/months to Take a few days (possibly
create
hours) to create
Are necessary for Feed the business plan!!
investors, funders,
business partners, etc
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14. © Karim Harji & Norm Tasevski
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15. © Karim Harji & Norm Tasevski
Some Definitions
• “A business model describes the rationale of how an organization
creates, delivers and captures value – economic, social, or other
forms of value”
Wikipedia
• “A description of the means and methods a firm employs to earn the
revenue projected in its plans. It views the business as a system and
answers the question, “How are we going to make money to survive
and grow?”
BusinessDictionary.com
• “A business model describes the specific way the business expects to
make money. While a business plan is on paper (lots of paper!) a
business model should be small enough to stay in the heads of the
owner and staff. If a business model is on paper, it should be one
page, and it would be more clearly shown as a diagram than as
words.”
AudienceDialogue.net
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16. © Karim Harji & Norm Tasevski
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Customer Segments
What you need to care about is…
– Customer “Pain”
– Difference between a “customer” and a “client”
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18. © Karim Harji & Norm Tasevski
Empathy Mapping

19. © Karim Harji & Norm Tasevski
Value Proposition (the “Offer”)
What you need to care about is…
– The “value” you are creating for customers (in terms
of products/services), and the “pain” you are
alleviating
– An exchange of value 19

20. © Karim Harji & Norm Tasevski
Quick…
What is the last thing you bought?
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21. © Karim Harji & Norm Tasevski
Customer Utility
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Channels
What you need to care about is…
– How the customer receives the offer/value prop
– The physical “movement” of the offer into the hands
of the customer
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23. © Karim Harji & Norm Tasevski
Relationships
What you need to care about is…
– Personal and impersonal interaction with the
customer
– The “movement” of information (e.g. marketing,
communication) 23

24. © Karim Harji & Norm Tasevski
Revenue Streams
What you need to care about is…
– Cash!!! (specifically, how cash flows into the
enterprise) – “Money In”
– Pricing models
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25. © Karim Harji & Norm Tasevski
Key Resources
What you need to care about is…
– Assets…
– …and how these assets create value
– Includes human, physical, intellectual, and financial
resources 25

26. © Karim Harji & Norm Tasevski
Key Activities
What you need to care about is…
– Actions (specifically, the actions you plan to take to
generate value)
– Both “direct” and “indirect”
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27. Break
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28. © Karim Harji & Norm Tasevski
Key Partners
What you need to care about is…
– People/organizations that are integral to enabling
you to do business
– How you partner, and what you partner on
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29. What makes a good partnership?
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30. © Karim Harji & Norm Tasevski
A
Common Commitment
Vision! to Invest in
the
Partnership!
Same Core
Values!
Discreet
Missions!
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31. © Karim Harji & Norm Tasevski
Cost Structure
What you need to care about is…
– Fixed costs, variable costs, economies of
scale…“money out”
– At this stage, focus on your cost assumptions! (don’t
worry about actual $$) 31

32. © Karim Harji & Norm Tasevski
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33. So…what
does a
completed
Business
Model
Look
Like???
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34. © Karim Harji & Norm Tasevski
-Hire staff
-Personal
-Long hours
ce
(Baristas)
-Maintain spa sign
-Store front
-Coffee
ing
-Access to -Wireless
roasting/brew -35 yr old You
ng
-Coffee n
space
-Interior desig professional
that
suppliers
to
wants a place
k
relax and wor
quietly
-Locations
-Coffee shop
s
g
-Coffee makin
equipment
-Furniture
-Internet
g
-Baristas
-Staff trainin -In-store
-Asset Purchases
acquisition
(multiple per
-Marketing
visit)
-Rent
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35. © Karim Harji & Norm Tasevski
Tip…
• Be a Business Model “Alchemist” – You need to go
through the business model process many times in
order to figure out which model best fits
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36. © Karim Harji & Norm Tasevski
“Sticky Ideation”…
What we know! What we Don’t
Know!
Bridging the Gap!
!
(turning what we
don’t know into what
we know)!
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37. © Karim Harji & Norm Tasevski
Next Week
• Engineers without Borders “Hot Seat”
– Review EWB materials (to be emailed this weekend)
– Be prepared to ask questions! You WILL be graded on it…
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