When embarking on a business creation project, whether start-up or not, formalizing your business model is often not the top priority. And yet, if the different segments are not coherent, the risk of failure is high... Scrupulously aligning the different pillars of the value chain right from the design stage enables your business model to evolve in the right direction and at the right time.

Since the job of an entrepreneur is above all to ask a lot of questions (and of course to do business), we'll try to answer a few:

• Where do I start when drawing up a business plan?
• Which matrix to use and how?
• Which business model should you choose?

‍Businessmodel: 4 key questions

In a competitive environment, choosing the right business model for your innovative project is key, as it is one of the elements that will enable you to differentiate yourself in the delivery of your added value, while ensuring you have a healthy business.

To do this, you need to ask yourself several questions:

• Who's the target?
• What is the unique value proposition of my product or service?
• What are the sources of revenue? Are they the right ones?
• What is the cost structure? In other words, is it adapted to the added value of the product or service?

1. Who's the target?

Objective: precisely define the profile of the target audience to identify opportunities for developing and improving the model.

• Which SPC does the target belong to?
• What age bracket is she in?
• Where is it located?
• What is its purchasing power?
• What are its living and consumption habits?

2. What's the value proposition?

Objective: identify what makes the product or service unique for your customers. At this stage, be careful not to confuse the value proposition with the corporate mission, marketing slogan or product features. In other words, identify the real value you create for the customer, not the one you think you're creating.

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3. Are your sources of revenue the right ones?

Objective: find a revenue model that is relevant to your value proposition.

Questions to ask yourself :

• What's the best revenue model for you?
• Does monetization come from the heart of value creation?
• What other levers can be monetized? Missed monetization opportunities?

For example, Yuka took a long time to identify a viable revenue stream, until finally freeing it from nutrition programs accessible from a premium subscription formula.‍

4. Is the cost structure adapted to the value provided by the product or service?

Objective: develop a cost structure that is both profitable now and viable in the long term. Some business models have "hidden costs" that only become apparent once the machine is up and running - often too late.

Tediber, for example, by deciding to position itself in the mattress vertical via e-commerce, made huge savings on production and the rent incurred by opening stores. On the other hand, the absence of in-store trials meant more mattress returns, and the marketing costs of becoming 100% known online were colossal... In the end, the calculation was wrong, as Tediber's cost structure deteriorated over the long term.

Following a matrix: the business model canvas

Organized into several categories and associated questions, the business model canvas is a matrix that helps to structure a company's business model simply by considering all its elements. Modeling your business from the outset enables you to identify opportunities you might otherwise have missed.

1. Our partners

In addition to saving you money by facilitating the distribution of your offer, your partners can be sources of savings, for example by extending their field of action.

Ask yourself these questions to identify your room for manoeuvre:

• Who are your key partners?
• What are their activities?
• Who and where are your suppliers?
• What resources do they provide?

2. Activities ‍

Consider the activities required to create value:

• Making your offer
• Ensuring distribution
• Build and develop your customer relationships
• Manage your sources of costs and revenues

3. The resources

Ask yourself what resources you need to :

• Making your offer?
• Build and develop your customer relationships?
• Manage your revenue streams?

4. The offer

Defining the contours of your offer should enable you to know precisely the perceived value of your products or services:

• What value do you deliver to your customers?
• What customer problems do you solve?
• What group of products or services do you offer each customer segment?
• What customer needs do you meet?

5. Customer relations

Finding the right tempo and ensuring an irreproachable customer relationship is what will enable you to create loyalty to your product or service:

• What type of relationship does each customer segment want you to establish with them?
• How do relationships fit in with the rest of your business model?

6. Customer segments

Knowing and satisfying your customers is the basis of any successful business model:

• Who do you create value for?
• Who are your most important customers, those to whom you sell the most?
• Who are your potential customers?

7. Distribution channels

Take stock of your current distribution channels to identify potential opportunities:

• How do you interact with your customer segments?
• Which works best?
• Which is more profitable?

8. Cost sources

The key is to ensure that these costs are structurally sound and amortized by your revenue streams:

• What are the most important costs in your business model? Are they fixed or variable?
• What is the cost: resources, activities
• What are your revenue streams?

9. Sources of revenue

Ask yourself these questions to ensure not only that your model allows you to generate revenue, but above all that your sources of revenue are the right ones and maintain the viability of your model:

• What value are your customers really willing to pay for?
• What are they currently paying for?
• How do they currently pay?

Feel like doing the exercise? Download your Business Model Canvas at the end of the article 👇

‍Whichbusiness model to choose? The Air France vs. Ryanair battle

Obviously, there is no single answer to the question of choosing a business model, which depends on a number of factors that all the matrices in the world would be unable to sort out: B2B or B2C market, product or service, digital or physical...

What we can say, however, is that between AirFrance and Ryanair, there is a good student and a not-so-good student:

Key takeaway: Ryanair's business strategy of focusing its value creation on low-cost flights is reflected at every stage of its Business Model Canvas. Whereas AirFrance multiplies its activities to ultimately have fewer sources of revenue, Ryanair has built an innovative, inverted business model: multiply its sources of revenue and outsource its activities as much as possible.

Conclusion

As a project owner, asking the question of your business model and equipping yourself with a synthetic matrix will make your task much easier, and enable you to draw up a realistic business plan. This technique will prevent you from having to revise your model entirely along the way, which doesn't mean you won't need to evolve your model along the way to make it optimal. Next, it's up to you to identify the opportunities and their associated costs, depending also on the mission you wish to achieve through your business project.