Entrepreneurship
Glossary
SECTION 5
FINANCING
(Impact Business Model)
(Key Performance Indicator)
BUSINESS MODEL
01
The business model is a framework which enables you to analyse how your business will create, deliver and capture value in economic, social, cultural or other contexts.
The term business model is used to describe and to represent core aspects of a business, including purpose, business process, target customers, offerings, strategies, infrastructure, organizational structures, sourcing, trading practices, and operational processes and policies including culture.
The Business Model Canvas (BMC) is a tool to quickly and easily define and communicate a business idea or concept. It is a one page document which works through the fundamental elements of a business or product, structuring an idea in a coherent way. A company can operate several business models at the same time.
The Business Model canvas tool is frequently used in entrepreneurial training programmes and in business plan competition support sessions. You can find examples here:
https://vizologi.com/free-business-model-examples/
REVENUE MODEL
02
The Revenue Model describes how a company generates revenue or income from the value it has generated for customers. The Revenue Model is therefore an important component of the business model. Each customer segment can contain one or more sources of income or revenue streams.
You can look up types of revenue models here:
https://businessmodelnavigator.com/explore.
When describing your business, you should always describe the revenue model and / or mention “our revenue model is similar to [insert name of known company]” to help stakeholders understand your model.
REVENUE STREAMS
03
Revenue streams are the sources of income for your business. A revenue stream can be:
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recurring eg through subscriptions or contract deals
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transactional i.e. based on individual sales, service i.e. related to the time of the people who work in your company, e.g. consultancy
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project i.e. relating to the income from a single project, rather than your ongoing business operations
You can look up examples of revenue streams here:
https://businessmodelnavigator.com/explore
IMPACT BUSINESS MODEL (IBM)
04
People - Planet - Profit
Impact business models show how your business has a positive social or environmental impact, beyond its normal operational functions. They can be linked to B Corp certification.
Creating an impact business model is a strategic decision. The elements covered in the IBM need to be intentional (i.e. not a convenient by-product of your operations), and focussed on a significant benefit to a clearly defined stakeholder. They should be supported by formal and verifiable processes and should be a permanent feature of the way your business operates.
KEY PERFORMANCE INDICATOR (KPI)
05
Key Performance Indicators track the progress of your business towards clearly defined goals.
Each of your business objectives should have one or more KPI, which you will use to assess, measure and evidence improvement over time.
KPIs must be objective, quantifiable and be a measure of elements which are critical to the success of your business. They can be used to track strategic goals, operational development, team/individual performance etc.
ONE PAGER
06
A single page document that clearly sums up your business and which you can present as an introduction when speaking to anybody who needs to understand what you do, including funders.
Bear in mind that this will be the first thing the people you are approaching see and may be the only thing they read before meeting you.
The key characteristic of a good one pager are clear, concise content and an attractive easy to read layout. The document should look as professional as possible. It should entice people to want to know more.
A one pager will typically include:
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a description of your business
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the problem you aim to solve
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the unique benefits you offer
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what you need in order to deliver successfully
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what you are looking for from the people receiving the document
PITCH
07
A pitch is the presentation of your business idea and plan to people who may have in interest in investing. It is usually time limited (1 min, 3 min, 5 min 10 min) and typically takes the form of some form of presentation, followed by a Q&A. It is really important that you know the time you have beforehand and tailor your presentation to suit the timing.
The following topics should be included in all versions:
When you have more time or presenting to investors, you need to include financials. It takes a lot of effort to get this right, so practice practice practice with team members, friends and other individuals who support you.
PITCH DECK
08
A pitch deck is the presentation (slides) used during your pitch. Common tools for a pitch deck are PowerPoint and Prezi.
It is possible to pitch without a deck, but a well presented and organised set of slides can both give structure to your presentation and be left with the potential investors so that they have something concrete to remind them of the presentation. If you are planning on pitching without a deck (which can also have impact) make sure that you have something tangible to leave at the end of the meeting.