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This is a free service provided by a research group of volunteers from the
Sprott School of Business and Faculty of Engineering and Design at Carleton
University in Ottawa, Canada.
We believe that sound business models are an essential, even fundamental,
building block for new and established enterprises. For startups, a good
business model can mean that the harder you work, the more money your enterprise
will make, an obviously important consideration for new entrepreneurs. For
existing businesses, even mega corporations, they need to continually update and
revisit their business models to ensure that they are changing and responding to
evolving conditions in their marketplaces.
A business model is the engine of the enterprise; it describes (preferably on
one page and in a diagrammatic fashion) how product and services flow from
suppliers to the business, how these products and services are transformed in
a value-added process by the business and then transmitted or transferred to
its clients and customers. It then follows how money flows in the opposite
direction back from client and customers to the business and its suppliers.
Furthermore, there is an orthogonal dimension which describes how the
business finds customers and clients; i.e., how the business markets its
products and services to its customer base. One thing we have learned is that
if you need heroic measures to find and keep your first customer, your second
customer, ..., your nth customer, your business is probably not viable.
Although we have developed the BMG primarily as a tool to assist new business
formation, we have found that not-for-profit corporations, charitable
organizations and non governmental organizations can benefit and learn from
having a business model.
The BMG will take you through a number of steps including: testing your ECQ
(Entrepreneurialist Culture Quotient) Score (are you ready to be an
entrepreneur), helping you understand how you can use guerrilla marketing and
bootstrap capital in designing your business model, learning and discovering
what the 'pixie dust' is in your business model (i.e., what are the factors that
really make your business work), generating a schematic diagram of your business
model, scoring your business model and, finally, comparing your business model
score with other enterprises.
For more about business models, please click here
or here for examples.
Remember that no amount of testing can replace or predict real life success
or failure. When Fred Smith created Fed/Ex, he created a new category of
business and he needed to create a new market with it, one that wanted
overnight package delivery. Fed/Ex's original business model scores only 55%
on our test because it needed huge amounts of capital to start, because it
could not sign up customers and clients in advance, because it needed heroic
efforts to find its client base and for a lot of other reasons.
Yet Fed/Ex is a huge success so a low score from the BMG does not mean that
the new enterprise will fail. However, for every Fed/Ex that worked with a
BMG score of 55%, we believe there will be many, many that won't work: they
will run out of money long before they reach critical mass.
We believe that entrepreneurship is the key to pulling people out of poverty
around the planet; that it is a force for effective, sustainable use of the
planet's resources and that entrepreneurship gives people more control over
their working lives, an important consideration in a rapidly changing global
economy where real security comes from what you have learned, studied and
created for yourself.
Best of luck,
The BMG Group,
Ottawa, Canada
September 7th, 2004
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