Management Tip of the Day: 3 Questions Your Business Model Must Answer

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Are you having trouble viewing this email? If so, click here to see it in a web browser. HOME   |   BLOGS   |   THE MAGAZINE   |   BOOKS   |   AUTHORS   |   STORE RSS   |   Mobile MARCH 31, 2010 3 Questions Your Business Model Must Answer There is little consensus on what a business model should include. Some feel it should cover every detail, while others believe it should simply answer the question of how you intend to make money. You can create a business model that is specific enough to avoid being reductionist but selective enough not to overwhelm by answering these three questions: Why would someone want to buy something from you? Identify your customer value proposition. How will you make money selling it? Articulate your profit model. What, exactly, are the important things you need to do to succeed with the plan? Identify which company resources and which processes are essential to delivering your customer value proposition. Today's Management Tip was adapted from "A New Framework for Business Models" by Mark W. Johnson. Read the full post and join the discussion » Share Today's Tip: RELATED PRODUCT Seizing the White Space: Business Model Innovation for Growth and Renewal Harvard Business Press Book Business model innovation is the key to unlocking transformational growth — but few executives know how to apply it to their businesses. In Seizing the White Space, Mark Johnson gives them the playbook. ADVERTISEMENT Follow the Tip: BEST SELLERS 10 Must-Read Articles from HBR Guide to Better Business Writing HBR 2009: A Year of Management Ideas HBR's Must-Reads on Managing Yourself How to Get the Right Work Done PREVIOUS TIPS Confront the Top 3 Excuses for Not Speaking Up 3 Things to Do Before You Disagree With the Strategy Let Your Customers Sell to Themselves How to Be a Changemaker 3 Reasons You Shouldn't Leave Your Job A Cheap and Instantly Effective Social Media Idea 6 Steps to Sizing Up a Negotiation 3 Tips for Assessing a Job Offer 3 Tips for Downsizing the Right Way How to Be a Good Leader in a Recession HBR Online Trial Access HBR's in-depth business archives FREE for 14 days. Register today » UNSUBSCRIBE   |   UPDATE YOUR PROFILE   |   MORE EMAIL NEWSLETTERS   |   PRIVACY POLICY Was this email forwarded to you? If so, sign up to start receiving your own copy. ABOUT THIS MAILING LIST You have received this message because you subscribed to the "Management Tip of the Day" email newsletter from Harvard Business Review. If at any point you wish to remove yourself from this list, change your email address, or sign up for other email newsletters and alerts, please visit the Harvard Business Review Email Newsletter Preference Center. ADVERTISE WITH HBR This enewsletter is read by thousands of decision makers every day. Learn more about connecting your brand with this audience. Copyright © 2010 Harvard Business School Publishing, an affiliate of Harvard Business School. All rights reserved. Harvard Business Publishing | 60 Harvard Way | Boston, MA 02163 Customer Service: 1-800-545-7685 (617-783-7600 outside the U.S. and Canada)