2. Defining Your Business Model /

2.2. Defining your business model

STANDARD:

We can describe our business model in a way that is easy for others to grasp.

To meet the standard in full, you can provide a one-page summary of your business model that is easy for your team, advisors and investors to understand. This will explain how you will achieve your business goals and make a positive impact.

Setting out your business model visually, in the form of a diagram, can be helpful in coming to a better understanding of how and why our social enterprise works. It can also help communicate this to others.

This is where a Business Model Canvas can be useful. This is a one-page visual format for designing business models that was first developed by Alexander Osterwalder. It is a blueprint for a business that helps you strip away all the unnecessary details and wild predictions usually found in a traditional business plan.

You might want to check out this series of animated videos that look at how to define and communicate your business model in a simple, intuitive way.

To recognise the unique features of social enterprises, the Social Enterprise Institute has developed its own variation called the Social Business Model Canvas.


This is intended to help you have structured conversations around the crucial activities and challenges involved in making your business work and achieve maximum impact. It involves the following main aspects:

  • Key Allies: The key people and groups that you must involve and will shape your success.
  • Key Activities: The things you do, deliver or produce to meet customer needs and solve the social problem.
  • Key Resources: The resources (human, financial, physical) you own, or need to acquire or develop, to carry out your work.
  • Social Innovation: The compelling innovations that lie at the heart of your solution to society’s needs, and make the solution stand out.
  • Value Proposition: The combination of things that make your organization and its work uniquely valuable to stakeholders.
  • Channels: The ways that you will communicate with and reach the people or groups that will buy from you and benefit from your work.
  • Customer Relationships: How you will interact effectively with the people or groups that ultimately pay for your goods or services.
  • Consumer Benefits: The ways in which people or groups that use your service derive satisfaction and benefit from it.
  • Cost of Delivery: The major elements of cost involved in delivering your work and meeting needs.
  • Revenue Streams: The main sources of earned income, grants, and donations that are generated to support your work.
  • Community Reinvestment: How you will reinvest any surplus you make in support of your organization and its mission.

You can find out more about how to use the Social Business Model Canvas here.

There is also a special online course on business model design for social enterprises that has been created as part of the Impact Practice series available through the Social Enterprise Institute.