In the journey of finding a repeatable and scalable Business Model, that i can build up on and grow, i have to evaluate each version of the business model starting from the current business model i have reached through our current valuable customers
How to evaluate the Business Model?
In my opinion the reference to evaluate the model is the business model bottom sections:
1. Revenue Stream
2. Cost Structure
The revenue streams should consider:
1. Market Size: for the targeted Customer Segments
2. Market Share: this is a hypotheses for the desired market share
3. Pricing: which will allow us to access these segments and win this share
The Cost Structure should consider the following at least:
1. The cost of providing the Resources and Activities to provide the service
2. The relation between the Cost and the Market Share
This means a deep analysis of the costing of providing the service and how this Cost changes with the Market share change
Also we may think about the economies of scale, which means that the Cost Per Single Customer may decrease when the Market Share (Number of Customer) Increases. And this means that we may have a Market Share Threshold
A Market Share Threshold is the Market Size in which due to the economies of Scale if the business model passes this Threshold, the business model become profitable
At the end Comparing the Revenue Streams with the Cost Structure evaluates the Business Model
Mostafa Hashem 