1. ENTR 4800: Social Entrepreneurship
Class 3: Business Modelling for Social
Enterprise
Monday, September 26, 2011
Instructors:
Norm Tasevski (norm@socialentrepreneurship.ca)
Karim Harji (karim@socialentrepreneurship.ca)
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2. © Norm Tasevski & Karim Harji

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Agenda
• Centre for Social Innovation
• What are the components of a business model for
social enterprise?
• Guest Speaker – Bill Young
• What did we learn – Today?
• Next week
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5. Business Modelling for Social
Enterprise…
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6. © Norm Tasevski & Karim Harji
A Caveat…
When we business model for social enterprise, we
focus on the “business”, not the “social”…
But don’t worry, we will come back to the “social”
later…
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A Second Caveat…
“Business
“Business Form/Legal
Model” Structure”
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A Third Caveat…
“Business “Business
Model” Plan”
Business
Model
1st!!!
(Business
Plan
2nd)
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9. Why business model 1st and plan 2nd?
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Because…
It is a cure for “We Need a Plan-itis”
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And…
It is a Quick way to assess Profitability/Sustainability
– Why spend months building a plan if you don’t have a real
sense of profitability/sustainability?
– If your model doesn’t make money, even with the most
ideal conditions…
…STOP! (…and rethink your business model)
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One More…
It breaks down highly complex business ideas into
easily digestible (and visual) chunks
– Gets to the heart of what you need to know to:
Make a Go No-
Go Decision
Set Strategy
Make Potential
Investors/funders
(and business
partners) Happy :)
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13. Business Plans
Business Models
Are big and complex
Are small and visual
(often 50-100+ pages)
(1 page with about 10 supporting
pages)
Cover many topics
Focus on a few topics
(business description, financials,
marketing strategy, HR strategy,
(Will you make $$? How do the
Operations Strategy management team, pieces fit together?)
etc, etc, etc)
Take weeks/months to Take a few days (possibly
create
hours) to create
Are necessary for Feed the business plan!!
investors, funders,
business partners, etc
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Our Goal for Today
We’ll be building business models for YOUR business
idea…
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user networks!
franchising!
freemium! ! web ads!
etc…etc…etc…!
licensing!
retail! micro-finance!
subscription! loyalty!
open-source!
nonprofit (donation)!
solution shops!
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Some Definitions
• “A business model describes the rationale of how an organization
creates, delivers and captures value – economic, social, or other
forms of value”
Wikipedia
• “A description of the means and methods a firm employs to earn the
revenue projected in its plans. It views the business as a system and
answers the question, “How are we going to make money to survive
and grow?”
BusinessDictionary.com
• “A business model describes the specific way the business expects to
make money. While a business plan is on paper (lots of paper!) a
business model should be small enough to stay in the heads of the
owner and staff. If a business model is on paper, it should be one
page, and it would be more clearly shown as a diagram than as
words.”
AudienceDialogue.net
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Customer Segments
What you need to care about is…
– Customer “Pain”
– Difference between a “customer” and a “client”
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Empathy Mapping

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Who are your customers?
What does their Empathy map look like?
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Value Proposition (the “Offer”)
What you need to care about is…
– The “value” you are creating for customers (in terms
of products/services), and the “pain” you are
alleviating
– An exchange of value 21

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Quick…
What is the last thing you bought?
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Customer Utility
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What is your value proposition?
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Channels
What you need to care about is…
– How the customer receives the offer/value prop
– The physical “movement” of the offer into the hands
of the customer
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How do you “touch” your customers?
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Relationships
What you need to care about is…
– Personal and impersonal interaction with the
customer
– The “movement” of information (e.g. marketing,
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What relationships will you make with your customers?
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Revenue Streams
What you need to care about is…
– Cash!!! (specifically, how cash flows into the
enterprise) – “Money In”
– Pricing models
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How do you plan to bring in cash?
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Key Resources
What you need to care about is…
– Assets…
– …and how these assets create value
– Includes human, physical, intellectual, and financial
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What are your key assets?
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Key Activities
What you need to care about is…
– Actions (specifically, the actions you plan to take to
generate value)
– Both “direct” and “indirect”
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What are your key activities?
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Key Partners
What you need to care about is…
– People/organizations that are integral to enabling
you to do business
– How you partner, and what you partner on
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36. What makes a good partnership?
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A
Common Commitment
Vision! to Invest in
the
Partnership!
Same Core
Values!
Discreet
Missions!
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Who do you need to partner with?
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Cost Structure
What you need to care about is…
– Fixed costs, variable costs, economies of
scale…“money out”
– At this stage, focus on your cost assumptions! (don’t
worry about actual $$) 39

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What does your cost structure look like (in simple
terms)?
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42. So…what
does a
completed
biz model
look
like???
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Lending and Personal
collecting $$
s
$$ Microloan
Government
BOP
rs
Entrepreneu
Branches
-Branches
-Brand
-Capital
-People
Interest rates
ts
-Capital Cos
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Tip…
• Be a Business Model “Alchemist” – You need to go
through the business model process many times in
order to figure out which model best fits
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45. Break
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Bill Young, Social Capital Partners
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“Sticky Ideation”…
What we know! What we Don’t
Know!
Bridging the Gap!
!
(turning what we
don’t know into what
we know)!
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What did we learn?
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Next Class
• Deliverables:
– The “revenue” side of your business model (and your
motivations, mission, vision and values)
• Readings
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