Rajat Negi

Understanding Business Model’s Feasibility

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The business model’s feasibility depends on resources, activities, and relations. 

I believe you have read my previous article related to the Business Model. If not then you can read by clicking on this link.

Consider your dream car in front of you.

So what is the first thing that is present in your car?

Yes, FUEL without fuel you cannot run the car. Similarly, you need to know what are the factors that are behind the feasibility of your business. 

Understanding Key Resources to check feasibility

It might be of the financial, physical, intellectual, or human capital variety. Key resources can be categorized into the following subsets:-

  • Capital:- It refers to financial help to the business. raised capital from funding or taking loans from financial institutions can also be part of this.
  • Physical:- this includes fixed, tangible assets of the business such as machinery, furniture, land, building, etc.
  • HR:- Human resources will be the most important asset for your business. you may get talented partners for your business. 
  • Virtual:- this includes intangible assets such as goodwill, intellectual property, copyrights, patents, trademarks, etc.
Now just try to fill the Key Resources column in the business canvas model.

 

Understanding business models feasibility - Understanding Business Model's Feasibility

It is the most crucial backstage component that allows the front stage show to take place. You may feel the furniture which is in the office is one of the key resources but let me tell you frankly it is not the key resource. 

Let me do it easily for you. 

The decisive criteria for the business are whether the furniture is dispensable or indispensable, therefore any resource in your organization that can collapse your business canvas model for at least 6 months to 10 months is the crucial resource.

Key resources can be anything Tangible or Intangible.

  • Plants and Machinery if you are in the domain of manufacturing. 
  • Employees:- if you are providing specific services.
  • Platform or website:- If your business is related to technology.

It is critical to determine the essential resource and ensure that it is properly cared for. You preserve the firm’s main resources by nurturing the key resource and investing properly in them. This results in de-risking the business. If you don’t specify your critical resources, you risk losing them, which is extremely hazardous and detrimental to your organization.

Understanding Key Activities to check feasibility

To understand this first you need to know what are you are delivering whether it is a product or it is a service. Key activities can be categorized into the following subparts:-

  • Production:- When you’re making something new. It has anything to do with production. Let’s say you are making a product for this you need to have first the raw materials so that you can convert it into a semi-finished product and then you can convert it into the finished product and ready to sell in the market. Examples can be software, food packets, Jackets, etc.
  • Problem Tackle:- It is mostly services that your business is offering. It has some correlation with the profession in which you are in. Example:- Doctors, Lawyers, CAs, etc.
  • Platform:- Communication for a mutual objective. Facebook is the best example of this. It can be anything like matchmaking, listing, community, social media, etc.
Key activities basically are core business activities. 
When it comes to growth then, for business there are two types of growth.
 
  • Linear:- For this type of growth you need more and more funds. If the business is growing then your business should also increase capital. If we plot this on a graph then a straight line will be drawn where growth and capital are on X-axis and Y-axis respectively.
  • Non-Linear:- For this type of growth little fund is sufficient. If we plot this on a graph then an exponential line will be drawn where growth and capital are on X-axis and Y-axis respectively.

Make your company model non-linear by aiming for a four-fold increase in revenue. We don’t require four times the rate of capital growth.

Now you can easily fill the column of Key Activities on the business canvas model. 

Understanding business models feasibility 2 - Understanding Business Model's Feasibility

Understanding Key Partners to check feasibility

Strategic alliances, coopetition, partnerships, and buyer-supplier relationships are all examples of key partnerships.

  • Strategic alliance: part of non-competing business model.
  • Coopetition:- Rival companies come together for a specific objective.
  • Partnership:- Mutual Agreement for a specific objective.
  • Buyer-Supplier:- This can be seen in the business model of manufacturing. 

You are not intended to control all of the company’s assets. Key partners maybe the owners of some of the resources. Outsourcing is distinct, and it is carried out for a distinct motive.

Now, you can easily fill the block of Key partners.

Understanding business models feasibility 3 - Understanding Business Model's Feasibility

I hope, I have thoroughly explained the business canvas model’s feasibility to you. If you still have queries related to the same then you can leave a comment. I will surely respond to it. DO SHARE THIS ARTICLE with your friends or family who are engaged in any startup or business. 

To your Success

-Rajat Negi, Logging Out 1f917 - Understanding Business Model's Feasibility

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Rajat Negi

Compound Investor (Who loves to talk to stock)
Digital Marketer (Who loves to make brands)

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