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Building Blocks for Your Business

The standard model used to develop a business plan consists of nine basic building blocks.  These help you think through how the aspects of your business work together.  When properly understood, they become building blocks for your business.

Our team can help you break down these building blocks for your company and guide you through a strategic planning process.

Building Blocks for Your Business

MLA is a business finance, strategy, and solutions provider provider headquartered in Dayton, Ohio, with team members in Southwest Ohio and the Southeastern US.

The following interrelated building blocks represent different factors an organization needs to consider when setting up its business model. This model is often used as the standard reference for the 9 building blocks of strategic management.

  1. Customer Segments

One major component of a customer segment is demographics which can determine the approach, for example, to mass markets or niche markets.  Attributes such as location, behaviors, income, etc., should be assessed.

  1. Value Propositions

This is an implied contract that the company will provide goods or services in exchange for payment.  Customer segments must be considered when targeting them to choose your value proposition over a competitor’s.

  1. Channels

Channels include awareness (advertising), evaluation (surveys), purchases (web or storefront), transfer (over the counter or delivery), and after-sales (returns, call center, customer assistance)

  1. Customer Relationships

Relationships are critical to 1) customer retention, 2) developing confidence in your organization so your upselling techniques are valued, and 3) generating new leads.

  1. Revenue Streams

The two universal streams are transactional revenue, a single payment for goods or services, and recurring revenue, multiple payments for continuing service, for example, subscriptions.  Other examples are project revenue and service revenue.

  1. Key Resources

Key resources are important assets required for success and are needed to support the other building blocks.

  1. Key Activities

Key activities interact with the other building blocks and are required to make the business model work.

  1. Key Partnerships

The four main partnerships are strategic partnerships, strategic alliances, joint ventures, and the buyer–seller relationship.

  1. Cost Structure

Considering all costs, the business model should create value and generate income.

The research by Alexander Osterwalder and 470 co-creators resulted in the Business Model Canvas, initially proposed in their 2010 book Business Model Generation: A Handbook For Visionaries, Game Changers, and Challengers.

MLA Companies can help your organization succeed with these building blocks.  Contact us.