1. A reader asks...

2. Evolution of a definition...

3. My definition of a business model.

4. Are you stuck with "tribal knowledge?"

5. Help with a franchise manual.

==================================================

1. A reader asks...

Dear Sirs,

What exactly is a business model? I could not find a definition in common literature. I am a student of business economy in Berlin, Germany. I would be very happy if you could give me an answer. Thanks and have a nice day.

Kind regards,

A. R., Berlin, Germany

2. Evolution of a Definition...

This question gives me a chance to review our basic premises again.

I have heard people use the term "business model" many ways. Often, people refer to a specific business process as a business model.

For example, I've heard people call their sal'es process a business model. Similarly, you could program a simulation model for your manufacturing process and call it a business model.

So, let's examine what the American Heritage Dictionary of the English Language says (excerpts).

Business:

1. a. The occupation, work, or trade in which a person is engaged [...] b. A specific occupation or pursuit [...]

2. Commercial, industrial, or professional dealings [...]

3. A commercial enterprise or establishment [...]

4. [...]

Model:

1. A small object, usually built to scale, that represents in detail another, often lar'ger object. [Bad news: A "Barbie Doll" model is NOT built to scale!]

2. A preliminary work or construction that serves as a plan from which a final product is to be made[...]

3. A schematic description of a system, theory, or phenomenon [...]

4. A style or design of an item [...]

5. [...]

Woops! If you combine these two words, you still don't have a specific definition. So, I will use my own definition.

3. My definition of a business model.

Generally, I define a business model as:

--A set of plans for building your business,

--A structural design for your business,

--A "model" business to imitate or emulate,

--Documented standards for your business.

So, let's say you were going to build a business.

You've decided you want to build the "McDonalds" of shoeshine parlors - with parlors all over the planet!

First, you'd need to design and build your model business - your franchise prototype.

Your model would define the pattern for all your shoeshine parlors to follow. It would specify the services, the color scheme, the logo, the way your business treats customers, everything - what to say, what to do, and how to do it.

You would write all this stuff down in Operations Manuals so you could duplicate the business over and over.

You could then sell your franchise - your turn-key shoeshine parlor business - to others who want to own a business but don't want to build it from the ground up.

My point is this. Your model parlor defines how all the other parlors must work to provide consistent quality, service, value, etc.

All successful franchises use the "model" concept, whether they call it that or not. That's why your order of a Big Mac, chocolate shake, and fries is exactly the same in Toronto, Toledo, Topeka, or Timbuktu.

NOTE: The same idea applies to a single facility business.

If all your business processes are documented, a single business (big or small) can provide consistent quality, service, value, etc.

If all your business processes are documented, your business can provide the customer extraordinary results using ordinary people.

You don't need to hire prima donnas!

It doesn't matter if your business is a small sandwich shop, or a giant computer chip maker like Intel.

My company, Senior Management Services, has more than 13,000 pages in its Operations Manuals that define all the business processes.

These Operations Manuals are "living documents" that we update as times and markets change.

If I hire a new accountant, that person receives applicable sections of the Operations Manual that show the business processes necessary to do the accounting successfully.

Since the work is documented, I don't need to hire an accounting "expert."

4. Are you stuck with "tribal knowledge?"

If you have not documented your business model and business processes, your business operates on "tribal knowledge," which means your employees transmit business processes (technology) by word-of-mouth, from person to person.

Tribal knowledge means that as an employee you must know the right guy - and he must be willing to tell you how to do the job. (Good Luck!)

Why?

Some people keep the technology of their position secret, calling it "job security." Ultimately, this method will keep your company stuck.

Your company will be built around personalities, instead of a working business model.

You should not give someone a promotion or raise until they document their job. If they can't be replaced, they're not promotable. And you should document this policy in your Operations Manuals.

Long answer to a short question...

5. Help with a franchise manual.

Like "business model," there's no specific definition for a "franchise manual." I have created a 7-page outline that emphasizes organizational strategy for division of labor.

This same organizational strategy could be used for a single-facility business.

I use a "franchise" model because franchises have a 90+% SUCCESS rate, while typical startups have a 90+% FAILURE rate.

My outline is simply that - an outline. However, today I added an exercise for serious students of business development.

You can download a copy of this franchise manual outline at => Controlling Beverage Costs For Your Restaurant
Restaurants that serve just about any type of beverage can usually benefit from beverage costing, but restaurants that serve alcoholic beverages are the best candidates for beverage costing analysis for increased profitability.Beverages are one of the easier ways to maximize profits for your restaurant due to the lower costs and far greater profit margins than with food.How To Calculate Beverage CostsSimilar to calculating food costs, you need to designate a time frame where you will analyze the beverage costs for your restaurant. This can be one week, one month or several months. Typically, the longer time you allow for analysis, the better and more accurate the information you will gain from the report. Usually, non alcoholic beverages like soda, coffee, juice, water etc, are not inr trade in which a person is engaged [...] b. A specific occupation or pursuit [...]

2. Commercial, industrial, or professional dealings [...]

3. A commercial enterprise or establishment [...]

4. [...]

Model:

1. A small object, usually built to scale, that represents in detail another, often lar'ger object. [Bad news: A "Barbie Doll" model is NOT built to scale!]

2. A preliminary work or construction that serves as a plan from which a final product is to be made[...]

3. A schematic description of a system, theory, or phenomenon [...]

4. A style or design of an item [...]

5. [...]

Woops! If you combine these two words, you still don't have a specific definition. So, I will use my own definition.

3. My definition of a business model.

Generally, I define a business model as:

--A set of plans for building your business,

--A structural design for your business,

--A "model" business to imitate or emulate,

--Documented standards for your business.

So, let's say you were going to build a business.

You've decided you want to build the "McDonalds" of shoeshine parlors - with parlors all over the planet!

First, you'd need to design and build your model business - your franchise prototype.

Your model would define the pattern for all your shoeshine parlors to follow. It would specify the services, the color scheme, the logo, the way your business treats customers, everything - what to say, what to do, and how to do it.

You would write all this stuff down in Operations Manuals so you could duplicate the business over and over.

You could then sell your franchise - your turn-key shoeshine parlor business - to others who want to own a business but don't want to build it from the ground up.

My point is this. Your model parlor defines how all the other parlors must work to provide consistent quality, service, value, etc.

All successful franchises use the "model" concept, whether they call it that or not. That's why your order of a Big Mac, chocolate shake, and fries is exactly the same in Toronto, Toledo, Topeka, or Timbuktu.

NOTE: The same idea applies to a single facility business.

If all your business processes are documented, a single business (big or small) can provide consistent quality, service, value, etc.

If all your business processes are documented, your business can provide the customer extraordinary results using ordinary people.

You don't need to hire prima donnas!

It doesn't matter if your business is a small sandwich shop, or a giant computer chip maker like Intel.

My company, Senior Management Services, has more than 13,000 pages in its Operations Manuals that define all the business processes.

These Operations Manuals are "living documents" that we update as times and markets change.

If I hire a new accountant, that person receives applicable sections of the Operations Manual that show the business processes necessary to do the accounting successfully.

Since the work is documented, I don't need to hire an accounting "expert."

4. Are you stuck with "tribal knowledge?"

If you have not documented your business model and business processes, your business operates on "tribal knowledge," which means your employees transmit business processes (technology) by word-of-mouth, from person to person.

Tribal knowledge means that as an employee you must know the right guy - and he must be willing to tell you how to do the job. (Good Luck!)

Why?

Some people keep the technology of their position secret, calling it "job security." Ultimately, this method will keep your company stuck.

Your company will be built around personalities, instead of a working business model.

You should not give someone a promotion or raise until they document their job. If they can't be replaced, they're not promotable. And you should document this policy in your Operations Manuals.

Long answer to a short question...

5. Help with a franchise manual.

Like "business model," there's no specific definition for a "franchise manual." I have created a 7-page outline that emphasizes organizational strategy for division of labor.

This same organizational strategy could be used for a single-facility business.

I use a "franchise" model because franchises have a 90+% SUCCESS rate, while typical startups have a 90+% FAILURE rate.

My outline is simply that - an outline. However, today I added an exercise for serious students of business development.

You can download a copy of this franchise manual outline at => Interview Tip: Have A Sense of Urgency
Having a sense of urgency is the best way to manage your job search.Timing is everything and this certainly applies when searching for a job.Sitting back and waiting for a job to land in your lap is not going to happen. You can’t afford to wait for things to happen because chances are that once you start applying for jobs, you’ll be waiting for the company to respond.When you are waiting for a response from a company, you are at their mercy because they are working on their schedule at that point.I’ve seen cases where a hiring company I’m working with comes to me looking to hire someone and tells me that they are desperate to find this person and they’d like to hire them as soon as possible. I find them several great candidates that I send them...…then they tell me that lors - with parlors all over the planet!

First, you'd need to design and build your model business - your franchise prototype.

Your model would define the pattern for all your shoeshine parlors to follow. It would specify the services, the color scheme, the logo, the way your business treats customers, everything - what to say, what to do, and how to do it.

You would write all this stuff down in Operations Manuals so you could duplicate the business over and over.

You could then sell your franchise - your turn-key shoeshine parlor business - to others who want to own a business but don't want to build it from the ground up.

My point is this. Your model parlor defines how all the other parlors must work to provide consistent quality, service, value, etc.

All successful franchises use the "model" concept, whether they call it that or not. That's why your order of a Big Mac, chocolate shake, and fries is exactly the same in Toronto, Toledo, Topeka, or Timbuktu.

NOTE: The same idea applies to a single facility business.

If all your business processes are documented, a single business (big or small) can provide consistent quality, service, value, etc.

If all your business processes are documented, your business can provide the customer extraordinary results using ordinary people.

You don't need to hire prima donnas!

It doesn't matter if your business is a small sandwich shop, or a giant computer chip maker like Intel.

My company, Senior Management Services, has more than 13,000 pages in its Operations Manuals that define all the business processes.

These Operations Manuals are "living documents" that we update as times and markets change.

If I hire a new accountant, that person receives applicable sections of the Operations Manual that show the business processes necessary to do the accounting successfully.

Since the work is documented, I don't need to hire an accounting "expert."

4. Are you stuck with "tribal knowledge?"

If you have not documented your business model and business processes, your business operates on "tribal knowledge," which means your employees transmit business processes (technology) by word-of-mouth, from person to person.

Tribal knowledge means that as an employee you must know the right guy - and he must be willing to tell you how to do the job. (Good Luck!)

Why?

Some people keep the technology of their position secret, calling it "job security." Ultimately, this method will keep your company stuck.

Your company will be built around personalities, instead of a working business model.

You should not give someone a promotion or raise until they document their job. If they can't be replaced, they're not promotable. And you should document this policy in your Operations Manuals.

Long answer to a short question...

5. Help with a franchise manual.

Like "business model," there's no specific definition for a "franchise manual." I have created a 7-page outline that emphasizes organizational strategy for division of labor.

This same organizational strategy could be used for a single-facility business.

I use a "franchise" model because franchises have a 90+% SUCCESS rate, while typical startups have a 90+% FAILURE rate.

My outline is simply that - an outline. However, today I added an exercise for serious students of business development.

You can download a copy of this franchise manual outline at => How To Grow Your Online Business
Have you recently started a home based business, and are finding it hard to build it up to the level you expect it to be at? If this sounds like you then let me be the first to lend you a helping hand, and teach you a few good tactics you can use to help grow your online business day by day.Growing your business one person at a time will take awhile, and it will take some effort and work on your part. However there are a few things you can do to speed this time consuming process up a good amount, and that mainly has to do with using the correct advertising.One of the best ways I find that will help you grow your business very fast is by making your self available to speak with. A lot of people do not really like to talk in e-mails; they would rather speak with a real live perso, service, value, etc.

If all your business processes are documented, your business can provide the customer extraordinary results using ordinary people.

You don't need to hire prima donnas!

It doesn't matter if your business is a small sandwich shop, or a giant computer chip maker like Intel.

My company, Senior Management Services, has more than 13,000 pages in its Operations Manuals that define all the business processes.

These Operations Manuals are "living documents" that we update as times and markets change.

If I hire a new accountant, that person receives applicable sections of the Operations Manual that show the business processes necessary to do the accounting successfully.

Since the work is documented, I don't need to hire an accounting "expert."

4. Are you stuck with "tribal knowledge?"

If you have not documented your business model and business processes, your business operates on "tribal knowledge," which means your employees transmit business processes (technology) by word-of-mouth, from person to person.

Tribal knowledge means that as an employee you must know the right guy - and he must be willing to tell you how to do the job. (Good Luck!)

Why?

Some people keep the technology of their position secret, calling it "job security." Ultimately, this method will keep your company stuck.

Your company will be built around personalities, instead of a working business model.

You should not give someone a promotion or raise until they document their job. If they can't be replaced, they're not promotable. And you should document this policy in your Operations Manuals.

Long answer to a short question...

5. Help with a franchise manual.

Like "business model," there's no specific definition for a "franchise manual." I have created a 7-page outline that emphasizes organizational strategy for division of labor.

This same organizational strategy could be used for a single-facility business.

I use a "franchise" model because franchises have a 90+% SUCCESS rate, while typical startups have a 90+% FAILURE rate.

My outline is simply that - an outline. However, today I added an exercise for serious students of business development.

You can download a copy of this franchise manual outline at => Intelligent Electronic Medical Billing and SOAP Notes Software Requirements
Doctors and therapists must produce clinical documentation in ever increasing volumes and detail to ensure best healthcare, get medical claims paid in full and on time, and protect the practice from post-payment audits and unfair litigation.But visit documentation speed conflicts with documentation accuracy and thoroughness. For insurance companies, patient visit documentation must be precise and comprehensive. If the quality of documentation is high, the medical billing appeals on unpaid claims are paid faster and at a higher rate. Otherwise, appeals are denied and the practice becomes vulnerable to post-payment audits, refunds, and penalties.Insurance companies do not care how long does it take to produce good documentation. But for provider, slow documentation impedes practice profitao tell you how to do the job. (Good Luck!)

Why?

Some people keep the technology of their position secret, calling it "job security." Ultimately, this method will keep your company stuck.

Your company will be built around personalities, instead of a working business model.

You should not give someone a promotion or raise until they document their job. If they can't be replaced, they're not promotable. And you should document this policy in your Operations Manuals.

Long answer to a short question...

5. Help with a franchise manual.

Like "business model," there's no specific definition for a "franchise manual." I have created a 7-page outline that emphasizes organizational strategy for division of labor.

This same organizational strategy could be used for a single-facility business.

I use a "franchise" model because franchises have a 90+% SUCCESS rate, while typical startups have a 90+% FAILURE rate.

My outline is simply that - an outline. However, today I added an exercise for serious students of business development.

You can download a copy of this franchise manual outline at => http://www.SeniorManagementServices.com/1Bronze/franchise-manual-outline.PDF

Please email your comments to =>http://www.SeniorManagementServices.com

(c) 2006 Mike Hayden, All rights reserved. You may use material from the Profitable Venture Tactics eZine in whole or in part, as long as you include complete attribution, including live website links and email link.

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