SlideShare una empresa de Scribd logo
1 de 117
Descargar para leer sin conexión
1
Business Modeling of offline
businesses in Excel
Practical Guide how to check whether your business makes sense
2
Business modeling is about capturing the logic of the business via
main KPIs and modeling this in Excel.
# transactions
Average
revenue per
transaction
Total revenue
x
% Fee of the
marketplace
Average
transaction value
Total searches % conversion
x
x
Total Costs
Total margin
-
Rent
People
Cost of traffic
Ratio of visitors
to searches
Average cost of 1
visit
+
x
Development
3
SaaS
E-commerce
Media site
2-sided market
User Generated Content
Mobile Applications
Retail
B2C Service
B2B Service
FMCG
SMCG
Commodity
There are 6 offline business models and 6 online models. In
this presentation I will discuss the offline models
4
SaaS
E-commerce Media site2-sided market
UGC
B2B Service
B2C ServiceRetail
Bear in mind that big companies can operate many business
models
5
Retail
B2C Service
B2B Service
FMCG
SMCG
Commodity
I will discuss in details every model and show you how to
model it in Excel.
6
For every model I will discuss 4 different fields
Examples of
companies
Drivers for the
business model
Things that matter in
the business model
Step by step business
modeling
7
Thanks to this presentation you will
learn how model businesses in
Excel and how to draw the right
conclusions
8
This presentation is just a small part of my online course where
you will find also all models in Excel. Below link with great
discount
Click to check my course
Business Modeling of offline
businesses in Excel
$45
$ 0
9
Difference between a
financial model and business
model
10
There are 2 types of models that you will be building
Financial Model Business model
▪ Mainly done for budgeting and valuation ▪ Mainly done managing business, searching
for opportunities
▪ Financial models look very similar ▪ Business models are specific to the company,
the industry and the business model
▪ Used heavily for external purposes: talk with
the Supervisor Board, banks, future investors,
auditors
▪ Used heavily for internal purposes: planning,
looking for opportunities, analyzing
performance
▪ Generates financial statements: P&L, BS, CF
▪ Is driven by many KPIs and quantitative
elements. Shows in-depth relation between
KPIs
▪ Has some KPIs and quantitative elements
11
Retail business model
12
Introduction to retailer
business model
13
Retail sounds very simple. You have to get the right stock in
front of the right customers at the right moment
14
Yet there are some issues that simple make it difficult in
execution
You have many
segments of
customers
Their come with
different
missions
Product Range is
huge
Demand is very
erratic /
seasonal
Your supply
chain is very
complex
15
Let’s have a look at the example of a home improvement /DIY
store
You have many
segments of
customers
Their come with
different
missions
Product Range is
huge
Demand is very
erratic /
seasonal
Your supply
chain is very
complex
▪ Regular people
that do
renovation
infrequently
▪ Fans of
renovation you
are constantly
doing something
▪ B2B customers
▪ Building new
house
▪ Preparing the
apartment to
move in
▪ Renovation
▪ Small
improvements
▪ Small refill
purchases
▪ 60 K SKUs regular
▪ 15 K SKUs
seasonal
▪ Peaks in the
Spring and
summer
▪ Low season in
winter
▪ You have local
suppliers of
heavy things (i.e.
bricks),
▪ National
suppliers
▪ Foreign regional
suppliers (i.e.
European)
▪ Asian suppliers
(especially China)
16
Let’s have a look at another example of a kids’ ware retail
chain
You have many
segments of
customers
Their come with
different
missions
Product Range is
huge
Demand is very
erratic /
seasonal
Your supply
chain is very
complex
▪ Parents
▪ Non-parents
▪ Pre-born
purchase
▪ Regular
purchases
▪ Gifting
▪ Education and
Development
▪ 40 K SKUs regular
▪ 10 K SKUs
seasonal
▪ Short life of SKUs
– Toys last in
most cases up to
1 year; Fashion –
6 months
▪ Peaks in the
Christmas and
around special
gifting days
▪ Low season in
Summer and
after Christmas
▪ Regional brand
suppliers
▪ Asian suppliers
(especially China,
India,
Bangladesh)
17
Main challenges in
Retail
18
Let’s have a look at the main challenges in Retail
Margin Management
Stock / Inventory
Management
Multichannel
Strategy
Managing price
across channels
Expansion to new
markets
Saturation of existing
markets
New product
development
Managing customer
experience across
channels
Format evolution
(possible death)
People rotation and
knowledge
management
Disruption esp. from
external forces /
business models
Automation
19
Business model of
Retailer in Excel
20
We start by estimating the total sales of Stores. That depend on
average transaction value (ATV) and the number of transactions
# Transactions
Average Value
Transaction
Total store revenue
x
21
We can estimate the number of transaction using the number of
visits and conversion rate
# Transactions
Average Value
Transaction
Total store revenue
x
# of Visitors % Conversion
x
22
Average Transaction Value depends on the average value of basic
purchase as well as some suggested purchases (i.e. suggested
products)
# Transactions
Average Value
Transaction
Total store revenue
x
Average Value
Transaction of basic
purchase
Average Value
Transaction of
additional purchase
# of Visitors % Conversion
+
x
23
If we have the % Gross margin we can use it to estimate the total
gross margin generated by stores
# Transactions
Average Value
Transaction
Total store revenue
x
Average Value
Transaction of basic
purchase
Average Value
Transaction of
additional purchase
# of Visitors % Conversion
+
x
% Gross Margin
Gross Margin generated
by the store
x
24
The last piece is getting the fixed costs (esp. rent and people
# Transactions
Average Value
Transaction
Total store revenue Total store costs
x
Store EBITDA
Average Value
Transaction of basic
purchase
Average Value
Transaction of
additional purchase
# of Visitors % Conversion
Rent
People
+
x
Others
+
% Gross Margin
Gross Margin generated
by the store
x -
25
We can also show what drives rent and salaries costs
# Transactions
Average Value
Transaction
Total store revenue Total store costs
x
Store EBITDA
Average Value
Transaction of basic
purchase
Average Value
Transaction of
additional purchase
# of Visitors % Conversion
Rent
People
# of People
Average wages
+
x
x
Others
+
# of sq. m
Fee per sq. m x
% Gross Margin
Gross Margin generated
by the store
x -
26
To see how to build the model in Excel go to my on-line course.
Below link with great discount
Click to check my course
Business Modeling of offline
businesses in Excel
$45
$ 0
27
Introduction to e-commerce
28
In e-commerce you will have 3 types of players depending on
their presence in off-line and their approach to both channels
E-commerce
Pure players
Off-line players with
separate on-line presence
Multichannel /Omni
players
29
Customer behaviors has huge impact on the business model and
on what the e-commerce should concentrate on
▪ Less than 40% of the buyers will buy this year
▪ Focus is on customer acquisition
▪ Loyalty program are not good investment
▪ 70% of e-commerce businesses are in this model
Acquisition
mode
Description of the business model Examples
▪ E-commerce selling only 1 type of Slow Moving
Consumer Goods (SMCG) bought infrequently i.e.
vacuum cleaner, scuba diving, furniture
▪ E-commerce for 1-time in the life event: strollers,
▪ 40%-60% of the buyers will buy this year
▪ You have a nice mix of new and returning customers
▪ Focus is on customer acquisition as well increasing the
value of the customer (increased frequency and
increased purchase per visit)
Hybrid mode
▪ E-commerce that sells SMCG with relatively big
frequency of purchase(1.0-2.5 times a year ) i.e.
shoes (Zappos)
▪ More than 60% of the buyers will buy this year
▪ Focus is on increasing the value of the customer
(increased frequency and increased purchase per visit)
▪ 10% of businesses are in this modelLoyalty mode
▪ Very strong brands with high frequency of
purchase (i.e. Zara, Amazon)
▪ Marketplaces i.e. Udemy, Uber
Source: Lean Analytics: Use Data to Build a Better Startup Faster; A. Croll, B. Yoskovitz
30
Just to remind you some examples of well known e-commerce
businesses
Products sold On-line / Off-line situation
▪ Virtually everything esp.
books, toys, fashion
Mode
▪ Pure on-line player ▪ Loyalty mode
▪ Fashion ▪ Multichannel player ▪ Loyalty mode
▪ Tickets for events ▪ Pure on-line player ▪ Acquisition mode
▪ Groceries ▪ Multichannel player ▪ Hybrid mode
▪ Razors and cosmetics
for men
▪ Pure on-line player ▪ Loyalty mode
▪ Fashion ▪ Pure on-line player ▪ Hybrid mode
31
VISIT
PAID DIRECT SEARCH
To understand the logic of e-commerce business model have a look at the
visualization of how it works
RECO ENGINENAVIGATION
BOUNCED
NOT INTERESTED
ABANDONED
UNSATISFIED
ONE-TIME BUYER UNSOCIAL BUYERCALL TO ACTION
OPEN RATE
SEARCH
CART
ADDITIONS
CONVERSION
LOGISTICS, DELAYS
VIRALRETURNING
CAC PageRank
Bounce rate
Sharing rate
Abandonment,
conversion rates
Ratings, delivery issues
Signups
Mail/RSS/TwitterReturning rate
Customer Lifetime Value Transaction size
Emphasis on repurchase rate,
frequency, click-through rate,
lifetime value
Emphasis on
maximizing cart
value, minimizing
acquisition costs
DELIVERY
SHARINGENROLLMENT
Source: Lean Analytics: Use Data to Build a Better Startup Faster; A. Croll, B. Yoskovitz
32
There are some KPIs for e-commerce model that you have to follow…
▪ Percentage of visitors that buy products
▪ Should be calculated by sources of traffic
▪ Use funnel analysis to get to the stage / factor that kills
your conversion rate
Conversion rates
Definition Why it is important?
▪ Shows you whether you have good selection of
products, how good is the customer experience,
pricing.
▪ Average value of purchases done by a single customer
during a single transaction
▪ Should be calculated by groups of customersAverage
shopping cart
size / Average
transaction
value (ATV)
▪ Shows you how much a customer spends during
one visit to your site
▪ Look also at the number of items in the basket
▪ Compare the average transaction to the average
which should be if you were doing proper cross
selling and sales of complementary products
▪ % of people who abandon their basket – stop the
purchase although they had intent
Abandonment
rate
▪ Tells you that there is some sort of friction at the
very end of the process – customers despite the
intent does not buy
▪ High abandonment rate can be caused by: too
complicated procedure of buying, hidden costs
that are shown at last moment, shipping costs,
limited payment methods (you do not have some
method very popular in a given country) etc.
33
There are some KPIs for e-commerce model that you have to follow…
Definition Why it is important?
▪ Total margin generated by customer from start to end
of his relation with you
▪ LTV=Average transaction*% Gross Margin* Number of
transaction during the relation with the customer
▪ Analyze it by cohorts / segments
Life Time Value
of the Customer
(LTV)
▪ Shows you how much your customer is worth
from cradle to grave
▪ Helps you take decisions on acquisition
techniques
▪ % of traffic generated by your efforts to create brand,
understand and connect with the customer (incl.
loyalty program), SEO, affiliate programs
▪ Measure it by methods / sources of traffic
% traffic
generated by
non-ad methods
▪ Tells you how much traffic you are able to create
regardless of advertisements
▪ Average cost of acquiring a customer
▪ Should be calculated by methods of acquisition
▪ Should be calculated by groups of customersCustomer
Acquisition Cost
(CAC)
▪ Tells you how much you have to spend to acquire
a new customer
▪ Helps you estimate your CF burned with scaling of
the business
▪ Helps you optimize acquisition methods and
select the right source of traffic
▪ Number of purchases done by unique customer per
year with you
▪ Compare it to the average ideal number of purchases
▪ Should be calculated by groups of customers
Number of
purchases per
visitors per year
▪ Helps you understand how important you are to
the customer, how much do you weight in his
basket of purchases of this category
▪ Helps you estimate the potential to grow with
your current customers
34
There are some operational KPIs for e-commerce model that you
have to follow…
Definition Why it is important?
▪ % of goods return by customers due to not matching
their expectation
▪ Extremely important for pure players
Return rate
▪ Shows you how many customers where not
pleased with the products and what is the
operational burden of the customer promise not
met
▪ Average additional sales generated for multichannel
players by customers who ordered on-line but pick up
the product at the store
▪ Extremely important for multichannel players
Average
additional sales
for click and
collet
▪ Multichannel player to stay competitive should
generate additional sales during the visit of
customer picking up the goods at the store.
▪ Small value shows future problems in competing
with pure players
▪ % of click and collect orders in orders generated on the
web
▪ Extremely important for multichannel players
% click and
collect orders
▪ Shows you how willing the customers are to visit
your off-line shop to collect the product and thus
to experience the brand promise represented by
the shop
▪ Small value shows future problems in competing
with pure players
35
Have a look a the typical values of KPIs for the e-commerce
▪ Most sites will have
2-3%
▪ For some very niche
sales this should be
much higher (>15-
20%)
Conversion
rates
Values which are ok Best practice values
▪ For sites with strong blog you should
exclude the traffic for the blog to get the
right picture
Average
transaction
Abandonment
rate
Return rate
Comments
▪ General sites – 10-
15% (Amazon,
Tickets.com, eBay)
▪ Niche sites – up to
40 %
▪ Depends very `much
on industry
▪ In multichannel you
should see 50%
bigger ATV for on-
line than for off-line
▪ Look at ways in which you can improve it:
cross-selling, complementary sales,
playing with shipping costs (with lower or
subsidize above some threshold people
ten to buy more), up-selling,
▪ In multichannel you
should see up to
400% bigger ATV for
on-line than for off-
line
▪ < 50% ▪ Analyze it by reasons of abandonment and
solve them as soon as possible
▪ 10-25%
▪ 10-25% ▪ Depends heavily on the industry – the
more customizable, dependent on
customer features product is the higher
the return rate will be
▪ 2-5%
36
You should test and find optimal solution for the following key
topics in e-commerce
▪ Due to easiness with which you can establish the e-
commerce business it becomes vital to be able to
attract cheaply / for free loads of traffic
▪ This includes SEO, loyalty, content marketing and
others
Getting a lot of
cheap traffic
Description Goal
▪ More important is to find ways to get free
search, entries from newsletters and social media
than direct entry to the webpage
▪ Pricing is very complicated in the e-commerce due to
existence of aggregators and sites comparing offers.
▪ You have to be on comparable products competitive
and earn on the non-comparables and long tail items,
obscuring comparables, bundles
▪ In a multichannel environment you may have different
prices for the same product bought on-line an off-line
Pricing
▪ You are looking for such pricing policy that
optimizes total margin generated
▪ You have to gather as much information on your
customers and create automated actions build into
your website as well as your other assets (i.e. email list,
blog, YouTube channel)
Understanding
your customer and
automate
marketing
▪ Increase conversion,
▪ Increase AVT
▪ Get more free traffic
▪ Increase purchasing frequency
37
You should test and find optimal solution for the following key
topics in e-commerce
▪ Although it is easier than in physical store to keep wide
range of products you will be not able to satisfy
customer needs only on the basis of your own stock
▪ You have to integrate yourself with other suppliers to
get access to wide range of stock
Managing the
long tail
Description Goal
▪ Depending on your concept and brand you have
to decide what is your target in terms of long tail
products availability and how you meet it (own
stock or 3rd parties)
▪ Maximize gross margin
▪ Minimize stock-outs
▪ Your site – the way it is designed, its features may have
big impact on how you convert traffic into customers
therefore you have to optimize it through series of A/B
testing
▪ This also includes following the trends in the way
customers purchase (i.e. the mobile trend)
Continuous
optimization of
your site
▪ Increase conversion,
▪ Increase AVT
▪ Get more free traffic
▪ Increase purchasing frequency
38
To see how to build the model in Excel go to my on-line course.
You will also get there the model in Excel. Below link with great
discount
Click to check my course
Business Modeling of offline
businesses in Excel
$45
$ 0
39
Business model of e-
commerce in Excel
40
Before we go to Excel let’s talk about the logic we used to
build the e-commerce Excel model
▪ Conversion rate
Visits
# of
transactions
Revenues
Gross
Margin
Net Margin
Operating
Profit
▪ ATV
▪ Cost of traffic
▪ Cost of logistics
▪ Transaction fees
▪ Fixed Costs
▪ % Gross
Margin
41
B2C Services business
model
42
Introduction to B2C
services business model
43
We can be talking about 3 different models here
Services performed at specialized
place no production involved
Services performed at customer
place
Services performed at specialized
place with some production
44
Main challenges in B2C
Services
45
We can be talking about 3 different models here
Services performed at specialized
place no production involved
Services performed at customer
place
Services performed at specialized
place with some production
46
Let’s see what are the main challenges in the 1st type of
services
Services performed at specialized
place no production involved
Services performed at customer
place
Services performed at specialized
place with some production
47
The 1st type of services (hairdressers, beauty shops, repair
garages) have to face the following challenges
Location
Minimizing and
Managing Fixed Costs
Optimizing Capex
Seasonality of
Demand
Upsell and cross-sell
Standardization of
services
Queue ManagementPrice Discrimination
Capacity
management
People rotation and
knowledge
management
Growing customer
base despite
infrequent purchases
Utilization of people
48
Now let’s move on to 2nd group – services with some
production
Services performed at specialized
place no production involved
Services performed at customer
place
Services performed at specialized
place with some production
49
The 2nd type of services (restaurant chains) have to face the
following challenges
Location
Minimizing and
Managing Fixed Costs
Optimizing Capex
Seasonality of
Demand
Upsell and cross-sell
Standardization of
services
Queue ManagementPrice Discrimination
Capacity
management
People rotation and
knowledge
management
Growing customer
base despite
infrequent purchases
Utilization of people
50
The 3rd group will differ significantly from the first two
Services performed at specialized
place no production involved
Services performed at customer
place
Services performed at specialized
place with some production
51
The 3rd type of services (plumber, electricians) have to face
the following challenges
Location
Minimizing and
Managing Fixed Costs
Optimizing Capex
Seasonality of
Demand
Upsell and cross-sell
Standardization of
services
Queue ManagementPrice Discrimination
Capacity
management
People rotation and
knowledge
management
Growing customer
base despite
infrequent purchases
Utilization of people
52
Introduction to modeling
B2C services in Excel
53
In the next lecture I will show you the main drivers of the B2C model
and on the basis of this we will create a business model in Excel
# transactions
Average
revenue per
transaction
Total revenue
x
% Fee of the
marketplace
Average
transaction value
Total searches % conversion
x
x
Total Costs
Total margin
-
Rent
People
Cost of traffic
Ratio of visitors
to searches
Average cost of 1
visit
+
x
Development
54
To show you how to model B2C service we will use the example of a
restaurant
Services performed at specialized
place no production involved
Services performed at customer
place
Services performed at specialized
place with some production
55
Restaurant model in Excel
56
When you want to set up a restaurant you have to not only
face the monthly recurring costs but also invest a huge
amount of money into the place
57
Have a look what you will spend your money on long before
opening of the restaurant
Purchase of the place
Furniture
Design
Kitchen equipemt
Domestic
Appliances
Computer, cash
till, POS
Uniforms for
employees
58
There are plenty of monthly costs that have to be paid every
month
Food and
drinksUtilities (water,
electricity, gas, waste)
Stock
Rental of the place
Services i.e.
book-keeping
Cleaning costs
Personel
59
Remember that apart from current costs you usually froze a
lot of cash in the stock
60
Let’s have a look at the simple model
▪ Number of meals per
day
▪ Number of days
Restaurant
# of
transactions
Revenues
Gross
Margin
Net Margin
Operating
Profit
▪ ATV - average
▪ Cost of marketing
▪ Franchising Fee
▪ Other Variable costs
▪ Fixed Costs
▪ % Gross
Margin
▪ % Food
ratio
61
In the part about the using store checks for location analysis
we were
Passing by
Engaged / stopping
Leaving
Taking away
In store
62
Before we go to Excel let’s talk about the logic we used to
build the e-commerce Excel model
▪ Conversion rate to
consumption at the
restaurant
▪ Conversion rate into
takeaways
Visits
# of
transactions
Revenues
Gross
Margin
Net Margin
Operating
Profit
▪ ATV for both
subgroups
▪ Cost of marketing
▪ Franchising Fee
▪ Other Variable costs
▪ Fixed Costs
▪ % Gross
Margin
▪ % Food
ratio
63
To see how to build the model in Excel go to my on-line course.
You will also get there the model in Excel. Below link with great
discount
Click to check my course
Business Modeling of offline
businesses in Excel
$45
$ 0
64
KPIs for restaurants
65
There are some important KPIs you should pay attention to
Daily Capacity
% utilization
% of Take-Aways
Average
Transaction
Value (ATV)
% of Ordered
via on-demand
marketplaces
# of daily
customers
% of Loyal
Customers
% Conversion
rate
% Gross Margin
Inventory in
days of sales
Sales Density Margin Density
66
B2B Services business
model
67
Introduction to B2B
services business model
68
Due to margins and integration with you we can divide the
B2B services into 3 groups
Professional service Other external servicesOutsourcing of your process
▪ Lawyer
▪ Auditors
▪ Consultants
▪ Marketers
▪ Production Process
▪ Maintenance Process
▪ Book keeping and reporting
▪ Shared Service Canters run by
external companies
▪ Logistics
▪ IT
▪ Measuring
69
Main challenges in B2B
Services
70
Let’s have a look at the main challenges in B2B services
Utilization of people
People rotation and
knowledge
management
Upsell and cross-sell
Seasonality of
Demand
Optimizing Capex
and Opex
Automation
Standardization of
services
Price Discrimination
Capacity
management
Productization of
services
Growing new
businesses using
customer base
Minimizing and
Managing Fixed Costs
71
Introduction to service
companies
72
Service companies in general are all about converting your
workers time into money
Man-hours
73
There are some general rules that you should follow
Measure man-hours
Measure tasks
Stay productive and
efficient
Make sure supply matches
demand
Forecast and create
demand
Manage supply ahead of
time
Make sure that margins are
OK
74
Introduction to modeling
B2B services in Excel
75
To show you the business modelling in Excel I will use the
consulting business model as an example
Professional service Other external servicesOutsourcing of your process
76
The typical model of a service model can be presented using
this logic
▪ % Utilization# hours
available
# of billable
hours
Revenues
Gross
Margin
Operational
Profit
Net Profit
▪ Hourly fee
▪ HQ costs
▪ Bonuses
▪ Interest
▪ % Gross
Margin
▪ Wages
77
To see how to build the model in Excel go to my on-line course.
You will also get there the model in Excel. Below link with great
discount
Click to check my course
Business Modeling of offline
businesses in Excel
$45
$ 0
78
FMCG Business Model
79
Introduction to FMCG
Business Model
80
We can be talking about 2 different models here
Branded FMCG with strong brand
awareness
Private labels
Private
label
81
Main challenges in
FMCG
82
For branded FMCG product I propose to have a look at the
following aspects
Brand Awareness
Reach (Weighted and
numeric distribution)
Your strategy across
many channels
Managing price
across channels
Leveraging the brand
Spreading beyond
original target group
Product lifecycle
Managing customer
experience across
channels
Efficiency of
marketing activities
Lifecycle of your
target groups
Seasonality
83
Introduction to modeling
FMCG in Excel
84
In the modeling phase I will concentrate on branded FMCG
products. The model will be created for cosmetics
Branded FMCG with strong brand
awareness
Private labels
Private
label
85
In the next lecture I will show you the main drivers of the FMCG
model and on the basis of this we will create a business model in
Excel
# transactions
Average
revenue per
transaction
Total revenue
x
% Fee of the
marketplace
Average
transaction value
Total searches % conversion
x
x
Total Costs
Total margin
-
Rent
People
Cost of traffic
Ratio of visitors
to searches
Average cost of 1
visit
+
x
Development
86
Drivers of FMCG Model
87
The FMCG business model is driven by some basic KPIs
# sold
Unit production
cost
Gross Margin Head office
Operational profit
Fixed Cost /
Quantity produced
Unit variable cost
+
Cost of sales &
marketing
Net Margin
-
-
Average price
Unit Gross Margin
-
x
Market share Market size
88
To see how to build the model in Excel go to my on-line course.
You will also get there the model in Excel. Below link with great
discount
Click to check my course
Business Modeling of offline
businesses in Excel
$45
$ 0
89
FMCG business model –
modeling in Excel
90
Let’s go through basic assumptions of the model
FMCG product MarketingSales Channels
▪ Cosmetics – 1 product
▪ 1 production site
▪ Traditional small stores
▪ Retail chain
▪ TV ads
▪ Market research
▪ Social Media
▪ Mailing
▪ Loyalty program
▪ Outdoor campaigns
91
Commodity Business Model
92
Introduction to Commodity
Business Model
93
The commodity is one of the most difficult business. You have a non-
differentiated product and the price pressure is destroying the
margins
94
The commodities are characterized by some important things
Very low margins
Usually high Capex
Cyclical demand connected
with GDP growth
Natural tendency to
consolidate
Mature industries
Low growth
Transparency
Educated buyers esp. in
B2B
95
Main challenges in
Commodity Business Model
96
Let’s have a look at the main challenges in Commodities
Operational
Excellence
Market Structure –
oligopoly or
monopoly
Cyclicity of demand
Capacity
Management
Catchment analyses
(supplier, customer)
Creating barriers of
entry
Product
differentiation
Reaching strong
buyer position
Turning the product
into service
Investments enabling
the demand for your
product
Changing economics
of facilities - lower
Capex
Vertical integration
esp. downstream
97
Drivers of Commodity Model
98
The commodity business model is driven by some basic KPIs
# sold
Unit production
cost
Gross Margin Head office
Operational profit
Fixed Cost /
Quantity produced
Unit variable cost
+
Cost of sales &
marketing
Net Margin
-
-
Average price
Unit Gross Margin
-
x
Customer
catchment area
Supplier
Catchment
Area
99
To see how to build the model in Excel go to my on-line course.
You will also get there the model in Excel. Below link with great
discount
Click to check my course
Business Modeling of offline
businesses in Excel
$45
$ 0
100
Check also business modeling of online businesses in Excel
Business models
Practical guide for startups and entrepreneurs
presentation
101
You can also find useful some tips on analyzing Retail
Retail for Business Analysts and
Management Consultants
A practical guide
presentation
102
You can also find useful some tips on Excel
Essential Excel for Business
Analysts and Consultants
A practical guide
presentation
103
Check my presentation other presentations
Essential Lean Manufacturing for
Management Consultants
Practical guide how to cut costs
presentation
104
Check my presentation that will help you get into consulting
How to get into consulting
Practical guide how to pass the case part
presentation
105
I recommend also looking at some techniques to improve
your business. Click on the cover below to go to the
presentation
How to become world class
analyst
A practical guide
presentation
106
Check also my other presentations
Management Consulting
Presentations
Practical guide how to prepare a great presentation
presentation
107
Check also my other presentations
Production for Management
Consultants
Practical guide
presentation
108
Subscribe to our channels:
www
109
….and how to perform market research
Market research
Practical guide for startups and entrepreneurs
presentation
110
Check my presentation on starting and running consulting
company
How to create management
consulting presentations?
A practical guide
presentation
111
Check my extensive presentation on productivity hacks to see
how you can me 10x more productive
Management consultant
productivity hacks
How to be lazy and still get things done
presentation
112
If you need more detailed version on productivity hacks you
can check our course on productivity hacks
Click to check my course
Management Consulting
Productivity Hacks
$45
$15
113
Check my presentation on restaurant business model to
understand it properly
How to open a successful
restaurant
A practical guide
presentation
114
Check my presentation on on-line models to understand
them properly
On-line Business Models
A practical guide
presentation
115
For more check also my on-line course
Click to check my course
On-line Business Models in Excel –
Practical Guide
$45
$15
116
Check my presentation on starting and running consulting
company
Start and run consulting
company
A practical guide
presentation
117
There is an interesting summary of ways to test cheaply
businesses
MVP – how to test your business
idea without building the
product
A practical guide
presentation

Más contenido relacionado

La actualidad más candente

Examples of business analyses in Excel - from consulting projects
Examples of business analyses in Excel - from consulting projectsExamples of business analyses in Excel - from consulting projects
Examples of business analyses in Excel - from consulting projectsAsen Gyczew
 
Distribution / Logistics for Management Consultants
Distribution / Logistics for Management ConsultantsDistribution / Logistics for Management Consultants
Distribution / Logistics for Management ConsultantsAsen Gyczew
 
How to conduct market research in startups and small firms?
How to conduct market research  in startups and small firms?How to conduct market research  in startups and small firms?
How to conduct market research in startups and small firms?Asen Gyczew
 
Top 10 courses for every management consultant
Top 10 courses for every management consultantTop 10 courses for every management consultant
Top 10 courses for every management consultantAsen Gyczew
 
Production Planning for Management Consultants & Business Analysts
Production Planning for Management Consultants & Business AnalystsProduction Planning for Management Consultants & Business Analysts
Production Planning for Management Consultants & Business AnalystsAsen Gyczew
 
How to optimize processes in practice during consulting projects
How to optimize processes in practice during consulting projectsHow to optimize processes in practice during consulting projects
How to optimize processes in practice during consulting projectsAsen Gyczew
 
Strategy for Management Consultants & Business Analysts
Strategy for Management Consultants & Business AnalystsStrategy for Management Consultants & Business Analysts
Strategy for Management Consultants & Business AnalystsAsen Gyczew
 
Segmentation Methods for Management Consultants & Business Analysts
Segmentation Methods for Management Consultants & Business AnalystsSegmentation Methods for Management Consultants & Business Analysts
Segmentation Methods for Management Consultants & Business AnalystsAsen Gyczew
 
Overview of business models used in on-line
Overview of business models used in on-lineOverview of business models used in on-line
Overview of business models used in on-lineAsen Gyczew
 
How to get into management consulting
How to get into management consultingHow to get into management consulting
How to get into management consultingAsen Gyczew
 
M&A done by Amazon and Disney
M&A done by Amazon and DisneyM&A done by Amazon and Disney
M&A done by Amazon and DisneyAsen Gyczew
 
Effective Meetings for Management Consultants & Analysts
Effective Meetings for Management Consultants & AnalystsEffective Meetings for Management Consultants & Analysts
Effective Meetings for Management Consultants & AnalystsAsen Gyczew
 
How to start and run consulting firm fast and efficiently
How to start and run consulting firm fast and efficientlyHow to start and run consulting firm fast and efficiently
How to start and run consulting firm fast and efficientlyAsen Gyczew
 
Sales Analysis for Management Consultants and Business Analysts
Sales Analysis for Management Consultants and Business AnalystsSales Analysis for Management Consultants and Business Analysts
Sales Analysis for Management Consultants and Business AnalystsAsen Gyczew
 
Decision Making with Excel for Managers
Decision Making with Excel for ManagersDecision Making with Excel for Managers
Decision Making with Excel for ManagersAsen Gyczew
 
Business Model Innovation for Management Consultants
Business Model Innovation for Management ConsultantsBusiness Model Innovation for Management Consultants
Business Model Innovation for Management ConsultantsAsen Gyczew
 
How to manage successfully a Consulting Project
How to manage successfully a Consulting ProjectHow to manage successfully a Consulting Project
How to manage successfully a Consulting ProjectAsen Gyczew
 
Retail for Business Analysts and Management Consultants
Retail for Business Analysts and Management ConsultantsRetail for Business Analysts and Management Consultants
Retail for Business Analysts and Management ConsultantsAsen Gyczew
 
Essential Finance & Accounting for Management Consultants and Business Analysts
Essential Finance & Accounting for Management Consultants and Business AnalystsEssential Finance & Accounting for Management Consultants and Business Analysts
Essential Finance & Accounting for Management Consultants and Business AnalystsAsen Gyczew
 
What exactly does a consultant at McKinsey do?
What exactly does a consultant at McKinsey do?What exactly does a consultant at McKinsey do?
What exactly does a consultant at McKinsey do?Asen Gyczew
 

La actualidad más candente (20)

Examples of business analyses in Excel - from consulting projects
Examples of business analyses in Excel - from consulting projectsExamples of business analyses in Excel - from consulting projects
Examples of business analyses in Excel - from consulting projects
 
Distribution / Logistics for Management Consultants
Distribution / Logistics for Management ConsultantsDistribution / Logistics for Management Consultants
Distribution / Logistics for Management Consultants
 
How to conduct market research in startups and small firms?
How to conduct market research  in startups and small firms?How to conduct market research  in startups and small firms?
How to conduct market research in startups and small firms?
 
Top 10 courses for every management consultant
Top 10 courses for every management consultantTop 10 courses for every management consultant
Top 10 courses for every management consultant
 
Production Planning for Management Consultants & Business Analysts
Production Planning for Management Consultants & Business AnalystsProduction Planning for Management Consultants & Business Analysts
Production Planning for Management Consultants & Business Analysts
 
How to optimize processes in practice during consulting projects
How to optimize processes in practice during consulting projectsHow to optimize processes in practice during consulting projects
How to optimize processes in practice during consulting projects
 
Strategy for Management Consultants & Business Analysts
Strategy for Management Consultants & Business AnalystsStrategy for Management Consultants & Business Analysts
Strategy for Management Consultants & Business Analysts
 
Segmentation Methods for Management Consultants & Business Analysts
Segmentation Methods for Management Consultants & Business AnalystsSegmentation Methods for Management Consultants & Business Analysts
Segmentation Methods for Management Consultants & Business Analysts
 
Overview of business models used in on-line
Overview of business models used in on-lineOverview of business models used in on-line
Overview of business models used in on-line
 
How to get into management consulting
How to get into management consultingHow to get into management consulting
How to get into management consulting
 
M&A done by Amazon and Disney
M&A done by Amazon and DisneyM&A done by Amazon and Disney
M&A done by Amazon and Disney
 
Effective Meetings for Management Consultants & Analysts
Effective Meetings for Management Consultants & AnalystsEffective Meetings for Management Consultants & Analysts
Effective Meetings for Management Consultants & Analysts
 
How to start and run consulting firm fast and efficiently
How to start and run consulting firm fast and efficientlyHow to start and run consulting firm fast and efficiently
How to start and run consulting firm fast and efficiently
 
Sales Analysis for Management Consultants and Business Analysts
Sales Analysis for Management Consultants and Business AnalystsSales Analysis for Management Consultants and Business Analysts
Sales Analysis for Management Consultants and Business Analysts
 
Decision Making with Excel for Managers
Decision Making with Excel for ManagersDecision Making with Excel for Managers
Decision Making with Excel for Managers
 
Business Model Innovation for Management Consultants
Business Model Innovation for Management ConsultantsBusiness Model Innovation for Management Consultants
Business Model Innovation for Management Consultants
 
How to manage successfully a Consulting Project
How to manage successfully a Consulting ProjectHow to manage successfully a Consulting Project
How to manage successfully a Consulting Project
 
Retail for Business Analysts and Management Consultants
Retail for Business Analysts and Management ConsultantsRetail for Business Analysts and Management Consultants
Retail for Business Analysts and Management Consultants
 
Essential Finance & Accounting for Management Consultants and Business Analysts
Essential Finance & Accounting for Management Consultants and Business AnalystsEssential Finance & Accounting for Management Consultants and Business Analysts
Essential Finance & Accounting for Management Consultants and Business Analysts
 
What exactly does a consultant at McKinsey do?
What exactly does a consultant at McKinsey do?What exactly does a consultant at McKinsey do?
What exactly does a consultant at McKinsey do?
 

Destacado

Financial modeling in Excel for Business Analysts and Consultants
Financial modeling in Excel for Business Analysts and ConsultantsFinancial modeling in Excel for Business Analysts and Consultants
Financial modeling in Excel for Business Analysts and ConsultantsAsen Gyczew
 
Jak dojść do właściwego modelu zarabiania?
Jak dojść do właściwego modelu zarabiania?Jak dojść do właściwego modelu zarabiania?
Jak dojść do właściwego modelu zarabiania?Asen Gyczew
 
2012 saas free trial, freemium, pricing benchmark
2012 saas free trial, freemium, pricing benchmark2012 saas free trial, freemium, pricing benchmark
2012 saas free trial, freemium, pricing benchmarkTotango
 
Badania rynku i konkurencji praktyczny poradnik
Badania rynku i konkurencji praktyczny poradnikBadania rynku i konkurencji praktyczny poradnik
Badania rynku i konkurencji praktyczny poradnikAsen Gyczew
 
Car for hire business case Uber - Business Model Canvas
Car for hire business case Uber - Business Model CanvasCar for hire business case Uber - Business Model Canvas
Car for hire business case Uber - Business Model CanvasJukka Ala-Mutka, Dr Sc.
 
How to create a management consulting presentation
How to create a management consulting presentationHow to create a management consulting presentation
How to create a management consulting presentationAsen Gyczew
 
Lean manufacturing for Management Consultants and Business Analysts
Lean manufacturing for Management Consultants and Business AnalystsLean manufacturing for Management Consultants and Business Analysts
Lean manufacturing for Management Consultants and Business AnalystsAsen Gyczew
 

Destacado (9)

Financial modeling in Excel for Business Analysts and Consultants
Financial modeling in Excel for Business Analysts and ConsultantsFinancial modeling in Excel for Business Analysts and Consultants
Financial modeling in Excel for Business Analysts and Consultants
 
Jak dojść do właściwego modelu zarabiania?
Jak dojść do właściwego modelu zarabiania?Jak dojść do właściwego modelu zarabiania?
Jak dojść do właściwego modelu zarabiania?
 
Yelp
YelpYelp
Yelp
 
2012 saas free trial, freemium, pricing benchmark
2012 saas free trial, freemium, pricing benchmark2012 saas free trial, freemium, pricing benchmark
2012 saas free trial, freemium, pricing benchmark
 
Badania rynku i konkurencji praktyczny poradnik
Badania rynku i konkurencji praktyczny poradnikBadania rynku i konkurencji praktyczny poradnik
Badania rynku i konkurencji praktyczny poradnik
 
Car for hire business case Uber - Business Model Canvas
Car for hire business case Uber - Business Model CanvasCar for hire business case Uber - Business Model Canvas
Car for hire business case Uber - Business Model Canvas
 
How to create a management consulting presentation
How to create a management consulting presentationHow to create a management consulting presentation
How to create a management consulting presentation
 
Lean manufacturing for Management Consultants and Business Analysts
Lean manufacturing for Management Consultants and Business AnalystsLean manufacturing for Management Consultants and Business Analysts
Lean manufacturing for Management Consultants and Business Analysts
 
Front series A deck
Front series A deckFront series A deck
Front series A deck
 

Similar a Business Modeling of offline businesses in Excel

Financial Modeling for startups
Financial Modeling for startupsFinancial Modeling for startups
Financial Modeling for startupsAsen Gyczew
 
5 examples of business / financial models in Excel
5 examples of business / financial models in Excel5 examples of business / financial models in Excel
5 examples of business / financial models in ExcelAsen Gyczew
 
How to create a successful marketplace
How to create a successful marketplaceHow to create a successful marketplace
How to create a successful marketplaceAsen Gyczew
 
FMCG for Management Consultants and Business Analysts
FMCG for Management Consultants and Business AnalystsFMCG for Management Consultants and Business Analysts
FMCG for Management Consultants and Business AnalystsAsen Gyczew
 
The power of simulating buying flows
The power of simulating buying flowsThe power of simulating buying flows
The power of simulating buying flowsBAQMaR
 
Museum Stores: Managing Ecommerce for Profitability
Museum Stores: Managing Ecommerce for ProfitabilityMuseum Stores: Managing Ecommerce for Profitability
Museum Stores: Managing Ecommerce for ProfitabilityJanice Yablonski-Hickey
 
Is Omnichannel Dead? Evolving Tactics for Today's Retail
Is Omnichannel Dead? Evolving Tactics for Today's RetailIs Omnichannel Dead? Evolving Tactics for Today's Retail
Is Omnichannel Dead? Evolving Tactics for Today's RetailSmartFocusWorld
 
eShopBuilders - Business Plan Sample
eShopBuilders - Business Plan SampleeShopBuilders - Business Plan Sample
eShopBuilders - Business Plan SampleManish K. Jha
 
How to Double Online Revenues
How to Double Online RevenuesHow to Double Online Revenues
How to Double Online RevenuesMelih ÖZCANLI
 
Investment Overview of European Marketplaces
Investment Overview of European MarketplacesInvestment Overview of European Marketplaces
Investment Overview of European MarketplacesCharlotte Brook
 
„ShopMonitor“ - new dimension of e-commerce Web Analytics / Marek Molicki
„ShopMonitor“ - new dimension of e-commerce Web Analytics / Marek Molicki„ShopMonitor“ - new dimension of e-commerce Web Analytics / Marek Molicki
„ShopMonitor“ - new dimension of e-commerce Web Analytics / Marek MolickiVladas Sapranavicius
 
Case study on small e commerce
Case study on small e commerceCase study on small e commerce
Case study on small e commerceAmit Raj
 
Leeds Online Seller Meetup
Leeds Online Seller MeetupLeeds Online Seller Meetup
Leeds Online Seller MeetupDaytodayebay
 
Starting with your financial plan
Starting with your financial planStarting with your financial plan
Starting with your financial planAzèle Mathieu
 
Web Analytics (Digital Marketing '15 @ Oulu University)
Web Analytics (Digital Marketing '15 @ Oulu University)Web Analytics (Digital Marketing '15 @ Oulu University)
Web Analytics (Digital Marketing '15 @ Oulu University)Joni Salminen
 
Elad goldenberg: How to Develop your eCommerce Strategy
Elad goldenberg:  How to Develop your eCommerce StrategyElad goldenberg:  How to Develop your eCommerce Strategy
Elad goldenberg: How to Develop your eCommerce StrategyElad Goldenberg
 

Similar a Business Modeling of offline businesses in Excel (20)

Financial Modeling for startups
Financial Modeling for startupsFinancial Modeling for startups
Financial Modeling for startups
 
5 examples of business / financial models in Excel
5 examples of business / financial models in Excel5 examples of business / financial models in Excel
5 examples of business / financial models in Excel
 
How to create a successful marketplace
How to create a successful marketplaceHow to create a successful marketplace
How to create a successful marketplace
 
FMCG for Management Consultants and Business Analysts
FMCG for Management Consultants and Business AnalystsFMCG for Management Consultants and Business Analysts
FMCG for Management Consultants and Business Analysts
 
The power of simulating buying flows
The power of simulating buying flowsThe power of simulating buying flows
The power of simulating buying flows
 
Museum Stores: Managing Ecommerce for Profitability
Museum Stores: Managing Ecommerce for ProfitabilityMuseum Stores: Managing Ecommerce for Profitability
Museum Stores: Managing Ecommerce for Profitability
 
Is Omnichannel Dead? Evolving Tactics for Today's Retail
Is Omnichannel Dead? Evolving Tactics for Today's RetailIs Omnichannel Dead? Evolving Tactics for Today's Retail
Is Omnichannel Dead? Evolving Tactics for Today's Retail
 
eShopBuilders - Business Plan Sample
eShopBuilders - Business Plan SampleeShopBuilders - Business Plan Sample
eShopBuilders - Business Plan Sample
 
How to Double Online Revenues
How to Double Online RevenuesHow to Double Online Revenues
How to Double Online Revenues
 
Investment Overview of European Marketplaces
Investment Overview of European MarketplacesInvestment Overview of European Marketplaces
Investment Overview of European Marketplaces
 
„ShopMonitor“ - new dimension of e-commerce Web Analytics / Marek Molicki
„ShopMonitor“ - new dimension of e-commerce Web Analytics / Marek Molicki„ShopMonitor“ - new dimension of e-commerce Web Analytics / Marek Molicki
„ShopMonitor“ - new dimension of e-commerce Web Analytics / Marek Molicki
 
Case study on small e commerce
Case study on small e commerceCase study on small e commerce
Case study on small e commerce
 
Turn Your Website Into Your Best Performing Sales Channel - Jan Barthelemy, L...
Turn Your Website Into Your Best Performing Sales Channel - Jan Barthelemy, L...Turn Your Website Into Your Best Performing Sales Channel - Jan Barthelemy, L...
Turn Your Website Into Your Best Performing Sales Channel - Jan Barthelemy, L...
 
E commerce
E commerce E commerce
E commerce
 
Conferecia Instituto de Empresa pricing
Conferecia Instituto de Empresa pricing Conferecia Instituto de Empresa pricing
Conferecia Instituto de Empresa pricing
 
Leeds Online Seller Meetup
Leeds Online Seller MeetupLeeds Online Seller Meetup
Leeds Online Seller Meetup
 
Starting with your financial plan
Starting with your financial planStarting with your financial plan
Starting with your financial plan
 
Web Analytics (Digital Marketing '15 @ Oulu University)
Web Analytics (Digital Marketing '15 @ Oulu University)Web Analytics (Digital Marketing '15 @ Oulu University)
Web Analytics (Digital Marketing '15 @ Oulu University)
 
Chp03 Patterns
Chp03 PatternsChp03 Patterns
Chp03 Patterns
 
Elad goldenberg: How to Develop your eCommerce Strategy
Elad goldenberg:  How to Develop your eCommerce StrategyElad goldenberg:  How to Develop your eCommerce Strategy
Elad goldenberg: How to Develop your eCommerce Strategy
 

Más de Asen Gyczew

Funnel Analysis for Management Consultants & Business Analysts
Funnel Analysis for Management Consultants & Business AnalystsFunnel Analysis for Management Consultants & Business Analysts
Funnel Analysis for Management Consultants & Business AnalystsAsen Gyczew
 
Data Visualization for Management Consultants & Analyst
Data Visualization for Management Consultants & AnalystData Visualization for Management Consultants & Analyst
Data Visualization for Management Consultants & AnalystAsen Gyczew
 
How to delegate work efficiently - a practical guide for Management Consult...
How to delegate work efficiently   - a practical guide for Management Consult...How to delegate work efficiently   - a practical guide for Management Consult...
How to delegate work efficiently - a practical guide for Management Consult...Asen Gyczew
 
Essential Real Estate Modeling in Excel
Essential Real Estate Modeling in ExcelEssential Real Estate Modeling in Excel
Essential Real Estate Modeling in ExcelAsen Gyczew
 
Sales Forecasting for Management Consultants & Business Analysts
Sales Forecasting for Management Consultants & Business AnalystsSales Forecasting for Management Consultants & Business Analysts
Sales Forecasting for Management Consultants & Business AnalystsAsen Gyczew
 
M&A for Management Consultants & Business Analysts
M&A for Management Consultants & Business AnalystsM&A for Management Consultants & Business Analysts
M&A for Management Consultants & Business AnalystsAsen Gyczew
 
Project Management Office (PMO) for Management Consultants
Project Management Office (PMO) for Management ConsultantsProject Management Office (PMO) for Management Consultants
Project Management Office (PMO) for Management ConsultantsAsen Gyczew
 
Financial Analysis for Management Consultants & Analysts
Financial Analysis for Management Consultants & AnalystsFinancial Analysis for Management Consultants & Analysts
Financial Analysis for Management Consultants & AnalystsAsen Gyczew
 
Liquidity Management for Management Consultants & Managers
Liquidity Management for Management Consultants & ManagersLiquidity Management for Management Consultants & Managers
Liquidity Management for Management Consultants & ManagersAsen Gyczew
 
Cost Reduction for Management Consultants & Managers
Cost Reduction for Management Consultants & ManagersCost Reduction for Management Consultants & Managers
Cost Reduction for Management Consultants & ManagersAsen Gyczew
 
Personal Finance using Management Consulting Hacks
Personal Finance using Management Consulting HacksPersonal Finance using Management Consulting Hacks
Personal Finance using Management Consulting HacksAsen Gyczew
 
How to change your business during the recession caused by corona virus
How to change your business during the recession caused by corona virusHow to change your business during the recession caused by corona virus
How to change your business during the recession caused by corona virusAsen Gyczew
 
How to train Management Consultants & Business Analysts
How to train Management Consultants & Business AnalystsHow to train Management Consultants & Business Analysts
How to train Management Consultants & Business AnalystsAsen Gyczew
 
Management Consulting Approach to Problem Solving
Management Consulting Approach to Problem SolvingManagement Consulting Approach to Problem Solving
Management Consulting Approach to Problem SolvingAsen Gyczew
 
Performance Improvement Project for Management Consultants
Performance Improvement Project for Management ConsultantsPerformance Improvement Project for Management Consultants
Performance Improvement Project for Management ConsultantsAsen Gyczew
 
KPIs and metrics for Management Consultants and Managers
KPIs and metrics for Management Consultants and ManagersKPIs and metrics for Management Consultants and Managers
KPIs and metrics for Management Consultants and ManagersAsen Gyczew
 
SMCG for Management Consultants and Business Analysts
SMCG for Management Consultants and Business AnalystsSMCG for Management Consultants and Business Analysts
SMCG for Management Consultants and Business AnalystsAsen Gyczew
 

Más de Asen Gyczew (17)

Funnel Analysis for Management Consultants & Business Analysts
Funnel Analysis for Management Consultants & Business AnalystsFunnel Analysis for Management Consultants & Business Analysts
Funnel Analysis for Management Consultants & Business Analysts
 
Data Visualization for Management Consultants & Analyst
Data Visualization for Management Consultants & AnalystData Visualization for Management Consultants & Analyst
Data Visualization for Management Consultants & Analyst
 
How to delegate work efficiently - a practical guide for Management Consult...
How to delegate work efficiently   - a practical guide for Management Consult...How to delegate work efficiently   - a practical guide for Management Consult...
How to delegate work efficiently - a practical guide for Management Consult...
 
Essential Real Estate Modeling in Excel
Essential Real Estate Modeling in ExcelEssential Real Estate Modeling in Excel
Essential Real Estate Modeling in Excel
 
Sales Forecasting for Management Consultants & Business Analysts
Sales Forecasting for Management Consultants & Business AnalystsSales Forecasting for Management Consultants & Business Analysts
Sales Forecasting for Management Consultants & Business Analysts
 
M&A for Management Consultants & Business Analysts
M&A for Management Consultants & Business AnalystsM&A for Management Consultants & Business Analysts
M&A for Management Consultants & Business Analysts
 
Project Management Office (PMO) for Management Consultants
Project Management Office (PMO) for Management ConsultantsProject Management Office (PMO) for Management Consultants
Project Management Office (PMO) for Management Consultants
 
Financial Analysis for Management Consultants & Analysts
Financial Analysis for Management Consultants & AnalystsFinancial Analysis for Management Consultants & Analysts
Financial Analysis for Management Consultants & Analysts
 
Liquidity Management for Management Consultants & Managers
Liquidity Management for Management Consultants & ManagersLiquidity Management for Management Consultants & Managers
Liquidity Management for Management Consultants & Managers
 
Cost Reduction for Management Consultants & Managers
Cost Reduction for Management Consultants & ManagersCost Reduction for Management Consultants & Managers
Cost Reduction for Management Consultants & Managers
 
Personal Finance using Management Consulting Hacks
Personal Finance using Management Consulting HacksPersonal Finance using Management Consulting Hacks
Personal Finance using Management Consulting Hacks
 
How to change your business during the recession caused by corona virus
How to change your business during the recession caused by corona virusHow to change your business during the recession caused by corona virus
How to change your business during the recession caused by corona virus
 
How to train Management Consultants & Business Analysts
How to train Management Consultants & Business AnalystsHow to train Management Consultants & Business Analysts
How to train Management Consultants & Business Analysts
 
Management Consulting Approach to Problem Solving
Management Consulting Approach to Problem SolvingManagement Consulting Approach to Problem Solving
Management Consulting Approach to Problem Solving
 
Performance Improvement Project for Management Consultants
Performance Improvement Project for Management ConsultantsPerformance Improvement Project for Management Consultants
Performance Improvement Project for Management Consultants
 
KPIs and metrics for Management Consultants and Managers
KPIs and metrics for Management Consultants and ManagersKPIs and metrics for Management Consultants and Managers
KPIs and metrics for Management Consultants and Managers
 
SMCG for Management Consultants and Business Analysts
SMCG for Management Consultants and Business AnalystsSMCG for Management Consultants and Business Analysts
SMCG for Management Consultants and Business Analysts
 

Último

Welding Electrode Making Machine By Deccan Dynamics
Welding Electrode Making Machine By Deccan DynamicsWelding Electrode Making Machine By Deccan Dynamics
Welding Electrode Making Machine By Deccan DynamicsIndiaMART InterMESH Limited
 
MAHA Global and IPR: Do Actions Speak Louder Than Words?
MAHA Global and IPR: Do Actions Speak Louder Than Words?MAHA Global and IPR: Do Actions Speak Louder Than Words?
MAHA Global and IPR: Do Actions Speak Louder Than Words?Olivia Kresic
 
Driving Business Impact for PMs with Jon Harmer
Driving Business Impact for PMs with Jon HarmerDriving Business Impact for PMs with Jon Harmer
Driving Business Impact for PMs with Jon HarmerAggregage
 
Introducing the Analogic framework for business planning applications
Introducing the Analogic framework for business planning applicationsIntroducing the Analogic framework for business planning applications
Introducing the Analogic framework for business planning applicationsKnowledgeSeed
 
Guide Complete Set of Residential Architectural Drawings PDF
Guide Complete Set of Residential Architectural Drawings PDFGuide Complete Set of Residential Architectural Drawings PDF
Guide Complete Set of Residential Architectural Drawings PDFChandresh Chudasama
 
Go for Rakhi Bazaar and Pick the Latest Bhaiya Bhabhi Rakhi.pptx
Go for Rakhi Bazaar and Pick the Latest Bhaiya Bhabhi Rakhi.pptxGo for Rakhi Bazaar and Pick the Latest Bhaiya Bhabhi Rakhi.pptx
Go for Rakhi Bazaar and Pick the Latest Bhaiya Bhabhi Rakhi.pptxRakhi Bazaar
 
Fordham -How effective decision-making is within the IT department - Analysis...
Fordham -How effective decision-making is within the IT department - Analysis...Fordham -How effective decision-making is within the IT department - Analysis...
Fordham -How effective decision-making is within the IT department - Analysis...Peter Ward
 
Church Building Grants To Assist With New Construction, Additions, And Restor...
Church Building Grants To Assist With New Construction, Additions, And Restor...Church Building Grants To Assist With New Construction, Additions, And Restor...
Church Building Grants To Assist With New Construction, Additions, And Restor...Americas Got Grants
 
The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of th...
The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of th...The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of th...
The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of th...Operational Excellence Consulting
 
Healthcare Feb. & Mar. Healthcare Newsletter
Healthcare Feb. & Mar. Healthcare NewsletterHealthcare Feb. & Mar. Healthcare Newsletter
Healthcare Feb. & Mar. Healthcare NewsletterJamesConcepcion7
 
business environment micro environment macro environment.pptx
business environment micro environment macro environment.pptxbusiness environment micro environment macro environment.pptx
business environment micro environment macro environment.pptxShruti Mittal
 
1911 Gold Corporate Presentation Apr 2024.pdf
1911 Gold Corporate Presentation Apr 2024.pdf1911 Gold Corporate Presentation Apr 2024.pdf
1911 Gold Corporate Presentation Apr 2024.pdfShaun Heinrichs
 
Darshan Hiranandani [News About Next CEO].pdf
Darshan Hiranandani [News About Next CEO].pdfDarshan Hiranandani [News About Next CEO].pdf
Darshan Hiranandani [News About Next CEO].pdfShashank Mehta
 
Unveiling the Soundscape Music for Psychedelic Experiences
Unveiling the Soundscape Music for Psychedelic ExperiencesUnveiling the Soundscape Music for Psychedelic Experiences
Unveiling the Soundscape Music for Psychedelic ExperiencesDoe Paoro
 
Pitch Deck Teardown: Xpanceo's $40M Seed deck
Pitch Deck Teardown: Xpanceo's $40M Seed deckPitch Deck Teardown: Xpanceo's $40M Seed deck
Pitch Deck Teardown: Xpanceo's $40M Seed deckHajeJanKamps
 
Ten Organizational Design Models to align structure and operations to busines...
Ten Organizational Design Models to align structure and operations to busines...Ten Organizational Design Models to align structure and operations to busines...
Ten Organizational Design Models to align structure and operations to busines...Seta Wicaksana
 
Memorándum de Entendimiento (MoU) entre Codelco y SQM
Memorándum de Entendimiento (MoU) entre Codelco y SQMMemorándum de Entendimiento (MoU) entre Codelco y SQM
Memorándum de Entendimiento (MoU) entre Codelco y SQMVoces Mineras
 
Investment in The Coconut Industry by Nancy Cheruiyot
Investment in The Coconut Industry by Nancy CheruiyotInvestment in The Coconut Industry by Nancy Cheruiyot
Investment in The Coconut Industry by Nancy Cheruiyotictsugar
 
How To Simplify Your Scheduling with AI Calendarfly The Hassle-Free Online Bo...
How To Simplify Your Scheduling with AI Calendarfly The Hassle-Free Online Bo...How To Simplify Your Scheduling with AI Calendarfly The Hassle-Free Online Bo...
How To Simplify Your Scheduling with AI Calendarfly The Hassle-Free Online Bo...SOFTTECHHUB
 

Último (20)

Welding Electrode Making Machine By Deccan Dynamics
Welding Electrode Making Machine By Deccan DynamicsWelding Electrode Making Machine By Deccan Dynamics
Welding Electrode Making Machine By Deccan Dynamics
 
MAHA Global and IPR: Do Actions Speak Louder Than Words?
MAHA Global and IPR: Do Actions Speak Louder Than Words?MAHA Global and IPR: Do Actions Speak Louder Than Words?
MAHA Global and IPR: Do Actions Speak Louder Than Words?
 
Driving Business Impact for PMs with Jon Harmer
Driving Business Impact for PMs with Jon HarmerDriving Business Impact for PMs with Jon Harmer
Driving Business Impact for PMs with Jon Harmer
 
Introducing the Analogic framework for business planning applications
Introducing the Analogic framework for business planning applicationsIntroducing the Analogic framework for business planning applications
Introducing the Analogic framework for business planning applications
 
The Bizz Quiz-E-Summit-E-Cell-IITPatna.pptx
The Bizz Quiz-E-Summit-E-Cell-IITPatna.pptxThe Bizz Quiz-E-Summit-E-Cell-IITPatna.pptx
The Bizz Quiz-E-Summit-E-Cell-IITPatna.pptx
 
Guide Complete Set of Residential Architectural Drawings PDF
Guide Complete Set of Residential Architectural Drawings PDFGuide Complete Set of Residential Architectural Drawings PDF
Guide Complete Set of Residential Architectural Drawings PDF
 
Go for Rakhi Bazaar and Pick the Latest Bhaiya Bhabhi Rakhi.pptx
Go for Rakhi Bazaar and Pick the Latest Bhaiya Bhabhi Rakhi.pptxGo for Rakhi Bazaar and Pick the Latest Bhaiya Bhabhi Rakhi.pptx
Go for Rakhi Bazaar and Pick the Latest Bhaiya Bhabhi Rakhi.pptx
 
Fordham -How effective decision-making is within the IT department - Analysis...
Fordham -How effective decision-making is within the IT department - Analysis...Fordham -How effective decision-making is within the IT department - Analysis...
Fordham -How effective decision-making is within the IT department - Analysis...
 
Church Building Grants To Assist With New Construction, Additions, And Restor...
Church Building Grants To Assist With New Construction, Additions, And Restor...Church Building Grants To Assist With New Construction, Additions, And Restor...
Church Building Grants To Assist With New Construction, Additions, And Restor...
 
The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of th...
The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of th...The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of th...
The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of th...
 
Healthcare Feb. & Mar. Healthcare Newsletter
Healthcare Feb. & Mar. Healthcare NewsletterHealthcare Feb. & Mar. Healthcare Newsletter
Healthcare Feb. & Mar. Healthcare Newsletter
 
business environment micro environment macro environment.pptx
business environment micro environment macro environment.pptxbusiness environment micro environment macro environment.pptx
business environment micro environment macro environment.pptx
 
1911 Gold Corporate Presentation Apr 2024.pdf
1911 Gold Corporate Presentation Apr 2024.pdf1911 Gold Corporate Presentation Apr 2024.pdf
1911 Gold Corporate Presentation Apr 2024.pdf
 
Darshan Hiranandani [News About Next CEO].pdf
Darshan Hiranandani [News About Next CEO].pdfDarshan Hiranandani [News About Next CEO].pdf
Darshan Hiranandani [News About Next CEO].pdf
 
Unveiling the Soundscape Music for Psychedelic Experiences
Unveiling the Soundscape Music for Psychedelic ExperiencesUnveiling the Soundscape Music for Psychedelic Experiences
Unveiling the Soundscape Music for Psychedelic Experiences
 
Pitch Deck Teardown: Xpanceo's $40M Seed deck
Pitch Deck Teardown: Xpanceo's $40M Seed deckPitch Deck Teardown: Xpanceo's $40M Seed deck
Pitch Deck Teardown: Xpanceo's $40M Seed deck
 
Ten Organizational Design Models to align structure and operations to busines...
Ten Organizational Design Models to align structure and operations to busines...Ten Organizational Design Models to align structure and operations to busines...
Ten Organizational Design Models to align structure and operations to busines...
 
Memorándum de Entendimiento (MoU) entre Codelco y SQM
Memorándum de Entendimiento (MoU) entre Codelco y SQMMemorándum de Entendimiento (MoU) entre Codelco y SQM
Memorándum de Entendimiento (MoU) entre Codelco y SQM
 
Investment in The Coconut Industry by Nancy Cheruiyot
Investment in The Coconut Industry by Nancy CheruiyotInvestment in The Coconut Industry by Nancy Cheruiyot
Investment in The Coconut Industry by Nancy Cheruiyot
 
How To Simplify Your Scheduling with AI Calendarfly The Hassle-Free Online Bo...
How To Simplify Your Scheduling with AI Calendarfly The Hassle-Free Online Bo...How To Simplify Your Scheduling with AI Calendarfly The Hassle-Free Online Bo...
How To Simplify Your Scheduling with AI Calendarfly The Hassle-Free Online Bo...
 

Business Modeling of offline businesses in Excel

  • 1. 1 Business Modeling of offline businesses in Excel Practical Guide how to check whether your business makes sense
  • 2. 2 Business modeling is about capturing the logic of the business via main KPIs and modeling this in Excel. # transactions Average revenue per transaction Total revenue x % Fee of the marketplace Average transaction value Total searches % conversion x x Total Costs Total margin - Rent People Cost of traffic Ratio of visitors to searches Average cost of 1 visit + x Development
  • 3. 3 SaaS E-commerce Media site 2-sided market User Generated Content Mobile Applications Retail B2C Service B2B Service FMCG SMCG Commodity There are 6 offline business models and 6 online models. In this presentation I will discuss the offline models
  • 4. 4 SaaS E-commerce Media site2-sided market UGC B2B Service B2C ServiceRetail Bear in mind that big companies can operate many business models
  • 5. 5 Retail B2C Service B2B Service FMCG SMCG Commodity I will discuss in details every model and show you how to model it in Excel.
  • 6. 6 For every model I will discuss 4 different fields Examples of companies Drivers for the business model Things that matter in the business model Step by step business modeling
  • 7. 7 Thanks to this presentation you will learn how model businesses in Excel and how to draw the right conclusions
  • 8. 8 This presentation is just a small part of my online course where you will find also all models in Excel. Below link with great discount Click to check my course Business Modeling of offline businesses in Excel $45 $ 0
  • 9. 9 Difference between a financial model and business model
  • 10. 10 There are 2 types of models that you will be building Financial Model Business model ▪ Mainly done for budgeting and valuation ▪ Mainly done managing business, searching for opportunities ▪ Financial models look very similar ▪ Business models are specific to the company, the industry and the business model ▪ Used heavily for external purposes: talk with the Supervisor Board, banks, future investors, auditors ▪ Used heavily for internal purposes: planning, looking for opportunities, analyzing performance ▪ Generates financial statements: P&L, BS, CF ▪ Is driven by many KPIs and quantitative elements. Shows in-depth relation between KPIs ▪ Has some KPIs and quantitative elements
  • 13. 13 Retail sounds very simple. You have to get the right stock in front of the right customers at the right moment
  • 14. 14 Yet there are some issues that simple make it difficult in execution You have many segments of customers Their come with different missions Product Range is huge Demand is very erratic / seasonal Your supply chain is very complex
  • 15. 15 Let’s have a look at the example of a home improvement /DIY store You have many segments of customers Their come with different missions Product Range is huge Demand is very erratic / seasonal Your supply chain is very complex ▪ Regular people that do renovation infrequently ▪ Fans of renovation you are constantly doing something ▪ B2B customers ▪ Building new house ▪ Preparing the apartment to move in ▪ Renovation ▪ Small improvements ▪ Small refill purchases ▪ 60 K SKUs regular ▪ 15 K SKUs seasonal ▪ Peaks in the Spring and summer ▪ Low season in winter ▪ You have local suppliers of heavy things (i.e. bricks), ▪ National suppliers ▪ Foreign regional suppliers (i.e. European) ▪ Asian suppliers (especially China)
  • 16. 16 Let’s have a look at another example of a kids’ ware retail chain You have many segments of customers Their come with different missions Product Range is huge Demand is very erratic / seasonal Your supply chain is very complex ▪ Parents ▪ Non-parents ▪ Pre-born purchase ▪ Regular purchases ▪ Gifting ▪ Education and Development ▪ 40 K SKUs regular ▪ 10 K SKUs seasonal ▪ Short life of SKUs – Toys last in most cases up to 1 year; Fashion – 6 months ▪ Peaks in the Christmas and around special gifting days ▪ Low season in Summer and after Christmas ▪ Regional brand suppliers ▪ Asian suppliers (especially China, India, Bangladesh)
  • 18. 18 Let’s have a look at the main challenges in Retail Margin Management Stock / Inventory Management Multichannel Strategy Managing price across channels Expansion to new markets Saturation of existing markets New product development Managing customer experience across channels Format evolution (possible death) People rotation and knowledge management Disruption esp. from external forces / business models Automation
  • 20. 20 We start by estimating the total sales of Stores. That depend on average transaction value (ATV) and the number of transactions # Transactions Average Value Transaction Total store revenue x
  • 21. 21 We can estimate the number of transaction using the number of visits and conversion rate # Transactions Average Value Transaction Total store revenue x # of Visitors % Conversion x
  • 22. 22 Average Transaction Value depends on the average value of basic purchase as well as some suggested purchases (i.e. suggested products) # Transactions Average Value Transaction Total store revenue x Average Value Transaction of basic purchase Average Value Transaction of additional purchase # of Visitors % Conversion + x
  • 23. 23 If we have the % Gross margin we can use it to estimate the total gross margin generated by stores # Transactions Average Value Transaction Total store revenue x Average Value Transaction of basic purchase Average Value Transaction of additional purchase # of Visitors % Conversion + x % Gross Margin Gross Margin generated by the store x
  • 24. 24 The last piece is getting the fixed costs (esp. rent and people # Transactions Average Value Transaction Total store revenue Total store costs x Store EBITDA Average Value Transaction of basic purchase Average Value Transaction of additional purchase # of Visitors % Conversion Rent People + x Others + % Gross Margin Gross Margin generated by the store x -
  • 25. 25 We can also show what drives rent and salaries costs # Transactions Average Value Transaction Total store revenue Total store costs x Store EBITDA Average Value Transaction of basic purchase Average Value Transaction of additional purchase # of Visitors % Conversion Rent People # of People Average wages + x x Others + # of sq. m Fee per sq. m x % Gross Margin Gross Margin generated by the store x -
  • 26. 26 To see how to build the model in Excel go to my on-line course. Below link with great discount Click to check my course Business Modeling of offline businesses in Excel $45 $ 0
  • 28. 28 In e-commerce you will have 3 types of players depending on their presence in off-line and their approach to both channels E-commerce Pure players Off-line players with separate on-line presence Multichannel /Omni players
  • 29. 29 Customer behaviors has huge impact on the business model and on what the e-commerce should concentrate on ▪ Less than 40% of the buyers will buy this year ▪ Focus is on customer acquisition ▪ Loyalty program are not good investment ▪ 70% of e-commerce businesses are in this model Acquisition mode Description of the business model Examples ▪ E-commerce selling only 1 type of Slow Moving Consumer Goods (SMCG) bought infrequently i.e. vacuum cleaner, scuba diving, furniture ▪ E-commerce for 1-time in the life event: strollers, ▪ 40%-60% of the buyers will buy this year ▪ You have a nice mix of new and returning customers ▪ Focus is on customer acquisition as well increasing the value of the customer (increased frequency and increased purchase per visit) Hybrid mode ▪ E-commerce that sells SMCG with relatively big frequency of purchase(1.0-2.5 times a year ) i.e. shoes (Zappos) ▪ More than 60% of the buyers will buy this year ▪ Focus is on increasing the value of the customer (increased frequency and increased purchase per visit) ▪ 10% of businesses are in this modelLoyalty mode ▪ Very strong brands with high frequency of purchase (i.e. Zara, Amazon) ▪ Marketplaces i.e. Udemy, Uber Source: Lean Analytics: Use Data to Build a Better Startup Faster; A. Croll, B. Yoskovitz
  • 30. 30 Just to remind you some examples of well known e-commerce businesses Products sold On-line / Off-line situation ▪ Virtually everything esp. books, toys, fashion Mode ▪ Pure on-line player ▪ Loyalty mode ▪ Fashion ▪ Multichannel player ▪ Loyalty mode ▪ Tickets for events ▪ Pure on-line player ▪ Acquisition mode ▪ Groceries ▪ Multichannel player ▪ Hybrid mode ▪ Razors and cosmetics for men ▪ Pure on-line player ▪ Loyalty mode ▪ Fashion ▪ Pure on-line player ▪ Hybrid mode
  • 31. 31 VISIT PAID DIRECT SEARCH To understand the logic of e-commerce business model have a look at the visualization of how it works RECO ENGINENAVIGATION BOUNCED NOT INTERESTED ABANDONED UNSATISFIED ONE-TIME BUYER UNSOCIAL BUYERCALL TO ACTION OPEN RATE SEARCH CART ADDITIONS CONVERSION LOGISTICS, DELAYS VIRALRETURNING CAC PageRank Bounce rate Sharing rate Abandonment, conversion rates Ratings, delivery issues Signups Mail/RSS/TwitterReturning rate Customer Lifetime Value Transaction size Emphasis on repurchase rate, frequency, click-through rate, lifetime value Emphasis on maximizing cart value, minimizing acquisition costs DELIVERY SHARINGENROLLMENT Source: Lean Analytics: Use Data to Build a Better Startup Faster; A. Croll, B. Yoskovitz
  • 32. 32 There are some KPIs for e-commerce model that you have to follow… ▪ Percentage of visitors that buy products ▪ Should be calculated by sources of traffic ▪ Use funnel analysis to get to the stage / factor that kills your conversion rate Conversion rates Definition Why it is important? ▪ Shows you whether you have good selection of products, how good is the customer experience, pricing. ▪ Average value of purchases done by a single customer during a single transaction ▪ Should be calculated by groups of customersAverage shopping cart size / Average transaction value (ATV) ▪ Shows you how much a customer spends during one visit to your site ▪ Look also at the number of items in the basket ▪ Compare the average transaction to the average which should be if you were doing proper cross selling and sales of complementary products ▪ % of people who abandon their basket – stop the purchase although they had intent Abandonment rate ▪ Tells you that there is some sort of friction at the very end of the process – customers despite the intent does not buy ▪ High abandonment rate can be caused by: too complicated procedure of buying, hidden costs that are shown at last moment, shipping costs, limited payment methods (you do not have some method very popular in a given country) etc.
  • 33. 33 There are some KPIs for e-commerce model that you have to follow… Definition Why it is important? ▪ Total margin generated by customer from start to end of his relation with you ▪ LTV=Average transaction*% Gross Margin* Number of transaction during the relation with the customer ▪ Analyze it by cohorts / segments Life Time Value of the Customer (LTV) ▪ Shows you how much your customer is worth from cradle to grave ▪ Helps you take decisions on acquisition techniques ▪ % of traffic generated by your efforts to create brand, understand and connect with the customer (incl. loyalty program), SEO, affiliate programs ▪ Measure it by methods / sources of traffic % traffic generated by non-ad methods ▪ Tells you how much traffic you are able to create regardless of advertisements ▪ Average cost of acquiring a customer ▪ Should be calculated by methods of acquisition ▪ Should be calculated by groups of customersCustomer Acquisition Cost (CAC) ▪ Tells you how much you have to spend to acquire a new customer ▪ Helps you estimate your CF burned with scaling of the business ▪ Helps you optimize acquisition methods and select the right source of traffic ▪ Number of purchases done by unique customer per year with you ▪ Compare it to the average ideal number of purchases ▪ Should be calculated by groups of customers Number of purchases per visitors per year ▪ Helps you understand how important you are to the customer, how much do you weight in his basket of purchases of this category ▪ Helps you estimate the potential to grow with your current customers
  • 34. 34 There are some operational KPIs for e-commerce model that you have to follow… Definition Why it is important? ▪ % of goods return by customers due to not matching their expectation ▪ Extremely important for pure players Return rate ▪ Shows you how many customers where not pleased with the products and what is the operational burden of the customer promise not met ▪ Average additional sales generated for multichannel players by customers who ordered on-line but pick up the product at the store ▪ Extremely important for multichannel players Average additional sales for click and collet ▪ Multichannel player to stay competitive should generate additional sales during the visit of customer picking up the goods at the store. ▪ Small value shows future problems in competing with pure players ▪ % of click and collect orders in orders generated on the web ▪ Extremely important for multichannel players % click and collect orders ▪ Shows you how willing the customers are to visit your off-line shop to collect the product and thus to experience the brand promise represented by the shop ▪ Small value shows future problems in competing with pure players
  • 35. 35 Have a look a the typical values of KPIs for the e-commerce ▪ Most sites will have 2-3% ▪ For some very niche sales this should be much higher (>15- 20%) Conversion rates Values which are ok Best practice values ▪ For sites with strong blog you should exclude the traffic for the blog to get the right picture Average transaction Abandonment rate Return rate Comments ▪ General sites – 10- 15% (Amazon, Tickets.com, eBay) ▪ Niche sites – up to 40 % ▪ Depends very `much on industry ▪ In multichannel you should see 50% bigger ATV for on- line than for off-line ▪ Look at ways in which you can improve it: cross-selling, complementary sales, playing with shipping costs (with lower or subsidize above some threshold people ten to buy more), up-selling, ▪ In multichannel you should see up to 400% bigger ATV for on-line than for off- line ▪ < 50% ▪ Analyze it by reasons of abandonment and solve them as soon as possible ▪ 10-25% ▪ 10-25% ▪ Depends heavily on the industry – the more customizable, dependent on customer features product is the higher the return rate will be ▪ 2-5%
  • 36. 36 You should test and find optimal solution for the following key topics in e-commerce ▪ Due to easiness with which you can establish the e- commerce business it becomes vital to be able to attract cheaply / for free loads of traffic ▪ This includes SEO, loyalty, content marketing and others Getting a lot of cheap traffic Description Goal ▪ More important is to find ways to get free search, entries from newsletters and social media than direct entry to the webpage ▪ Pricing is very complicated in the e-commerce due to existence of aggregators and sites comparing offers. ▪ You have to be on comparable products competitive and earn on the non-comparables and long tail items, obscuring comparables, bundles ▪ In a multichannel environment you may have different prices for the same product bought on-line an off-line Pricing ▪ You are looking for such pricing policy that optimizes total margin generated ▪ You have to gather as much information on your customers and create automated actions build into your website as well as your other assets (i.e. email list, blog, YouTube channel) Understanding your customer and automate marketing ▪ Increase conversion, ▪ Increase AVT ▪ Get more free traffic ▪ Increase purchasing frequency
  • 37. 37 You should test and find optimal solution for the following key topics in e-commerce ▪ Although it is easier than in physical store to keep wide range of products you will be not able to satisfy customer needs only on the basis of your own stock ▪ You have to integrate yourself with other suppliers to get access to wide range of stock Managing the long tail Description Goal ▪ Depending on your concept and brand you have to decide what is your target in terms of long tail products availability and how you meet it (own stock or 3rd parties) ▪ Maximize gross margin ▪ Minimize stock-outs ▪ Your site – the way it is designed, its features may have big impact on how you convert traffic into customers therefore you have to optimize it through series of A/B testing ▪ This also includes following the trends in the way customers purchase (i.e. the mobile trend) Continuous optimization of your site ▪ Increase conversion, ▪ Increase AVT ▪ Get more free traffic ▪ Increase purchasing frequency
  • 38. 38 To see how to build the model in Excel go to my on-line course. You will also get there the model in Excel. Below link with great discount Click to check my course Business Modeling of offline businesses in Excel $45 $ 0
  • 39. 39 Business model of e- commerce in Excel
  • 40. 40 Before we go to Excel let’s talk about the logic we used to build the e-commerce Excel model ▪ Conversion rate Visits # of transactions Revenues Gross Margin Net Margin Operating Profit ▪ ATV ▪ Cost of traffic ▪ Cost of logistics ▪ Transaction fees ▪ Fixed Costs ▪ % Gross Margin
  • 43. 43 We can be talking about 3 different models here Services performed at specialized place no production involved Services performed at customer place Services performed at specialized place with some production
  • 44. 44 Main challenges in B2C Services
  • 45. 45 We can be talking about 3 different models here Services performed at specialized place no production involved Services performed at customer place Services performed at specialized place with some production
  • 46. 46 Let’s see what are the main challenges in the 1st type of services Services performed at specialized place no production involved Services performed at customer place Services performed at specialized place with some production
  • 47. 47 The 1st type of services (hairdressers, beauty shops, repair garages) have to face the following challenges Location Minimizing and Managing Fixed Costs Optimizing Capex Seasonality of Demand Upsell and cross-sell Standardization of services Queue ManagementPrice Discrimination Capacity management People rotation and knowledge management Growing customer base despite infrequent purchases Utilization of people
  • 48. 48 Now let’s move on to 2nd group – services with some production Services performed at specialized place no production involved Services performed at customer place Services performed at specialized place with some production
  • 49. 49 The 2nd type of services (restaurant chains) have to face the following challenges Location Minimizing and Managing Fixed Costs Optimizing Capex Seasonality of Demand Upsell and cross-sell Standardization of services Queue ManagementPrice Discrimination Capacity management People rotation and knowledge management Growing customer base despite infrequent purchases Utilization of people
  • 50. 50 The 3rd group will differ significantly from the first two Services performed at specialized place no production involved Services performed at customer place Services performed at specialized place with some production
  • 51. 51 The 3rd type of services (plumber, electricians) have to face the following challenges Location Minimizing and Managing Fixed Costs Optimizing Capex Seasonality of Demand Upsell and cross-sell Standardization of services Queue ManagementPrice Discrimination Capacity management People rotation and knowledge management Growing customer base despite infrequent purchases Utilization of people
  • 52. 52 Introduction to modeling B2C services in Excel
  • 53. 53 In the next lecture I will show you the main drivers of the B2C model and on the basis of this we will create a business model in Excel # transactions Average revenue per transaction Total revenue x % Fee of the marketplace Average transaction value Total searches % conversion x x Total Costs Total margin - Rent People Cost of traffic Ratio of visitors to searches Average cost of 1 visit + x Development
  • 54. 54 To show you how to model B2C service we will use the example of a restaurant Services performed at specialized place no production involved Services performed at customer place Services performed at specialized place with some production
  • 56. 56 When you want to set up a restaurant you have to not only face the monthly recurring costs but also invest a huge amount of money into the place
  • 57. 57 Have a look what you will spend your money on long before opening of the restaurant Purchase of the place Furniture Design Kitchen equipemt Domestic Appliances Computer, cash till, POS Uniforms for employees
  • 58. 58 There are plenty of monthly costs that have to be paid every month Food and drinksUtilities (water, electricity, gas, waste) Stock Rental of the place Services i.e. book-keeping Cleaning costs Personel
  • 59. 59 Remember that apart from current costs you usually froze a lot of cash in the stock
  • 60. 60 Let’s have a look at the simple model ▪ Number of meals per day ▪ Number of days Restaurant # of transactions Revenues Gross Margin Net Margin Operating Profit ▪ ATV - average ▪ Cost of marketing ▪ Franchising Fee ▪ Other Variable costs ▪ Fixed Costs ▪ % Gross Margin ▪ % Food ratio
  • 61. 61 In the part about the using store checks for location analysis we were Passing by Engaged / stopping Leaving Taking away In store
  • 62. 62 Before we go to Excel let’s talk about the logic we used to build the e-commerce Excel model ▪ Conversion rate to consumption at the restaurant ▪ Conversion rate into takeaways Visits # of transactions Revenues Gross Margin Net Margin Operating Profit ▪ ATV for both subgroups ▪ Cost of marketing ▪ Franchising Fee ▪ Other Variable costs ▪ Fixed Costs ▪ % Gross Margin ▪ % Food ratio
  • 63. 63 To see how to build the model in Excel go to my on-line course. You will also get there the model in Excel. Below link with great discount Click to check my course Business Modeling of offline businesses in Excel $45 $ 0
  • 65. 65 There are some important KPIs you should pay attention to Daily Capacity % utilization % of Take-Aways Average Transaction Value (ATV) % of Ordered via on-demand marketplaces # of daily customers % of Loyal Customers % Conversion rate % Gross Margin Inventory in days of sales Sales Density Margin Density
  • 68. 68 Due to margins and integration with you we can divide the B2B services into 3 groups Professional service Other external servicesOutsourcing of your process ▪ Lawyer ▪ Auditors ▪ Consultants ▪ Marketers ▪ Production Process ▪ Maintenance Process ▪ Book keeping and reporting ▪ Shared Service Canters run by external companies ▪ Logistics ▪ IT ▪ Measuring
  • 69. 69 Main challenges in B2B Services
  • 70. 70 Let’s have a look at the main challenges in B2B services Utilization of people People rotation and knowledge management Upsell and cross-sell Seasonality of Demand Optimizing Capex and Opex Automation Standardization of services Price Discrimination Capacity management Productization of services Growing new businesses using customer base Minimizing and Managing Fixed Costs
  • 72. 72 Service companies in general are all about converting your workers time into money Man-hours
  • 73. 73 There are some general rules that you should follow Measure man-hours Measure tasks Stay productive and efficient Make sure supply matches demand Forecast and create demand Manage supply ahead of time Make sure that margins are OK
  • 74. 74 Introduction to modeling B2B services in Excel
  • 75. 75 To show you the business modelling in Excel I will use the consulting business model as an example Professional service Other external servicesOutsourcing of your process
  • 76. 76 The typical model of a service model can be presented using this logic ▪ % Utilization# hours available # of billable hours Revenues Gross Margin Operational Profit Net Profit ▪ Hourly fee ▪ HQ costs ▪ Bonuses ▪ Interest ▪ % Gross Margin ▪ Wages
  • 77. 77 To see how to build the model in Excel go to my on-line course. You will also get there the model in Excel. Below link with great discount Click to check my course Business Modeling of offline businesses in Excel $45 $ 0
  • 80. 80 We can be talking about 2 different models here Branded FMCG with strong brand awareness Private labels Private label
  • 82. 82 For branded FMCG product I propose to have a look at the following aspects Brand Awareness Reach (Weighted and numeric distribution) Your strategy across many channels Managing price across channels Leveraging the brand Spreading beyond original target group Product lifecycle Managing customer experience across channels Efficiency of marketing activities Lifecycle of your target groups Seasonality
  • 84. 84 In the modeling phase I will concentrate on branded FMCG products. The model will be created for cosmetics Branded FMCG with strong brand awareness Private labels Private label
  • 85. 85 In the next lecture I will show you the main drivers of the FMCG model and on the basis of this we will create a business model in Excel # transactions Average revenue per transaction Total revenue x % Fee of the marketplace Average transaction value Total searches % conversion x x Total Costs Total margin - Rent People Cost of traffic Ratio of visitors to searches Average cost of 1 visit + x Development
  • 87. 87 The FMCG business model is driven by some basic KPIs # sold Unit production cost Gross Margin Head office Operational profit Fixed Cost / Quantity produced Unit variable cost + Cost of sales & marketing Net Margin - - Average price Unit Gross Margin - x Market share Market size
  • 88. 88 To see how to build the model in Excel go to my on-line course. You will also get there the model in Excel. Below link with great discount Click to check my course Business Modeling of offline businesses in Excel $45 $ 0
  • 89. 89 FMCG business model – modeling in Excel
  • 90. 90 Let’s go through basic assumptions of the model FMCG product MarketingSales Channels ▪ Cosmetics – 1 product ▪ 1 production site ▪ Traditional small stores ▪ Retail chain ▪ TV ads ▪ Market research ▪ Social Media ▪ Mailing ▪ Loyalty program ▪ Outdoor campaigns
  • 93. 93 The commodity is one of the most difficult business. You have a non- differentiated product and the price pressure is destroying the margins
  • 94. 94 The commodities are characterized by some important things Very low margins Usually high Capex Cyclical demand connected with GDP growth Natural tendency to consolidate Mature industries Low growth Transparency Educated buyers esp. in B2B
  • 96. 96 Let’s have a look at the main challenges in Commodities Operational Excellence Market Structure – oligopoly or monopoly Cyclicity of demand Capacity Management Catchment analyses (supplier, customer) Creating barriers of entry Product differentiation Reaching strong buyer position Turning the product into service Investments enabling the demand for your product Changing economics of facilities - lower Capex Vertical integration esp. downstream
  • 98. 98 The commodity business model is driven by some basic KPIs # sold Unit production cost Gross Margin Head office Operational profit Fixed Cost / Quantity produced Unit variable cost + Cost of sales & marketing Net Margin - - Average price Unit Gross Margin - x Customer catchment area Supplier Catchment Area
  • 99. 99 To see how to build the model in Excel go to my on-line course. You will also get there the model in Excel. Below link with great discount Click to check my course Business Modeling of offline businesses in Excel $45 $ 0
  • 100. 100 Check also business modeling of online businesses in Excel Business models Practical guide for startups and entrepreneurs presentation
  • 101. 101 You can also find useful some tips on analyzing Retail Retail for Business Analysts and Management Consultants A practical guide presentation
  • 102. 102 You can also find useful some tips on Excel Essential Excel for Business Analysts and Consultants A practical guide presentation
  • 103. 103 Check my presentation other presentations Essential Lean Manufacturing for Management Consultants Practical guide how to cut costs presentation
  • 104. 104 Check my presentation that will help you get into consulting How to get into consulting Practical guide how to pass the case part presentation
  • 105. 105 I recommend also looking at some techniques to improve your business. Click on the cover below to go to the presentation How to become world class analyst A practical guide presentation
  • 106. 106 Check also my other presentations Management Consulting Presentations Practical guide how to prepare a great presentation presentation
  • 107. 107 Check also my other presentations Production for Management Consultants Practical guide presentation
  • 108. 108 Subscribe to our channels: www
  • 109. 109 ….and how to perform market research Market research Practical guide for startups and entrepreneurs presentation
  • 110. 110 Check my presentation on starting and running consulting company How to create management consulting presentations? A practical guide presentation
  • 111. 111 Check my extensive presentation on productivity hacks to see how you can me 10x more productive Management consultant productivity hacks How to be lazy and still get things done presentation
  • 112. 112 If you need more detailed version on productivity hacks you can check our course on productivity hacks Click to check my course Management Consulting Productivity Hacks $45 $15
  • 113. 113 Check my presentation on restaurant business model to understand it properly How to open a successful restaurant A practical guide presentation
  • 114. 114 Check my presentation on on-line models to understand them properly On-line Business Models A practical guide presentation
  • 115. 115 For more check also my on-line course Click to check my course On-line Business Models in Excel – Practical Guide $45 $15
  • 116. 116 Check my presentation on starting and running consulting company Start and run consulting company A practical guide presentation
  • 117. 117 There is an interesting summary of ways to test cheaply businesses MVP – how to test your business idea without building the product A practical guide presentation