As many business owners know and come to realise in this difficult economic environment, it is one thing to have a good business idea and a totally different one to set up a business that is capable of withstanding external and internal shocks.
A properly conceived business model is essential to operate a stable business and maintain the ability to innovate and adapt to changing business conditions.
Business modelling is a dynamic approach, to conceptualising, planning and executing a business idea.
On 5 and 6 October 15 businesses and start-up entrepreneurs in Cayman took advantage of the opportunity to participate in a two–day workshop on business modelling and strategy.
The workshop was co-funded by the Cayman Islands Investment Bureau and the Caribbean Development Bank’s Caribbean Technological Consultancy Services programme.
The first day of the workshop was facilitated by Dr. Dax Basdeo, Executive Director of the CIIB, who focused on how to build a strong business model, how to explain this model through a business plan and developing a strategy.
“We have a lot of people with a vision and great ideas for their business,” said Basdeo, but there is also “a need for strategy as a foundation for the operation of the business.”
On day two of the workshop Kenneth Harvey, Investment Officer with the CTCS programme instructed participants on how to use Excel to design models that will help them plan and operate their business.
The training provided the participants, who all brought their personal laptops with them, with practical advice on how to develop a structured model for their individual business.
The main challenge for most business owners is that they have to develop a blue plan based on business concepts, which takes into consideration the market environment, said Harvey.
This makes it necessary to translate the idea of what a business is about into a series of tools to operate the business, for example with regard to its cash flow or business accounts, he explained.
His key tips for entrepreneurs are to “understand your business” in detail. In this context it is important to “know what you know”, but also “to know what you don’t know and where you can get the assistance you need,” he said.
“Carefully study your business models,” he advised, “and plan properly.” In order to do so, “you need to know your tools.”
To provide business owners with these tools was one of the objectives of the workshop.
Workshop participants learned specifically how to use Excel to design models that simulate the building blocks of their business and help them cost their labour or determine the correct pricing of their products and services.
These models help you to understand what drives your prices, said Basdeo.
The models are used to project how prices and costs react to different scenarios. Harvey explained that this information is fed into the planning of the business to ensure that a company’s business model is elastic enough to cope with external or internal shocks and still meet the overheads.
The 15 participants represented a cross-section of the economy from manufacturing and garment making to entertainment media services, said Basdeo.
About half of the participants were start-ups, whereas the other half consisted of established businesses.
The Technological Consultancy Service of the Caribbean Development Bank maintains different types of assistance programmes for small and micro businesses in 18 CDB borrowing member countries.
In addition to workshops like the one on strategy and business modelling, the CTCS focuses on one-to-one assistance, pairing a business with an expert for up to 15 working days, during which the entrepreneur learns new techniques and tackles specific business concerns.
CTCS helps users find solutions to practical problems and assists companies in all industries from manufacturing to the hotel industry. “We provide technical assistance from A to Z, except for M,” said Harvey, referring to applications for funding, which have to be addressed to national development banks, such as the Cayman Islands Development Bank.
However, CTCS’s specialist advice is subsidised by the CDB, requiring applicants to cover only a fraction of the actual cost.