Business Terms & Definitions

Classifications referring to the type of transaction: B2B (Business-to-Business) focuses on selling to other companies; B2C (Business-to-Consumer) focuses on selling to individual customers.

A strategic management template used to quickly document and develop new business models or existing ones. It covers nine key components:

Customer & Offering

1. Customer Segments: The specific groups of people or organizations an enterprise aims to reach and serve.

2. Value Propositions: The bundle of products and services that create value for a specific Customer Segment, solving a problem or satisfying a need.

3. Channels: How a company communicates with and reaches its Customer Segments to deliver its Value Proposition.

4. Customer Relationships: The types of relationships a company establishes with specific Customer Segments (e.g., personal, automated, community).

5. Revenue Streams: The cash a company generates from each Customer Segment, detailing how the business captures value monetarily.

Infrastructure
These blocks describe the assets and activities required to create and deliver the value proposition.

6. Key Resources: The most important assets required to make the business model work (e.g., physical, intellectual, human, financial).

7. Key Activities: The most important things a company must do to operate successfully, such as production, problem-solving, or network management.

8. Key Partnerships: The network of suppliers and partners that help the business model work and optimize operations, reduce risk, or acquire resources.

Financial Viability
This block represents the cost implications of running the business model.

9. Cost Structure: All costs incurred to operate the business model, determined by the Key Activities, Key Resources, and Key Partnerships.

A detailed, semi-fictional profile representing your ideal customer, used to tailor products, marketing efforts, and sales strategies.

The process of making a product or service stand out from its competitors. Effective differentiation gives your business a unique selling point (USP).

An entrepreneur's plan for liquidating (selling) their ownership in a business. Common strategies include selling to a large company, passing it to family, or offering an Initial Public Offering (IPO).

Creations of the mind (such as inventions, writing and artistic works, designs, symbols, logos) used in commerce. IP is legally protected by patents, trademarks, or copyrights.

A measurable value that demonstrates how effectively a company is achieving key business objectives. KPIs are used to track success over time.

The version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort. Used to test market acceptance quickly.

A concise declaration of a company's reason for existence, describing what the company does and for whom. It focuses on the present state of the business.

A focused, targetable segment of a market that is highly specialized. Serving a niche allows you to focus resources and reduce competition.

A legally binding contract used to protect confidential information shared between two or more parties, ensuring sensitive business details are not shared publicly.

A structured change designed to test a new fundamental hypothesis about a product, strategy, or growth engine. It is a common course correction in startups and evolving businesses.

The capacity of a business to increase production or handle growth without negatively impacting its cost structure, performance, or required resources.

A concise statement that clearly communicates the tangible and intangible benefits a customer will receive from using your product or service, solving their pain point.

A concise declaration of where the company wants to be in the future, providing direction and long-term inspiration for the team and stakeholders.