Social Business Planning
Guide for Educators
Created by:
Nynke de Jager, Stichting Incubator (The Netherlands)
Simona Simulyte, European Social Entrepreneurship and Innovative Studies Institute (Lithuania)
Duncan Chamberlain, Bridging to the Future (United Kingdom)
Theodoros Alexandrou, Institute of Entrepreneurship Development IED (Greece)
Matthew Caruana, Foundation for the Promotion of Entrepreneurial Initiatives (Malta)
Sonia Merlo, JO Consulting (Italy)
Published: September 2018
Copyright: T3QM consortium
All right reserved
This project has been funded with support from the European Commission. This communication (website) reflects the
views only of the author and the Commission cannot be held responsible for any use which may be made of the
information contained therein. Project n.:2017‐1‐UK01‐KA204‐036651
The Three Questions Model of Developing Social Entrepreneurs (T3QM) is an innovative methodology proven to create
jobs and develop social entrepreneurial skills (both soft and hard skills). Starting a business should be accessible to
everyone. Yet, many aspiring business people are discouraged by the complex, time consuming steps required to start
a business. T3QM is about ensuring that the opportunities of social entrepreneurship are open to any individual. To
ensure this, T3QM uses practical business material that puts sales and income first.
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Table of contents
1. About the Guide for Educators ................................................................................................................. 5
1.1 What is it? ................................................................................................................................................ 5
1.2 Objective of the Guide for Educators ...................................................................................................... 5
1.3 Who was it created by? ........................................................................................................................... 6
2. Course delivery .......................................................................................................................................... 7
2.1 Who can deliver the course? ................................................................................................................... 7
2.2 General instructions ................................................................................................................................ 7
2.3 Course curriculum materials ................................................................................................................... 7
2.4 Course delivery options ........................................................................................................................... 8
3. Course content overview ........................................................................................................................ 11
3.1 Structure of the course for learners ................................................................................................ 11
3.2 Course overview .............................................................................................................................. 12
3.3 More training advice ....................................................................................................................... 14
4. Business Planning for (social) Entrepreneurs ......................................................................................... 15
What is Business Planning? ......................................................................................................................... 15
Why is Business Planning important? ......................................................................................................... 15
Business Planning for social entrepreneurs ................................................................................................ 16
Myths and realities of business planning – debunked! ............................................................................... 17
5. Key questions facing a social entrepreneur ........................................................................................... 18
6. QEAS – Qualities, Experiences, Attitudes and Skills .............................................................................. 21
6.1 Introduction ..................................................................................................................................... 21
6.2 Exemplar stimulus and Brainstorm Questions ................................................................................ 23
6.3 Subquestions to be completed by AL .............................................................................................. 24
6.4 Social Dimension ............................................................................................................................. 26
7. How does T3QM work and why does it help social entrepreneurs? .................................................... 27
8. What are you selling? ............................................................................................................................. 29
8.1 Introduction ..................................................................................................................................... 29
8.2 Exemplar stimulus & Brainstorm Questions .................................................................................... 30
8.3 Subquestions to completed by AL ................................................................................................... 31
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8.4 Activating examples ......................................................................................................................... 35
9. To whom are you selling? ....................................................................................................................... 37
9.1 Introduction ..................................................................................................................................... 37
9.2 Exemplar stimulus & Brainstorm Questions .................................................................................... 38
9.3 Subquestions to be completed by AL .............................................................................................. 39
9.4 Activating examples ......................................................................................................................... 41
9.5 Social Dimension ............................................................................................................................. 43
10. For how much are you selling? ................................................................................................................. 44
10.1 Introduction ..................................................................................................................................... 44
10.2 Exemplar stimulus & Brainstorm Questions .................................................................................... 44
10.3 Subquestions to be completed by AL .............................................................................................. 46
10.4 Activating examples ......................................................................................................................... 50
10.5 Social dimension .............................................................................................................................. 51
11. Creating a meaningful plan from the 3 Questions ................................................................................... 53
11.1 Business idea ................................................................................................................................... 53
11.2 Team and Organization .................................................................................................................... 54
11.3 Market Analysis ................................................................................................................................ 54
11.4 Model of growth .............................................................................................................................. 55
11.5 Technical aspects ............................................................................................................................. 55
Empower social business planning ................................................................................................................. 53
13. Useful Resources ....................................................................................................................................... 57
ANNEX 1: MORE SUBQUESTIONS FOR “WHAT ARE YOU SELLING?”………………………………………………………….58
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1. About the Guide for Educators
1.1 What is it?
This document has been produced to support adult educators in their entrepreneurship education. It includes
advice to the adult educator (AE) on how to introduce the topics and how to motivate and engage the adult
learners (AL). The blue boxes in this document indicate some extra information/guidance for the AE.
The key aspect of the curriculum is the Three Questions. Answering these three questions will be guided by
sub questions. In this guidebook for adult educators you can find exemplar answers on these questions as
well, and suggestions for next steps based on these answers.
Then follow the activating examples that illustrate the Questions and the sub questions with the
accompanying suggested key points to support the adult educator in highlighting the key points of the case
study so that the case studies support and illustrate the learning of the adult learner.
Throughout the curriculum you will encounter questions/discussion on the social enterprise dimension to
the business plan. You can find questions to be completed by the adult learner within the Three Question
frame and outside the frame. Here too, suggested possible answers will be discussed to help the adult
educator to teach about social enterprise aspects, the difference between a social enterprise and a non‐social
enterprise, the challenges and opportunities that come with this.
Tools to support the learning of the adult learner by practical activities can be found in a separate document
(Social Business Planning using 3 Questions – Tools for educators). Again, here you can find advice, practical
guidance, suggested answers and examples of how the adult educator should choose and deliver the tools,
to support the learning of the adult learner.
1.2 Objective of the Guide for Educators
The objective of the guide for educators is to support educators in improving and extending the supply of
high quality learning opportunities tailored to the needs of the individual.
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1.3 Who was it created by?
The course has been developed by experts who are passionate about entrepreneurship and
business development. The partners have experience in several areas of entrepreneurship.
Hereunder you can find the partners who have provided input in the development of this course.
Bridging to the Future is an innovative company from the UK which
challenges and reforms existing approaches to organisational and individual
productivity, job creation, economic independence and economic
sustainability. BttF believes in creating jobs through new businesses, active
incubation and practical leadership programmes (internationally).
The Institute of Entrepreneurship Development (iED) is a Greek NGO
committed to the promotion of innovation and the enhancing of the spirit of
entrepreneurship. By recognizing entrepreneurship as a crucial factor for the
development and cohesion of societies, the institute promotes employment
and provides innovative solutions that facilitate growth of entrepreneurship.
The focus of Stichting Incubator is on helping starting companies to firmly
establish their business and to maximize their growth. To this end, Inqubator
offers a shared room facility in which starting entrepreneurs work on their
business plan, get advice on how they should proceed in the development of
their business and follow different kinds of workshops and masterclasses.
European Social Entrepreneurship and Innovative Studies Institute is
dedicated to innovative teaching methods, strategy creation, and
development of sustainable and social entrepreneurship. The partner also
promotes the socially responsible development of society through social,
cultural, vocational and creative learning activities.
JO Consulting S.r.l. is an experienced consultant in business plan
development and in providing tutoring services to support start‐up
companies and new aspiring entrepreneurs. The excellence in consultancy is
also provided through the strong connections with the University of Catania,
as well as local authorities among the whole territory of the Sicilian region.
The Foundation for the Promotion of Entrepreneurial Initiatives (FPEI) is a
private not‐for‐profit foundation, with the aim of promoting and supporting
entrepreneurship. FPEI encourages all forms of entrepreneurship, from high
tech, high growth ventures to social enterprises. FPEI aims to establish new
initiatives and provide tools that will promote entrepreneurship in Malta.
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2. Course delivery
2.1 Who can deliver the course?
The course is designed to be delivered by adult educators in local organisations to develop entrepreneurship
learning and sustainable businesses in their communities. Educators can easily adapt the set of training
materials and resources to design and deliver training sessions using high‐quality content which has been
developed, tested and reviewed in the UK, Greece, the Netherlands, Italy and Malta.
We provide all the necessary resources and materials to successfully deliver the course in a number of
settings and formats (see course delivery for more). As such, previous experience of delivering training in the
field of entrepreneurship is not necessary but favoured. Some industry knowledge would be useful, to be
able to sign posting to other local, regional and national supports which may be of interest to the adult
learners.
2.2 General instructions
Please read the entire guide thoroughly for all the tips, tricks and guidance on delivering the course. Please
Allow adequate training time for sessions
Localise training content with case studies and information on local supports for the adult learners
Ensure that each participant is involved in the exercises – these provide valuable practical learning
Spend time for review during the course
2.3 Course curriculum materials
The course includes a comprehensive set of resources for delivery in several settings. These resources are:
Social Business Planning – handbook for social entrepreneurs (Adult Learner handbook)
Social Business Planning – Guide for Educators
Case studies
Extra resources
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2.4 Course delivery options
There are numerous ways to use the materials of this course. The most favoured is a blended approach of
the following:
2.4.1 Traditional Classroom Training
Classroom training remains one of the most popular training techniques for trainers. Typically, it is instructor‐
centred face‐to‐face training that takes place in a fixed time and place.
Classroom Tool Suggested Use in the Classroom Additional Resources Required
Learner SDSR D:\Drive Modules 1‐6 contain 18 Printed Learner Workbooks, one
Workbooks exercises intended to help learners put their for each participant
new skills and knowledge into practice.
Blackboard, Invite learners to write on the board or ask Pens and so on
whiteboard for feedback that you write on the board
Suggested delivery mechanisms:
• Small group discussions. Break the participants down into small groups and give them case studies
or work situations to discuss or solve. This allows for knowledge transfer between learners.
• Q & A sessions. Informal question‐and‐answer sessions are most effective with small groups and for
updating skills rather than teaching new skills. These should be used frequently across course delivery.
• Multimedia. Multimedia training materials tends to be more provocative and challenging and,
therefore, more stimulating to the adult mind. Trainers should ensure that these are used to their full
potential.
• Interactive tools. The engagement of students can be easily achieved by using interactive tools. An
example of a free tool is Kahoot! which is a game‐based learning and trivia platform used in classrooms,
offices and social settings. You can compile a quiz, which can be answered by the students on their
phones/tablets/computers. It’s possible to get immediate feedback and results.
2.4.3 Flipped Classroom
In a Flipped Classroom learners study module content prior to class with a focus on exercises and assignments
in class. The classroom transfer of knowledge makes way for videos or other forms of online instruction at
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the student’s home. This creates more room for practicing in class, for extra explanation when needed and
offers the possibility to dive deeper into the materials during school hours. The model of Gerstein (2011)
mentions four phases of a flipped lesson.
Phase 1: Make a joint start
It is recommended to start jointly with a new subject. The goal of this phase is to arouse interest in the
subject, for example by the means of a case study or an interactive activity.
Phase 2: Learners start working independently with the instruction
In this phase, learners continue to acquire knowledge in their own time. This is the instruction phase that
would normally take place in the classroom. You can use the online study materials or produce an instruction
yourselves. Learners can study (parts of) the provided PowerPoint presentations, the videos, further reading
materials.
Phase 3: Independent content processing
In the third phase learners process the content from phase 1 and 2. They will do assignments and tests. It’s
possible to plan activities from phase 2 and 3 simultaneously or alternate between them. For example, you
can give a task during a video lesson, give feedback and continue the video lesson. Invite learners to ask
questions to each other or to you.
Phase 4: Back together in class
With your support and expertise and the interaction between learners it’s possible to go one step beyond.
By solving a complex problem together, by individual guidance or by feedback. What matters is that you use
the ‘gained time’ optimally, because you spend no or less time on instruction.
2.4.4 Blended Learning
Blended Learning combines online digital media with traditional classroom methods. It requires the physical
presence of both educator as learner, with some element of learner control over time, place, path, or pace.
Learners still attend a classroom setting with an educator present, face‐to‐face classroom practices are
combined with computer‐mediated activities regarding content and delivery. Blended learning is most used
in professional development and training settings.
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2.4.5 Collaborative/Peer to Peer Learning
Collaborative learning is an educational approach to teaching and learning that involves groups of learners
working together. According to Gerlach, "Collaborative learning is based on the idea that learning is a
naturally social act in which the participants talk among themselves (Gerlach, 1994). It is through the talk
that learning occurs." Examples for boosting collaborative and peer‐to‐peer learning are:
Peer review
Peers in the classroom are brought together to jointly evaluate the work by one or more people of similar
competence to the producers of the work. Peers not only assess the performance of each other, but also
share their experience and know‐how.
Google Docs
This online collaboration tool facilitates the creation of meaningful documents. All group members can work
at the same time (real‐time) in the same document, from any location from various devices. Changes are
automatically saved in documents as being typed upon. It’s possible to monitor the revision history of a
document where you also can see who made a specific change. They can also share documents, chat and
comment.
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3. Course content overview
3.1 Structure of the course for learners
Introduction
Business planning for (social) entrepreneurs
Key questions facing a social entrepreneur
QEAS – Qualities, Experiences, Attitudes and Skills Activities
How does T3QM work and why does it help social entrepreneurs?
T3QM: What are you selling?
Case studies
‐ Value proposition
‐ Key activities
‐ Key resources
‐ Key partners
‐ Social dimension
T3QM: To whom are you selling? Tools
‐ Customer segmentation
‐ Customer relationships
‐ Social dimension Activities
T3QM: For how much are you selling?
‐ Cost structure
‐ Revenue stream
‐ Social dimension
Creating a meaningful plan from the 3 questions
There are some informative chapters about the above‐mentioned subjects. We also want to emphasize the
importance of an entrepreneur’s QEAS (qualities, experiences, attitudes and skills). This will include some
activities/exercises, since this is seen as the best way to gain insight in the QEAS and train them. When
discussing T3QM extensively, there are tools, activities and case studies available to strengthen the learning
process. All these materials are meant to help you thinking about your business plan. In the next chapter
(creating a meaningful plan from the 3 questions) the step will be made from the questions to your own
business plan.
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3.2 Course overview
QEAS – Qualities, Experiences, Attitudes and Skills
Aim To develop social entrepreneurial QEAS which are relevant, sustainable
and supportive of their business plan and business idea. To assess and
develop the necessary QEAS they need to be successful in their social
enterprise venture.
Learning Objectives To raise awareness of QEAS
To increase the understanding of the relevance and importance
Examples/exercises/activities
of QEAS within the context of social entrepreneurism
To practically develop relevant QEAS through activities and
relate them, through evaluation and discussion, to their
business plan and idea
To identify areas of future professional development in QEAS to
support their business plan development
Tool 1 ‐ Spoon stuff
Tool 2 ‐ Random request
Tool 3 ‐ A day in the office
Tool 4 ‐ £10 Challenge
Tool 5 ‐ Shipwrecked
T3QM: What are you selling?
Aim To demonstrate the importance of the problem which they are solving
and help the entrepreneurs define what their customer wants
Learning Objectives To improve the learners’ understanding of the importance of
their customer’s problem
To give learners the tools to help them to build the solution
which their customer wants
Examples/exercises/activities Example 1: How Red Bull got its wings
Example 2: GoPro – How a hero is losing millions
Tool 1: How to identify your USP
Tool 2: Value proposition template
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T3QM: To whom are you selling?
Aim To demonstrate the importance of the customer in any business idea and
help the entrepreneurs determine who their customer is
Learning Objectives To improve the learners’ understanding of the importance of
the customer in their business idea
To give learners the tools to determine who their customers
are, how best to reach them and how to manage them
Examples/exercises/activities Example 1 – Selling mushrooms
Example 2 – Relationship with Google and Facebook?
Example 3 – Google’s DIY approach
Tool 1 – Activity on targeting shoes buyers
Tool 2 – Quiz on ‘To whom are you selling?
T3QM: For how much are you selling?
Aim To support new and potential entrepreneurs in knowing the cost
structure and the revenue streams of their business.
Learning Objectives To improve the learners’ understanding of the importance of
cost structure, revenue streams and the characteristics of them
Examples/exercises/activities Example 1‐ Google
Tool 1 – Calculating you startup capital
Tool 2 – Calculation break‐even price
Tool 3 – Finance option checklist
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3.3 More training advice
Before we take you through the course, we would like to share our contact information in case you need any
further information on how to deliver this training or make the best use of this course. Do not hesitate to
contact any of our project partners.
Bridging to the Future
Duncan Chamberlain
[email protected]
The Institute of Entrepreneurship Development (iED)
Theodor Alexandrou
[email protected]
Stichting Incubator
Nynke de Jager
[email protected]
European Social Entrepreneurship and Innovative Studies Institute
Simona Simulyte
office@europe‐institute.com
JO Consulting S.r.l.
Paola Sirugo
[email protected]
The Foundation for the Promotion of Entrepreneurial Initiatives
Matthew Caruana
[email protected]
Next in the guide we will take you through the learning materials.
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4. Business Planning for (social) Entrepreneurs
What is Business Planning?
A Business Plan is an essential tool that methodically thinks through the entire entrepreneurial planning
process. Many entrepreneurs do not actually complete a business plan unless required to by their bank or
funding agency. This is a lost opportunity. A properly prepared Business Plan should tell a story, make an
argument and conservatively predict the future. Business planning guides you through the process of setting
goals, explaining objectives and then mapping out a document to achieve these goals and objectives. It does
not need to be complicated.
Why is Business Planning important?
You can find a lot of quotes on why business planning is important. A quote of Antoine de Saint‐Exupery is a
great summary: a goal without a plan is just a wish. The chance of reaching your goal without knowing how
to reach your goal is very small. According to Paul Fagan, Action Coach, “A staggering 80% of small businesses
without a business plan will fail in their first 5 years”.
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Why is the business planning process essential?
You wouldn’t build a house without creating a plan. Why would you build a business without having
a similar plan?
To help you think through the whole process – the value of a business plan is not only the plan
itself, but the process of writing it
To put down on paper the resources you need to get started and what
To convince yourself that it is worth doing
To show others that you have thought it through
To convince investors to give support
To give yourself targets to aim towards and measure yourself against
Business planning helps you to focus on your core business, instead of being distracted by side
paths.
Business planning supports (social) enterprises in different ways1:
‐ Attract investments
‐ Identify risks
‐ Measure social or environmental outcomes
‐ Demonstrate that you are using a business approach
‐ Showcase the management team
‐ Build alliances
‐ Check thinking
‐ Determine feasibility
Business Planning for social entrepreneurs
Besides the components of a regular enterprise, there are a couple of other areas a business plan for a social
enterprise should contain. First of all, it needs to address the social problem the business will solve. Next to
that, the business plan should explain how the programs, products, or services address that problem and
last but not least, it should address how the organization plans to measure or prove its positive impact on
the problem.
1 Source: https://www.marsdd.com/mars‐library/business‐plans‐for‐social‐enterprises‐se‐and‐social‐businesses/
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Myths and realities of business planning – debunked!
In developing a business plan and a business model, entrepreneurs need to be aware that there are myths
and misconceptions about the process.
#1 Myth: Business plans are only for start‐up companies
Reality – Companies at all stages of development need to prepare and update business plans to plot their
course and plan and track progress. This could include attracting new investment, how you will launch a new
product, a new market, take on board new employees, expand or sometimes contract a business.
A solid business plan can be the difference between just a business idea and a successful business. It allows
you to set goals and determine how to realistically measure them. In the process of creating one, you develop
an understanding of your market and the competition that is based on facts, not just hopes.
#2 Myth: Business plans are only written when a company needs to raise capital.
Reality – although most business plans are written in connection with the search for capital, a well‐written
business plan will serve a variety of beneficial purposes to the company, its founder and its team.
‐ Use it as a management tool and road map for growth
‐ Use it to measure progress over time in achieving projected goals and objectives
#3 Myth: Business plans should be as detailed and slick as possible
Reality – Your reader will not have the time to review hundreds of pages of text. The plan must be concise,
well‐written and when used to seek funding should focus on the lender’s or investor’s principal areas of
concern. Do not clutter it with irrelevant information.
Although a business plan ought to be presented professionally, an overly lavish presentation can have the
opposite effect – substance over style wins every time.
Interestingly, business plans prepared in PowerPoint can be very effective!
#4 Myth: Business plans should emphasize ideas and concepts, not people
Reality – many entrepreneurs fear that if the success of a company depends too heavily on any specific
person, it can be a negative thing. Although this is partially true, investors consider both the team as well as
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the concept of the enterprise. People buy people but so many business plans are bland and fail to capture
the personality and spirit of the promoter – write with passion, that same passion that keeps you craving
entrepreneurial success.
#5 Myth: Optimism should prevail over realism.
Reality – the business plan should demonstrate the enthusiasm of the founder(s) of the company as well as
generate excitement in the reader; however, it should be credible and accurate. If being used to seek funding,
investors will want to know all of the company’s strengths and its weaknesses. Previous failures should be
tackled head on – admit the failure, explain the reasons why and what will be done differently second time
around.
As a general rule, investors will feel more comfortable investing in someone who has learned from previous
business failures rather than a person who has never managed a company.
5. Key questions facing a social entrepreneur
Hereunder you can find key questions to think about before starting the social enterprise (Based on the 7
Key Questions of Ashoka2). The rationale in this is to take some time in the beginning of the process to save
time later. By asking these seven questions, it should become more clearly what you would like to do and it
ensures the relevance of your business’ social impact.
Which social problem have I identified and how am I going to improve the issue?
It’s essential to precisely define the social problem that you are addressing in order to demonstrate the
pertinence of your project clearly. What is the social need and what is the target? How big is the problem?
Why does this problem exist? How are you going to contribute to the solution of that social problem? It’s
important to clearly define your area of activity, your mission and your vision.
2 Ashoka. The Guide to the 7 Key Questions all Social Entrepreneurs should ask themselves.
https://www.ashoka.org/en/story/7‐key‐questions‐you‐should‐ask‐yourself‐social‐entrepreneur
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Why am I better than my “competitor”?
Probably you will not be the only one trying to fix “your” social problem. Therefore, you should take a look
at the qualities of the other actors compared to your qualities. What are the other existing solutions? What
are your key strengths? What are you doing that is truly unique? Where do you bring value differently? With
insights on your main assets you will be able to formulate a suitable response to the identified problem; to
strengthen your proposal of added value; to expand your impact on society.
What will be my core activity/activities?
In your enthusiasm it’s likely to be tempted to diversify activities, but sometimes it’s the best decision to say
“no”. You need to think about which activities to keep, remove or develop. Which activities contribute to
your vision? Sticking to these activities, keeps you focused and consistent with your vision. Keep in mind your
strengths and weaknesses as well: do what you do best.
How do I ensure financial sustainability?
You want to project to be sustainable, so you have to come up with a viable economic model. Think of who
would benefit from your project directly. This group can be a source of funding. Think also of indirect
beneficiaries, which might be interested in funding your project as well. A combination of different kind of
funding sources will spread the risk of running out of funding (for example gifts, subsidies, revenue from
sales, and so on).
How do I maximize social impact by partnering up?
To maximize the social impact of your project it can be beneficial to cooperate with other stakeholders. First,
identify what you need from partners and what can you offer to them? A benefit for both parties increases
the stability of the partnership.
How do I measure social impact?
Measuring social impact is one of the most difficult but at the same time also most important issues for social
entrepreneurs. Measuring social impact allows you to assess and validate the consistency of your actions
committed to the mission of the project.
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Of course you want to know for own monitoring purposes whether you’re on the right track, but the
evaluation of social impact is also essential for you to show cast your impact to external parties (partners,
investors, and so on). Choosing the relevant criteria and indicators is more important rather than which
evaluation method. A complete evaluation should include both quantitative as well as qualitative indicators.
Be aware of other (macroeconomic) factors influencing your area of work as well. Your impact = obtained
results – what would have happened without your intervention too.
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6. QEAS – Qualities, Experiences, Attitudes and Skills
Hours for learning: 6 ‐8
Aim: To develop social entrepreneurial QEAS which are relevant, sustainable and supportive of their
business plan and business idea i.e. what QEAS do they need to be successful in their social enterprise
venture.
Learning Objectives:
‐ Learners’ awareness of QEAS will be raised
‐ Learners’ understanding of the relevance and importance of QEAS within the context of social
entrepreneurism will be introduced
‐ Learners will practically develop relevant QEAS through activities and relate them, through
evaluation and discussion, to their business plan and idea.
‐ Learners will identify areas of future professional development in QEAS to support their
business plan development.
6.1 Introduction
This introduction is an opportunity to explain to learners about QEAS. QEAS are often overlooked as a
key to business and social enterprise success. Please remember that many aspiring entrepreneurs and
social entrepreneurs will focus on the narrow angle of their business: cash flow, value proposition etc.
but QEAS are fundamental to business success. Therefore, perhaps emphasize to the learners the
importance of QEAS because business is more than a business plan – its about successfully implementing
the business plan and this requires resilience, relationships, confidence, communication, motivation and
the willingness to listen, adapt, focus and to have ambition.
6.1.1
QEAS (Qualities, Experiences, Attitudes and Skills) are the personal characteristics that successful social
entrepreenurs and entrepreneurs possess and continue to develop to optimise success of the business idea
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6.1.2
QEAS are essential to the successful implentation of a business plan, and indeed will inflcuence the business
plan itself. Many business ideas and start‐ups failt because the entrepreneurs lacks the QEAS to implement
the idea and busines plan in reality. QEAS therefore is the essential link between a plan and the practical
development of the business itself
6.1.3
QEAS includes: problem solving, decision making, self motivation, motivation of others, negotiation, verbal
communciation, written communication, visual communication, judgement, responding to events, planning,
anticipation, leadership, management, event management, prioritisation, delegation, strategy, active
listening, amongst others and is underpinned by confidence and resilience
6.1.4
Business, including social enterprises, are more than an idea – they need to be delivered successfully and this
means: listening and engaging with potential customers, building relationships, having self regulatory skills,
learning from mistakes, taking responsibility, being willing to adapt and have some flexibility (and having the
confidence to do so), having determination to work through challenging times, keeping sight of the aim,
believing in the business and the social value. In other words: there might be a great business plan, but this
needs to come off the page and be in reality – this is what QEAS does
6.1.5
QEAS are about attitude, belief, motivation, work ethic, relationships and how to make the business idea and
plan work:
‘’Be positive, build relationships, listen, believe in learning from others and trust yourself and your excellence.
Be concerned less on your business plan and more on being the best you can be: there is no substitute for
being good and no better feeling than having choice."
‘’Whenever you are asked if you can do a job, tell 'em,
'Certainly I can I' Then get busy and find out how to do it." ‐ Theodore Roosevelt
‘’Show up early, stay late, do your best, always say
thank you, give people more than they expect & follow up." ‐ Shep Hyken
"ONE1 is about those people who want to make a difference start a business, create jobs, provide a better
or new service or product and who understand the value in sharing, learning, listening, hard work and
persistence."
6.1.6
Do QEAS matter? Forbes, the International Business Magazine says this: Why do start‐ups fail:
Horrible Soft Skills
Entrepreneurs often fail because they’re not housebroken, because they speak their minds no matter how
inappropriate or inopportune the situation may be. Some entrepreneurs are famously outspoken and
controversial – we know who they are – but they generally became that way after their first hit start‐up. If
an entrepreneur cannot listen, is insecure, short‐tempered and intolerant of opposing opinions, he or she
will fail. The worst entrepreneurs are the ones who cannot accept responsibility for anyone and spend their
days and nights looking for someone – anyone – to blame for their mistakes.
The Startup website’s advice builds on this by saying that most start‐ups fail because people lack the
confidence, resilience and vision to actually start a business and then if it starts there is a lack of listening, a
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lack of willingness to react to feedback, poor decision making and a poor appreciation of soft skills, emotional
intelligence and relationships.
Patrick Henty, writing in Entrepreneur states that start‐ups fail, amongst other reasons, because:
1. Lack of focus
2. Lack of motivation, commitment and passion
3. Too much pride, resulting in an unwillingness to see or listen
4. Taking advice from the wrong people
5. Lacking good mentorship
6.1.7
Flipping this question.....why do start‐ups succeed? Of course there needs to be a great product/service and
a market to buy it. According to the Ecommerce Genome’s ‘’StartUp Genome Report’’ the reasons for start‐
up success include:
1. Founders are driven by impact, resulting in passion and commitment
2. Commitment to stay the course and stick with a chosen path
3. Willingness to adjust, but not constantly adjusting
4. Patience and persistence due to the timing mismatch of expectations and reality
5. Willingness to observe, listen and learn
6. Develop the right mentoring relationships
7. Effective decision making and a strategic view
6.2 Exemplar stimulus and Brainstorm Questions
Ask the learners what they think are the key characteristics of successful entrepreneurs and social
entrepreneurs. You might wish to use examples a stimulus, such as :
http://www.divinechocolate.com/us/ ,
https://hannahko2014.wordpress.com/2015/11/03/voidstarter/
https://www.todxs.org/
but do use other examples if they are useful. Ask the learners what QEAS these social enterprises
required to start and develop.
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6.3 Subquestions to be completed by AL
1.What QEAS do you think that you have?
Encourage the learners to reflect on their own QEAS – be sure to allow them to discuss this, and to explore
their achievements and talents and from there to suggest their QEAS. Learners often underestimate their
QEAS so encourage a positive discussion and reflection.
2. Ask people who know you well what QEAS they think you have. Does their view differ to your own? Why?
Ask the learners to engage with 3 or more people who know them well – a teacher, friend, parent,
relative, employer etc. The key focus is to discover the QEAS the learners have (rather than not have) and
so the discussions should be positive. Encourage the learners to compare their own opinion with that of
others and to build a fuller list of QEAS.
3.Why are QEAS important for a successful business?
This might be best done with a discussion – what makes a successful business? What QEAS do
entrepreneurs have e.g. Bill Gates, Steve Forbes and local entrepreneurs. Encourage the learners to
explore why QEAS are so important (see introduction).
4. Can you think of examples when QEAS will be important for you in business start‐up?
This is an excellent opportunity to ask the learners to think about their own business idea – what QEAS do
they need to make this idea a success and why? This might be done via paired work or wider discussions
and there is also an opportunity to research success stories.
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5. What QEAS are important for the social aspect of a successful business?
This question focuses primarily on the social aspect regarding QEAS, as T3QM also includes a social
dimension. The learners can think about it in groups or come up with answers individually.
6. What QEAS might be essential for your specific social business idea?
This is a good chance to define what QEAS are needed for own social start‐up, so that this start‐up will be
successful. This helps in the process of assessing what QEAS are already present and what QEAS require
some extra effort.
7. What QEAS do you need to work on in your opinion?
This question is linked to the previous one and it will make the learner reflect on what QEAS are missing
or less developed as they should be. This will probably initiate ideas to make develop these QEAS (even
more).
8. How have you already proven to have particular QEAS?
The examples can be within personal or professional situations. This question gives the opportunity to
remember what the learner is already capable regarding QEAS and how that was achieved, which could
serve as an inspiration/example for own social start‐up.
9. How can you make the most use of your QEAS?
Here, the learner has to think of all the possibilities (even the ones which seem not realistic) to use own
QEAS to the most extent. This will provide ideas to initiate actions so that the own QEAS will be used to
the most extent and in the best possible way.
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10. Which QEAS might be useful for the sustainability of your social business?
Eventually, the goal of the learners’ social start‐ups, is also to exist for at least several years and not to
be closed after one year for example. This questions makes the learners anticipate on what QEAS they
will need to pay attention to, so that their social business will not only be successful, but will also stay
successful.
6.4 Social Dimension
This is an activity about values and so is an opportunity for you to remind learners about the ethical/social context
of social enterprises. The activity is best done in groups of about 6 learners initially and then once each group has
a solution the groups should come together to discuss
The key learning is to listen, the art of compromise, working together, achieving aims, ethics and value and
understanding different view.
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7 How does T3QM work and why does
it help social entrepreneurs?
Business planning is at least just as important for social
enterprises than for traditional businesses. Business plans
structure the varying ideas of the entrepreneur in a logical
way. It demonstrates the thought process of the
entrepreneur. Writing a business plan forces a (social)
entrepreneur to make decisions, and is therefore a useful
tool for strategic planning. This process clarifies gaps in thinking, especially around the logic of how social
impact will be created, and how deep it will be. It also forces specificity about the assumptions driving the
financial model, which allows others to provide feedback3.
The Three Questions Model of Developing Social Entrepreneurs (T3QM) is an innovative methodology proven
to create jobs and develop social entrepreneurial skills (both soft and hard skills). Starting a business should
be accessible to everyone. Yet, many aspiring business people are discouraged by the complex, time
consuming steps required to start a business. T3QM is about ensuring that the opportunities of social
entrepreneurship are open to any individual. To ensure this, T3QM uses practical business material that puts
sales and income first.
T3QM is a way of planning a business and planning the growth of the business. Though the questions seem
basic, the answers to them should be detailed enough to be the foundation of a business.
Planning is essential to work and business, but too often plans are too detailed, too theoretical and too
impractical. T3QM offers a very different approach and by following it you will be able to plan events,
activities, enterprises and business.
There are many ways to plan and prepare for a business, and many textbooks will make this very detailed
and complicated. T3QM makes the task much simpler and more practical. T3QM asks you to answer three
main questions, divided in several sub sections These sub sections are based on the Business Canvas Model.
This is one of the most used methods as preparation for starting your own company. For example, the
Chamber of Commerce in the Netherlands recommends it as a baseline for your business plan. The answers
3 Source: http://www.socialgoodguides.com/business‐plans‐and‐planning‐for‐social‐enterprises‐and‐nonprofits‐
guide/
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of these three questions are the basis of your business plan. With the answers to these questions you will
be able to come up with a very comprehensive business plan. Are you ready?
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8 What are you selling?
Hours for learning: 4
Aim: To demonstrate the importance of the problem which they are solving and help the entrepreneurs
define what their customer wants.
Learning Objectives:
‐ To improve the learners’ understanding of the importance of their customer’s problem .
‐ To give learners the tools to help them to build the solution which their customer want.
8.1 Introduction
The failure rate for new products and services is more than 90% in some sectors. 42% of startups fail because
they didn’t solve a market need. They failed because they didn’t put others first. Your one and only goal
should be to solve a meaningful problem for other people (B2C) or for other businesses (B4B).
Our goal is to help AL to understand that if nobody wants or needs their product, it is bound to fail. The
starting point for all product development should be to analyze the needs of current and potential
customers, their levels of satisfaction with what the competition is offering, their consumption habits and
the technical possibilities for improving existing products. Managers with ample experience and a strategic
vision of the company, the competition, the clients and the suppliers are key to this process.
In this section, we will split the “What?” question into 4 sections, namely: Value proposition, Key Activities,
Key Resources and Key Partners. After this session, new entrepreneurs, will be able to think about
determining what customers problem they are solving, what features their product or service has, what their
customers want and will be ready to move on their business model.
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8.2 Exemplar stimulus & Brainstorm Questions
In order to sum up, watch this video where the company's CEO, Ash Ashutosh, and CMO, Mike Troiano,
cover Actifio's process for coming up with a strong value proposition. You will get ideas and structure
how to define, evaluate and build value proposition to ensure AL’s ventures can break out and build a
compelling and sustainable business. Learn from Michael Skok, a serial entrepreneur turned venture
capitalist, about "pain gain ratios" and other ways to assess whether you are creating, delivering, and
harnessing value. This session also features a full case study from Actifio.
https://www.youtube.com/watch?v=6pKW‐ehL7dU
(this videos is for you to get more ideas and examples for your trainings to be discussed with AL)
Present this video there Kevin Roberts, global CEO of the advertising powerhouse Saatchi & Saatchi, says
focusing on your product first is an outdated way of thinking to AL.
Why Your Brand Is More Important Than Your Product
After you watch videos with AL, ask them divide into 4 groups, give them 10 min to brainstorm and 1 min to
present results:
Group 1: Why it is said, that “it does not matter what you sell, it does not matter what your product is. It
matters what your customers are talking about you”?
(the focus should be on Value Proposition and if AL successfully found out that we need to develop the
product or service which our customers need)
Group 2: Why customers nowadays expects to get everything for free? What should those product owners
do for not to fail?
(the focus should be on Key Activities and if AL successfully understood that you can always find the feature
for which customers wants to pay)
Group 3: What could be creative solutions to build MVP (minimal value product) with no money behind?
(the focus should be on Key Resources and if AL successfully understood that there different ways to get some
resources and are able to look for different ways to get what they need. It does not matter that in all cases
they are able to avoid the financial need, but the most important is to make them think about different
options for what they need/or do not need money. Be able to make the list of Key Resources)
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Group 4: Why it is said that “Recognition by World Known brands makes you famous” Is it always like this?
(the focus should be on Key Partners and if AL successfully understood that partnership is important. It does
not matter known or unknown partners, but with the help of partners, you can save your resources, raise
awareness, etc.)
8.3 Subquestions to completed by AL
The main task is to guide AL through questions listed bellow. In every question, try to get minimum 5 answers. Use
coaching techniques to help them deep into the topic.
ABOUT VALUE PROPOSITION AREA
PRODUCTS & SERVICES
We need to help AL to understand which products and services he/she offers that help his/her customer get
either a functional, social, or emotional job done, or help him/her satisfy basic needs.
Ask AL following questions:
1. Which products and services are in your existing value proposition?
2. Which products and services you offer to help your customer functional/social/emotional job
done?
3. Which products and services you offer your help your customer to satisfy his/her basic needs?
VITAMINS (Gain Creators)
We need to help AL describe how his/her products and services create customer gains. They explicitly outline
how AL intend to produce outcomes and benefits that his/her customer expects, desires, or would be surprised
by, including functional utility, social gains, positive emotions, and cost savings.
Ask AL following questions:
1. Could your products and services create savings that make your customers happy in terms of
time/money/effort?
2. Does your product or services copy current solutions regarding specific features/
performance/quality?
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3. Could your products and services outperform current delight solutions that delight your customers
regarding specific features/performance/quality?
GAINS
We need to help AL to describe the outcomes and benefits his/her customers want. Some gains are required,
expected, or desired by customers, and some would surprise them. Gains include functional utility, social
gains, positive emotions, and costs savings.
Ask AL following questions:
1. Which savings would make your customer happy in terms of time/money/effort would they value/
quality level?
2. What outcomes does your customer expect in terms of more of something/less of something/
quality level?
3. What outcomes would go beyond your customers’ expectations in terms of more of something/
less of something/quality level?
4. What do customers dream about?
5. What do your customers aspire to achieve?
6. What would be a big relief to your customers?
7. How do your customers measure success and failure?
8. How do your customers gauge performance/cost?
9. What would increase your customers’ likelihood of adopting a solution?
JOBS
We need to help AL to describe the things his/her customers are trying to get done in their work or in their
life. A customer job could be the tasks they are trying to perform and complete, the problems they are trying
to solve, or the needs they are trying to satisfy.
Ask AL following questions:
1. What is the one thing that your customer couldn’t live without accomplishing?
2. What are stepping stones that could help your customer achieve this key job?
3. What are the different contexts that your customers might be in?
4. How do their activities and goals change depending on these different contexts?
5. What does your customer need to accomplish that involves interaction with others?
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PAIN RELIEVERS
We need to help AL to describe how exactly his/her products and services alleviate specific customer pains.
They explicitly outline how he/she intend to eliminate or reduce some of the things that annoy his/her
customers before, during, or after they are trying to complete a job or that prevent them from doing so.
Ask AL following questions:
1. Could your products and services produce savings in terms of time/ money/ efforts?
2. Could your products and services make your customers feel better by killing frustrations/
annoyances/ other things that give customers a headache?
3. Could your products and services fix underperforming solutions by introducing new
features/ better performance/ enhanced quality?
4. Could your products and services put an end to difficulties and challenges your customers
encounter by making things easier/ eliminating obstacles/?
5. Could your products and services wipe out negative social consequences your customers
encounter or fear in terms of loss of face/ lost power/ lost trust/ lost status?
6. Could your products and services eliminate risks your customers fair in terms of
financial/social/ technical/ risks?
7. Could your products and services eliminate risks your customers fair in terms of things that
could potentially go wrong?
8. Could your products and services help your customers better sleep at night by addressing
significant issues/diminishing concerns/eliminating worries?
9. Could your products and services limit or eradicate common mistakes customers make by
helping them use a solution the right way?
10. Could your products and services eliminate barriers that are keeping your customer from
adopting current solutions by introducing lower or no upfront investment costs/ flatter
learning curve/ eliminating other obstacles preventing adoption?
PAINS
We need to help AL to describe anything that annoys his/her customers before, during, and after trying to get
a job done or simply prevents their costumers from getting a job done. Pains also describe risks, that is,
potential bad outcomes, retaled to getting a job done badly or not at all.
Ask AL following questions:
1. How do your customers define too costly?
2. Does too costly for your customers mean “it takes a lot of time”/“requires substantial efforts”?
3. What makes your customers feel bad?
4. How are current solutions underperforming for your customers?
5. Which features current solutions are missing?
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6. What risks do your customers fear?
ABOUT KEY ACTIVITIES AREA
We need to help AL to define key activities for which their customers are willing to pay.
Ask AL following questions:
1. For your value proposition to work properly what competences do you need/ kind of activities do
you need to be developed?
2. What distribution channels do you need to develop?
3. What kind of activities are key to your distribution channels?
4. What client relations activities do you need to employ?
5. What kind of activities are important if you want to maintain your customer relationships?
6. What activities refer to source of your revenue?
7. What kind of activities are fundamental to your revenue streams?
8. How do you produce your offerings?
ABOUT KEY RESOURCES AREA
We need to help AL to define key resources are behind their offerings and value proposition.
Ask AL following questions:
1. Do you need IT system? Specify what exactly do you need?
2. Do you need Human Resources?
3. What roles will you HR have?
4. Do you plan to outsource some services?
5. Do you need tangible equipment? Specify what exactly do you need?
6. Do you need the place? Specify what do you need as the infrastructure.
ABOUT KEY PARTNERS AREA
We need to help AL to define what partnership could help their business to succeed.
Ask AL following questions:
1. Who are your key partners?
2. What key resources do you get from partners?
3. What key activities do your partners carry out?
4. What can motivate these partnerships?
5. What do you bring to partners?
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6. What do partners bring you?
7. Who influence your customers/ opinion leaders/ stakeholders/users?
SOCIAL IMPACT
1. What value proposition you could find in your idea for the society?
2. What key activities/key resources you need to implement your promise to the society?
3. Make the list of key partners, which you would like to attract for to make the easier
implementation of your promise?
8.4 Activating examples
Example 1 ‐ How Red Bull Got Its Wings!
Red Bull is an energy drink sold by Austrian company Red Bull GmbH, created in 1987. Red Bull has the highest
market share of any energy drink in the world, with 6.062 billion cans sold in 2016. The case study is told by
Tom Ellsworth. THOMAS N. ELLSWORTH, is an experienced CEO / COO and entrepreneur. He has been
disrupting industries and driving consumer shifts through Venture‐backed companies in technology,
software, publishing and mobile that have generated exits totaling over $1B.
Watch video bellow with AL
https://www.youtube.com/watch?v=AAVMkuHcGhU
Ask AL following questions:
1. What value Red Bull is creating to costumer?
2. What product Red Bull replace?
3. Why Red Bull is successful?
4. What was the success of Red Bull?
5. What was biggest challenges?
This example is important to emphasise the context of the importance of opening new markets, uniqueness and
value proposition.
Example 2 ‐ GoPro ‐ How a Hero is Losing Millions
The Biz Doc dives into an interesting case study on GoPro who has gone from startup to millions to billions
to losing profits. For those who have been vacationing on Jupiter, GoPro, Inc. is the American technology
company founded in 2002 by Nick Woodman. It manufactures eponymous action cameras and develops its
own mobile apps and video‐editing software.
Watch video bellow with AL
https://www.youtube.com/watch?v=l4fHeiqtGOA
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Ask AL following questions:
1. What customers wanted in the successful age of GoPro?
2. What was the biggest mistake?
3. What should GoPro do for to recover?
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9 To whom are you selling?
Hours for learning: 4
Aim: To demonstrate the importance of the customer in any business idea and help the entrepreneurs
determine who their customer is.
Learning Objectives:
‐ To improve the learners’ understanding of the importance of the customer in their business
idea.
‐ To give learners the tools to determine who their customers are, how best to reach them and
how to manage them.
9.1 Introduction
A survey carried out by the European Central Bank on the Access to Finance of SMEs in the Euro Zone (SAFE)4
shows that “finding customers” is the 1st and most pressing issue that SMEs face. Moreover, this situation
has been flagged in the past 14 reports since 2011. This clearly highlights the importance of identifying your
target audience and making sure you fully understand your customers’ needs and wants. If new or existing
businesses fail to recognise the importance of the consumer they will be operating at a disadvantage and will
face future dissolution.
In this section, we will split the “To Whom?” question into 3 sections, namely: Customer segmentation,
Channels and Customer Relationships. After this module, new entrepreneurs, will be able to think about
determining which customer segments, channels and relationships best fit their relative business model.
“I have learned to imagine an invisible sign around each person’s neck that says, ‘Make
me feel important!’” – Mary Kay Ash. The Founder of Mary Kay Cosmetics
“Strive not to be a success, but rather to be of value” – Albert Einstein
“You don’t earn loyalty in a day. You earn loyalty day‐by‐day.” – Jeffrey Gitomer. Author
and Professional Speaker
4 https://www.ecb.europa.eu/stats/ecb_surveys/safe/html/index.en.html
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Throughout this section it is essential to remain focused on the need to adapt every business to adapt
and formulate a business plan to highlights the needs and wants of the consumer. By using the right
methods for identifying customer segments and channels, adult learners will be able to build and grow
beneficial customer relationships.
You may start the topic by asking adult learners what the most important part of a business is and go
on to put emphasis on the consumer and the dependency that especially small business have when
trying to grow competitively.
9.2 Exemplar stimulus & Brainstorm Questions
9.2.1 Customer Segmentation
Adult learners can be motivated to engage with the different types of markets by trying to link examples that
directly and publicly embrace a customer segment from the list below. While giving basic information on the
differences between customer segments, and while highlighting how important it is to conduct market
research and identify the nature of the ideal customer segment.
You may also ask learners to imagine they are a business such as Gucci or Nike and ask them to evaluate
which market would be best for them to target.
In order to have an adult learner to engage with the different types of segmentation a teacher may list traits
that customers may have. For example, where they live or personality traits and ask the learners to determine
which type of segmentation the attributes fall under.
9.2.2 Customer Relationships
It must be clear to adult learners that customer relationships enable a business to have direct and indirect
lines of communication. A teacher may make it easier to contextualise the topic by linking sections of the
business cycle to the different types of relationships. For example, new business may have to focus more on
customer acquisition. This combined with different businesses examples for each type of customer
relationship will ensure that the learner will be able to identify a need for strong customer relationships.
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There should be emphasis placed on the need for a customer relationship so that when customers have need
for a product they link it to a brand. Customers don’t often demand a good or service when they meet the
good or service but when they need it. Attempt to ask student learners to remember the last time this
happened to them (Drinking a Corona the next time you go to a bar after seeing their new marketing
strategy). This may occur subconsciously or consciously.
9.2.3 Customer Channels
Adult learners must be able to identify the advantages and disadvantages linked to distributing a good
through external customer channels, in order to identify which customer channels are best to use for induvial
businesses. Teachers may also highlight that with the current online market places it is easier to distribute
goods in multiple channels, however the success of an online strategy depends on the number of substitutes
available to customers.
Ask students to identify examples of customer channels used in business. Link these examples to which
segment they are trying to reach and the need for which type of customer relationship.
9.3 Subquestions to be completed by AL
Probing questions have been kept simple in order to have adult learners be able to easily grasp the topic,
however teachers must emphasise the need for examples in order to put the theory in context.
9.3.1 Market Segmentation
• Which market type listed above is applicable for your idea?
• What consumer traits match your preferred consumer segment? (Demographical/ Geographical)
• How would you describe your customer’s consumer behaviour? (Traits/ Attributes/ Behaviour)
• How many segments can you identify for your idea?
• What is the size of each market segment you determined?
• Can you create a fictional persona for your selected segment?
9.3.2 Customer Relationship
• What are some benefits from creating a positive customer relationship?
• How would you communicate with your customers?
• What strategy would you use to attract new customers?
• What loyalty schemes can you implement to retain customers?
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• What type of customer relationship would you like to implement? And which is the most cost
effective?
9.3.3 Customer Channels
• What customer channel would be best to reach the consumer segment?
• What standards would the customer channel have to adhere too?
• How would you ensure that a customer would think of your good or service when the need for it
arrives?
• Can you foresee any ways in which the distribution channel might undervalue the company’s good
or service?
• Are there any potential partner channel you can consider?
• How would you ensure that there is no communication control lost through the customer channel?
Once again adult learners must be encouraged to include examples and apply the questions to the
business they are planning on operating or businesses that are already existing if it doesn’t apply.
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9.4 Activating examples
Example 1 – Selling mushrooms
Sachin and Virag are two enterprising youth. They have passed out from IIM, Bangalore. They thought instead
of doing a job, they will launch fresh vegetables in Indian markets. Having learnt of the future conventional
foods, they decided to venture into cultivation of mushrooms.
Mushrooms are known to be the best alternative food for vegetarians. For Sachin and Virag fund raising was
a serious handicap for mass production. However, the first trial batch of mushrooms that they produced was
bought by Star Hotel in Bangalore. Further, the hotel placed orders for supply of 20 kgs every day.
Now mushroom industry is run by small entrepreneurs, like Sachin and Virag. Another big player M/s
Ashtavinayak Mushrooms, equipped with cold storage facility was more interested in the export market.
Sachin and Virag have set their sights high. They aim to sell mushrooms in a very big way all over India.
Mushrooms have a great market potential and is a perishable food.
• How would you advise Sachin and Virag, to increase the consumer awareness of this new food?
• What would be your suggestions with respect to distribution channels for mushrooms?
This example is important to emphasise the context of consumer awareness in a market which is heavily populated
with alternatives, and the most efficient way to get customers to pick your good over others.
Example 2 – Relationship with Google and Facebook?
Google and Facebook have scores of customers across the globe and are therefore not dependent on any
one segment to keep their business going. This means that both companies are completely free to set their
prices, which customers must go along with because both companies hold the power in their hands. Both
companies engage in the Do it yourself relationship by creating self‐serve auction‐based Ad products,
making the companies “Price Deciders” rather than the more typical “Price Accepters”.
Google has had no one customer segment that has accounted for more than 10% of its revenue, making it
completely independent. Facebook earned 12% of its revenue in 2011 through Zynga, a provider of social
game services and the maker of popular online games like Farmville, Texas Holdem, Chefville, etc. However,
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despite these revenues instead of Facebook being dependent on Zynga, Zynga is more dependent on
Facebook for its revenues.
What factors allow Google to draw customers from multiple customer segments?
What would you say Facebook’s relationship with it customers differs to that of Google?
Is Facebook is an effective customer channel for Zynga?
Is Zynga is an effective customer channel for Facebook?
Example 2 and 3 offer the unique example of Google and Facebook in order for adult learners to see context and
that different businesses have different customers and customer needs. By emphasising the differences between
customers and business, learners will then be capable of applying the topics to different examples.
Example 3 – Google’s DIY approach
Google is the largest technological company in the world. Its main product is its search engine that is the
most used search engine in today’s day and age. Google employs two channels to deliver its value
propositions to its customer segments. It has created Global Sales and Support teams as well as a Multi‐
product Sales force.
1. For its individual customers, Google has a DIY approach with a high level of automation to make the
process convenient and to appeal to the average Googler.
2. Google’s Global Sales and Support team consists of specialized teams across industries that
establish relationships with advertisers and network members and aid them in gaining maximum
value from their relationship with Google.
Google’s sales force sells Search, Display and Mobile advertising and is focused on fostering relationships
with major advertisers and premium internet companies.
Which customer relationship is more important to Google’s success?
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What are the advantages and disadvantages of Google handling having their own customer
channels?
What is Googles value proposition?
By applying these different contexts and examples learners will receive a greater understanding of the above topics,
teachers must ensure that the adult learners are applying the indivial topic to a market example.
9.5 Social Dimension
Below you can find some questions for the social dimension section for the To Whom are you selling section.
1. Can you identify a market segment that will benefit from your solution and improve their life
conditions?
2. Can you offer your products/services to this group of people for free or at a reduced or subsidised
rate as part of your CSR strategy?
3. Will your target market be able to use your product/service sustainably?
4. Can you partner up with other organisation to reach more people who might not be able to benefit
from your solution otherwise?
5. What steps have you taken to ensure that you are understanding the needs of your customer and
target market?
6. What efforts are you making to get your product to market in the most environmentally friendly
way?
7. Can you think of anything else you can do to make your processes and products more
environmentally friendly?
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10. For how much are you selling?
Hours for learning: 4
Aim: To support new and potential entrepreneurs in knowing the cost structure and the revenue streams
of their business.
Learning Objectives:
‐ To improve the learners’ understanding of the importance of cost structure, revenue streams
and the characteristics of them.
10.1 Introduction
In this section the adult learners are going to learn about the basic finance of their business. More
specifically, there are going to give answer to the basic question: For how much they are going to sell
their product/service?
You can start the introduction of the topic by asking the learners about their thoughts on the basic
sections of the topic: Cost structure and Revenue Stream. This could be a brainstorming activity of 5
minutes. The most important is to write down the key words of their brainstorming and together form
the definition and the highlight points of them.
10.2 Exemplar stimulus & Brainstorm Questions
In order to sum up you can present two videos.
Cost structure ‐ https://www.youtube.com/watch?v=VWxLVD99vGI
Revenue stream ‐ https://www.youtube.com/watch?v=i2frxfkIsFA
Then you can proceed by giving them some basic info about the cost structure and the revenue stream.
i) The cost structure refers to a method to determine how much it will cost a company to manufacture a
product and how much profit will be recognized from manufacturing the product. It typically includes a high
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level categorization of costs, the proportional size of each category and a designation of fixed or variable
cost.
Cost structure is used as a tool to determine prices, if you are using a cost‐based pricing strategy, as well as
to highlight areas in which costs might potentially be reduced or at least subjected to better control. There
are two major cost types for the cost structure. There are the fixed costs, which are costs that do not change,
like the rent, and the variable costs, which are costs that do change, like the cost of materials.
In this unit, you'll learn how a cost structure is set up and how you can create one of your own. In order for
you to be successful at your business, you'll need to know just what kinds of expenses you'll have so you can
keep track of them. This list of the types of expenses your business will have, or has, is called your cost
structure.
ii) A revenue stream is a source of revenue of a company or organization. In business, a revenue stream is
generally made up of either recurring revenue, transaction‐based revenue, project revenue, or service
revenue. There are several ways to generate a revenue stream:
Asset Sale: Selling ownership rights to a physical good. e.g. Wal‐Mart
Usage Fee: Money generated from the use of a particular service e.g. UPS
Subscription Fees: Revenue generated by selling a continuous service. e.g. Netflix
Lending/Leasing/Renting: Giving exclusive right to an asset for a particular period of time. e.g.
Leasing a Car
Licensing: Revenue generated from charging for the use of a protected intellectual property.
In this session we are going to explore the two types of revenue streams available which are either
transaction based or recurring revenues. We will look at revenue streams, developing your revenue model
and types of revenue streams.
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10.3 Subquestions to be completed by AL
You are going to present each sub question by explaining the definition and by giving the example
described below. The most important is to have an interaction with the AL. A good exercise in order to see
if they understand right the meaning of the subquestions is to ask them to answer in each one of them by
using the case study of their business idea.
Cost structure
‐ What are the most important costs inherent in your business?
There are fixed costs like rent, wages, equipment maintenance costs and variable costs like the ingredients,
packaging, service utilities etc. Also, there are one‐time initial expenses of the business such as renovation
of premises, sourcing of equipment, modification of layout, getting electrical work done etc. and the
operating expenses such as rent, business supplies, telephone service, electricity / power bill etc.
Ask the AL to write down all the types of expenses (fixed and variable, one‐time initial and operating
expenses). Having the cost list, the costs with the higher amounts are the most important ones and the
basis of their cost structure.
‐ Which key resources are most expensive?
Key resources deal with the operational end of the business spectrum and define what kind of materials you
need, what kind of equipment is required and the types of people you need to employ.
Use the example of the cupcake shop. There are the ingredients for the cupcake production, the kitchen
equipment used for the cupcakes and of course the wages of the personnel (staff in the kitchen,
administration, secretary, accountant etc.)
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‐ Which key activities are most expensive?
Key activities are the most important tasks a company must carry out in order to fulfill its business purpose.
Key activities may include research and development, production, marketing, sales and customer activities.
In our example, marketing is one of the key activities in the cupcake business. This means that this activity
costs a certain number of money to the company.
Ask the AL to write down all the key activities and calculate the costs. Then they will find out the most
expensive ones.
‐ Which Key Resources represent a significant expense to the business?
‐ Which Key Activities represent a significant expense to the business?
‐ Are the above‐mentioned activities matched to the Value Propositions for your business?
‐ How much revenues are the most cost extensive resources and activities bringing to the business?
‐ How much time do you estimate it will take you to get the complete return of the investment?
Revenue structure
‐ What pricing model will work for your business?
‐ Why your business generate profit?
‐ For what value are your customers willing to pay?
‐ How would they prefer to pay?
‐ How much does every revenue stream contribute?
Revenue Stream (How does the company make money from each customer segment)
‐ For what value are your customers willing to pay?
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In order to answer this question, there are many variables that you have to consider. From the break‐event
point to the competitor’s pricing strategy; there are several points that you have to pay attention.
Use the following example: If you set a price of 10€ for a cupcake, probably the majority of the
customers will not pay to buy it. Why? Because they will consider this value not realistic. How are you
going to set the price? First of all, you have to calculate your break‐even price. This refers to the amount
of money for which a product or service must be sold to cover the costs of manufacturing or providing
it. This has to be the minimum price to sell your product. Next step is to make a competition analysis
regarding their pricing strategy. This means to find out the range of the products’ prices similar to yours.
This research will give you some hints and will help you to set up your final price for your product or
service.
‐ How would they prefer to pay? Tip for AL: Though your business
should allow the choice of establishing
Giving consumers the option to pay with the method they recurring billing through a debit card,
prefer is a simple way to convert more of your interested ACH transfer made directly from a
prospects into customers who, ideally, become frequent predetermined bank account or by
buyers. The more convenience you can offer customers in the credit card.
form of recurring subscriptions, memberships or
replenishment/fulfillment for products used consistently, the
more perceived value you may bring to the relationship — if
you make the process customer‐friendly.
‐ How much does every revenue stream contribute to the overall revenues?
There are different ways for a business to generate revenue streams. The first step is to identify the applicable
revenue streams for the business. The following are some of the most popular revenue streams for
enterprises:
1. Asset sale ‐ This kind of sale refers to the transfer of ownership rights of a physical product from the seller
to the buyer. At Amazon.com ownership rights of a myriad of products such as books, music and electronics
are sold to the buyers.
2. Usage fee ‐ This kind of fee is usually charged by service providers to customers for the use of the service.
A beautician may charge her customer according to the number and nature of treatments the customer
undergoes while under her care.
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3. Subscription fees ‐ When a user requires long‐term or continuous access to the products of a company,
they pay a subscription fee. Hence, a gym may sell a yearly membership subscription to its customer.
4. Lending/ renting/ leasing ‐ Some organizations provide their customers with exclusive rights to their
product for a limited amount of time for a set fee. Upon the end of this period, the organization regains
ownership of the product.
5. Licensing ‐ It is generally used when we are talking about products, services or ideas that fall under the
parameter of intellectual property. This opens up a revenue stream for rights holders, who would otherwise
have had to invest in manufacturing as well.
6. Brokerage fee ‐ When a company acts as an intermediary to ease the communication and transaction
between two or more parties, they charge a brokerage fee. An example of this is when a headhunting firm
matches a candidate to an organization looking for a particular skill set. The firm usually charges a percentage
of the gross salary from the organization, the candidate or both.
7. Advertising ‐ Companies that earn a fee through promoting another organization, product or service,
charge an advertising fee for their service. Traditionally this kind of revenue was common only in the
advertising industry. However, in recent times, with the boom of the internet and e‐commerce, many
websites are also using this as a main revenue stream.
Ask the AL to find the revenue stream(s) for their business, and to calculate how much it contributes to the
overall revenues.
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10.4 Activating examples
10.4.1 Example 1‐ Google
You are going to use the example of Google in order to explain the definition of cost structure and
revenue stream. Start by making a small introduction.
“We all recognize Google as a multinational corporation which specializes in internet based products
and services. It is one of the biggest internet companies in the world and has made an unprecedented
success of its Search Engine Optimization products. It has dedicated fans worldwide and is the most
preferred search engine on the internet.”
The most important is the AL to understand the link between the key activities of a company with the
cost structure of it. Also through the explanation of the revenue stream is important the AL to see the
difference of significance of different types of revenue stream.
Holistically, Google’s cost elements can be divided into four categories which are: R&D, Data center
operations, Traffic Acquisition, and Sales and Marketing.
Google invests deeply into its research and development with the purpose of bringing around improvement
in existing products and constantly creating new and innovative solutions. This expenditure has helped
Google maintain its position at the top despite the typical short‐lived cycles of popularity of most internet
based successes. This has led to economies of scope for Google because it has resulted in a great deal of
product diversification such as Google’s entry into the mobile app market as well as its cloud sharing services.
It is speculated that Google has almost a million servers globally and these servers help process around a
billion search requests daily. Google has invested a great deal into these data centers and they represent a
significant fixed cost for the company. Even the management of these servers’ represents a major cost for
the company. However, due to the high volume of searches these centers process, they are able to increase
economies of scale for the company by optimizing the servers search capacities.
Traffic acquisition costs refer to the money given to the Google Network through its Adsense program or to
websites which redirect users to Google or provide the Google Toolbar to their customers. All these players
help Google in attracting more and more users to its products and services daily.
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