Dec 10

The SaaS Business Model – double revenues with incremental improvements

By Eckhard Ortwein | Business Model

LeanCase WinningbyDesign

The SaaS Business Model and the power of incremental improvements 

This post illustrates how incremental improvements along the Customer Lifecycle of a SaaS Business Model can result in massive changes of outcome for revenues as well as profitability.  In Customer Lifecycle models  revenues are not the sum of deals, but the product of conversion and expansion rates, creating "multiplicative" instead of "additive" impact. We describe which time, conversion, volume and financial metrics are required to capture all assumption for the business model. Learn how you can more than double your revenues by improving key metrics only between 10% and 15%.

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Sep 29

Unit Economics – Do you have a viable business model ?

By Eckhard Ortwein | Business Model

Unit Economics: Is Customer Lifetime Value > Cost of Customer Acquisition?

This post provides Entrepreneurs, Business Managers and Investors provides a simplified model and an introduction to Unit Economics enabling you to validate if the business model for any SaaS or subscription/recurring revenue business is viable.Unit Economics answer a key business question:  Is the Lifetime Value of a customer significantly higher than the cost to acquire a customer? We also have a look at various factors, how they can impact unit economics and how you can check your unit economics in 7 steps. Why is this so relevant? Only if you get your unit economics right, you can invest funds into scaling your business. 

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Sep 16

What is a Business Model ?

By Eckhard Ortwein | Business Model

What is a business model

What is a Business Model and what turns a Business Model into a Business Case?

A great business model describes your business logic and supports it with meaningful numbers and metrics. However, most business model approaches are very thin (not even lean) when it comes to numbers and metrics. They don't lay out activities to quantify assumptions or even suggest meaningful benchmarks. So, what is a business model? This post proposes a business model framework taking the best elements of a few approaches and allowing you to capture your assumptions in a structured manner. We describe what turns a Business Model into a Business Case and how you can easily quantify your assumptions. Discover a completely new way of how to create a business case.

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Feb 14

75 Best Practice SaaS Benchmarks for your Business Case

By Eckhard Ortwein | Benchmarks

75 Best Practice SaaS Benchmarks for your Business Case

Facing reality - using Benchmarks in SaaS Business Planning

This post provides SaaS entrepreneurs, Business Managers and Investors with an overview of top resources for SaaS and Software benchmarks.Across those resources, we have selected 75 best practice benchmarks to make reasonable assumptions in numerous situations … when creating your SaaS business case, when finding the right growth strategy, when trying to understand your performance or reviewing an investment proposal. You can access all these benchmarks plus many more online in the Lean-Case Benchmark portal. They help you to face reality. You can apply benchmarks - either to vet your business model assumptions or to measure your actual performance against peers. 

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Aug 01

Business Plan: getting started

By Eckhard Ortwein | Business Model

business plan examples

Every business needs a business plan. It’s a document that describes the future of your business and describes what you plan to do and how you plan to do it. But it’s easy to confuse a business plan and a business model. In this article, we’ll explain what a business plan is, why you need it, and compare business model vs business plan to help you understand the difference.

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Jul 31

Business Model Examples

By Eckhard Ortwein | Business Model

business models examples

Business model is the best top-level view tool for your business because it allows you to have all core elements in front of your eyes. It describes how your business makes money and explains how you deliver value to your customers at an appropriate cost. Business model is important for both emerging and established companies because it shows where the business is headed and how it will get there. The goal of creating a business model is to outline a strategic vision that objectively assesses the possibilities and challenges of a specific business in a summary form.

Business model development is a crucial part of formulating a meaningful business strategy. The good news is that you don’t have to invent an entirely new business model to start a business. In fact, the vast majority of businesses use existing business models and refine them to find a competitive edge. In this article, we talk about different business model examples and explain how to make a business model for your company.

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Jul 31

Cost per acquisition (CPA) and customer acquisition cost (CAC)

By Eckhard Ortwein | Lean-Case

cost per acquisition

Cost per acquisition (CPA) and customer acquisition cost (CAC) are often used interchangeably but that’s wrong and in reality they’re completely different metrics. These metrics are essential to the health of your company and they shouldn’t be confused because mixing them up can result in a failure.

In this article, we’ll compare CAC vs CPA, explain the difference between these metrics, and provide you with cost per acquisition formula. You will also learn how to calculate customer acquisition cost.

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Jul 29

TAM, SAM, and SOM: fundamental market size metrics

By Eckhard Ortwein | Business Models Essentials

tam sam som

When you are starting a new business and are calculating its profit potential or are setting a revenue goal for your company when making a business plan, it’s crucial to root these figures. That’s why you need to perform a market analysis and assess the market potential for your products and services. In other words, you should start from TAM, SAM, SOM. These are the metrics that investors look at when making their investment decision.

Wondering what these abbreviations mean and why they are useful to investors when assessing an investment opportunity? Keep reading.

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Jul 18

What Is the Business Model Canvas and How to Use It

By Eckhard Ortwein | Business Model

Business model canvas

Business Model Canvas is a strategic management template for developing new business models or documenting and improving the existing ones. It’s a visual chart that helps companies align their activities by illustrating the potential trade offs. This visualization method is applied in leading companies and startups worldwide and you can also use this great tool to improve the focus and clarity of what your business is trying to achieve.

You don’t need tens of pages of a traditional business plan to understand the intricacies of your specific business. Instead, you can create the Business Model Canvas that will explain the core elements that drive your business in a single page. In this article, we’ll dive into details of this visualization method and compare it with Lean Canvas template.

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Jul 18

SWOT Analysis and its Use in Business Planning

By Eckhard Ortwein | Business Model

SWOT analysis

A SWOT analysis is a powerful tool that can help you develop a strong business strategy. Doing a SWOT analysis doesn’t take much time, but it allows you to think about your business in a new way – discover new opportunities, manage and eliminate threats. It’s actually a plan of action for moving forward, in the context of the current situation of your business in the changing environment.

In this article, we will explain what a SWOT analysis is, and give you some tips on how to do a SWOT analysis.

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Jul 10

What Is Customer Lifetime Value (CLTV) and How to Measure It

By Eckhard Ortwein | Lean-Case

Customer lifetime value

CLV, CLTV or LTV is one of the most important metrics for growing companies which can help you understand a reasonable cost of customer acquisition. Roughly defined, customer lifetime value (CLTV) indicates the total revenue minus rlated cost a business can expect to generate from a customer in the course of business relationship. CLTV compares customer’s revenue value to the company’s predicted customer lifespan and allows businesses to identify significant customer segments that are the most valuable to them. Whether you have a traditional offline business, a fully digital business like SaaS or some combination of the two, calculating your CLV can help you make smarter decisions about your marketing and sales budgets and bring better returns on your investments.

In this article, we’ll briefly cover how to calculate CLTV and how to get started with CLTV analysis.

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Jun 30

Series A funding: a Guide to Help You Succeed in Raising Capital

By Eckhard Ortwein | Investor

Series A funding

Every new business needs money to get it off the ground and to grow. So a significant part of your effort as a startup owner will be raising funds. That’s why understanding the basics of raising capital will be critical to your success. In this article, we will discuss startup funding stages that every entrepreneur should know. You will learn about the specifics of series A funding and the difference between angel investing vs venture capital.

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Jun 30

Direct Cost and Cost of Goods Sold (COGS)

By Eckhard Ortwein | Investor

direct cost

Tracking business expenses is very important for business owners. It allows you to improve money management and monitor the growth of your business, plays a crucial role in calculating profitability, and can help you attract investors. This article covers two key metrics which you should track on a regular basis – direct cost and cost of goods sold (COGS).

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Jun 30

Cash Burn Rate – a guide to use this metric in business planning

By Eckhard Ortwein | Investor

cash burn rate

Burn rate is a simple metric that every entrepreneur must be familiar with because, if calculated correctly, it’s crucial for planning, growth, and the success of any business. It is used to measure sustainability or how long a company can operate until it runs out of money. But what exactly is cash burn rate and how can we calculate it? Keep reading this article and you will find answers to these questions.

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