Business Model
Business Model
It was written by Teece (2010) that business models are crucial for entrepreneurs at the entry point because it provides them with an operations and value creation mechanisms that would help make sure all its needs are met.
Business Mission
The business will be located in the North Ring area of Riyadh. The total space will be about 22,000 m2.
Target Market
The target market is the general hospitality industry, which includes high-end hotels, cafes and diners around the town. Some of these include Hotel Novotel, Mercure Value Hotel and The Ritz-Carlton Riyadh among others. Among the smaller establishments are White Garden Cade, White Foam and dr. cafes. In time, the business will offer its services to the residential establishments.
Product Scope
The product scope will include a caddy and refuse bin for collection of all the food remains from the hotels. In addition, the firm will provide bio-degradable liners for the bins, which decompose with the litter collected. The waste will then be processed and converted, for instance, into agricultural products such as soil conditioner.
Resources
Core Competency
The firm shall provide a more frequent service (every day) to avoid inconveniencing the client.
The company intends to offer introduce cost-effective rates that would be affordable to the establishments approached (SAR 350).
Key Assets
Waste Trucks – 4
Bins/ Caddies – 2 for every establishment procured
Processing plant
Building
Office Furniture
Financials
Revenue Streams
Subscription fees – The firm will charge SAR 500 for firms seeking its service for the first time in addition to the monthly rates.
Transaction revenue – The rates charged will vary from SAR 300 and above depending on the size of the establishment and frequency of service requirement.
Cost Structure
Fixed costs – Labor (SAR 5000), Rent, (6000) manufacturing cost expenses
Variable costs
Financing/ Funding
The directors will collectively contribute SAR 400,000. Since this is not enough, they intend to secure a bank loan of SAR 610,000 to ensure the startup is complete.
Operations
The office working hours will be Mon – Thur as from 7: 30 am to 5 pm. As for Fridays, the working hours will be 2 – 6 pm. Weekend hours will be determined after operations have commenced.
References
Teece, D. (2010). Business Models, Business Strategy and Innovation. Long Range Planning, 43, 172-194
