... where visionaries, game changers, and challengers discuss business models
Analysing the profits of SME companies, I found out that the ratio between value added and personnel costs is dominant when determining the profitibility of companies (see graphic below).
In other words, a business model that allows personnel to maximise the value added they create, will be most attractive in financial terms.
However obvious this hypothesis may sound, I hardly hear any sensible things about this (too much ado about IFRS, US-GAAP, fair value, impairment and the such).
Main focus on balance sheet, hardly on P&L.
How do you BMGenerators include profitability in your designs?
Actually I would work on cash-flow (CF) level rather than P/L as it is cash return on investment we are interested in. In most businesses the management of cash liquidity is vital, and especially so in new start-ups. One could break each VP into in and out-going CFs, and hence create transparency in terms of liquidity needed for each. Depending on how cash constraint one is, a road of implementation could more prudent be mapped.
I think this has all to do withe the way how you translate the results of the building blocks "revenue streams" and "cost structure" to your internal financial model. The building blocks can deliver the input for a further internal financial transalation.