How to capture sufficient revenues from your innovation to get to a profitable business case that can sustain and grow
Inclusive innovations need a business model that will help them thrive in the challenging conditions of low-income markets. This means that as an inclusive innovator you need strong business and entrepreneurship skills so that you can make the difficult decisions and face the tough risks that come with launching your own business. In module 1 we introduced the DNA of an inclusive innovator and, in the modules after that, you practised with the design and validation of your business idea. In this module, we will guide you further in finding your business acumen. A fundamental part of this is that you know how to generate sufficient money from your innovation.
When selling to BoP consumers with limited purchasing power it is essential to think creatively about the price point and payment method for your product or service. You can improve your odds of business success greatly through clever revenue models that establish a stable profit. Therefore, we will first look at how to select the revenue model that is most suited for your innovation. In the second half of this module, you will be introduced to a preliminary financial assessment exercise which will help you project your finances and evaluate the viability of your business idea.
Complete this module and you will understand why:
- Innovators are not necessarily entrepreneurs. In order to launch and grow your ideas, you need to develop a business acumen. Financial capabilities are key.
- Traditional direct cash sales models have limitations in BoP markets. You will require innovative pricing and revenue models to circumvent consumer finance barriers.
- Selecting the right revenue model(s) for your business increases your chances of financial viability on the longer term.
- There are various approaches for growing your business but each approach has risks. You may not want to rush into scaling but focus on making your innovation a success in your current market first.