The narrative test and the numbers test

... When business models don't work, it's because they fail either the narrative test (the story doesn't make sense) or the numbers test (the P&L doesn't add up). ...

[Why Business Models Matter, Joan Magretta, Harvard Business Review, 1 May 2002]

Written as the smoke was still swirling from the dotcom disasters of 2000/2001, this Harvard Business Review paper remains one of the most insightful discourses on the centrality of the business model to modern commerce. It is covered in more detail at the Business model page.

At Wingarra BMI, we specialise in assisting clients to build business models which meet both the narrative test and the numbers test, and which can be tested against a wide range of possible future scenarios. To do this, we work with clients to undertake both qualitative and quantitative assessments of proposed business models.

Qualitative assessment

Our approach to the qualitative assessment of proposed business models involves assessing their suitability for purpose in the face of existing, and possible or likely future, global, national, regional and industry trends. If requested by the client, this phase can also include a structured process of generating ideas about possible new business models which might better suit the relevant business and its circumstances.

Please proceed to the Business model analysis - qualitative page for more information about this process.

(Some clients, because they have undertaken their own exhaustive research in respect of industry positioning and trend analysis, might elect to skip the qualitative phase and go straight to the quantitative phase in which robust models are developed to fully test all aspects of business models which have already been signed off or locked in.)

Quantitative assessment

Our approach to quantitative assessments involves the development and use of sophisticated, customised financial feasibility analysis (FFA) models. Being customised to the particular circumstances of each company or project, these models caly in structure and content. Most modelling assignments, however, involve the design and construction of some form of 5-year financial projection (5YFP) model, and possibly a life cycle comparative cost (L3C) model.

Please proceed to the Business model analysis - quantitative page for more information about this process. That page also links to much more specific information about, and examples of, a wide range of Wingarra BMI models as follows:

• Financial models - financial projection models
• Financial models - customisation examples
• Financial models - general examples
• Financial models - renewables energy projects
• Financial models - life cycle comparative cost (L3C) models
• Financial models - budgeting models.