How an ice cream shop actually works

Dot owns an ice cream shop called Dot Scoops. She knows she makes really good ice creams but the ice cream shop is not doing that well.

Clara is a business advisor, who specialises in clarifying business problems so that her clients can do something about them.

In their first session together, Clara asks Dot to explain her business model.

“Well, I make ice creams and I sell them”, says Dot. “It’s called Dot Scoops – cool name, eh? And the ice creams are really good, and reasonably priced. I really thought it would make a profit, but it’s burning through my savings.”

“So, it’s like this is it? The gold boxes are things, like ice creams and profit. The green box is your action, making and selling.”

“Well, no”, says Dot. “You’ve left out the customers who buy the ice creams and eat them. I’d have no business at all without customers.”

“That’s true”, says Clara, “so how about this?”

“Yes, that’s it” says Dot, “but wait. Why have you shown used by in a dotted line? That’s the most important part of the business.”

“You’re right. It is the most important link of your business model, Dot” says Clara. “I show it in a dotted line because you have no control over it. It’s what you hope will happen, but it’s totally up to your customers whether or not they buy and eat your ice creams. Just like you get to decide how to use the payments that flow back into your business – but we’ll get to that.”

“I thought people would just buy the ice creams. Everyone loves ice cream.” says Dot.

“What makes you think people should buy your ice creams, Dot?” asks Clara. “Is being really good and reasonably priced enough?”

“Well no, they make you feel good? Cool you down on a hot day? Stop your kids nagging you?” says Dot. “Let’s call those benefits”, says Clara. “Sounds like you’re not exactly sure what they are. How’s this now, as a map of your business model?”

“It’s looking good but you know, it’s the costs that are killing me” says Dot. “The rent and the power, all the costs to set up, and all the ingredients.”

“Okay so how is this for a picture of your business model?” asks Clara.

“Well, that does look a lot like my business model” says Dot, “but it also looks like the business model for every ice cream shop!”

“Boom!” says Clara. “I hoped you would say that. Now we’ve agreed the key elements of your business model, and how they interact, at least in theory.”

“In our next session, we’ll use this to look at how your particular business works.”

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