Introduction to Engines

A big question for micro-business owners. How can I make more money? Or better stated, how can I connect my activities with capturing more value? Those questions, and dozens more require micro-business owners to use their business judgement and problem-solving skills.

Every business has an engine and a business model. These two concepts are different ways of viewing your business.

Engine

An engine is a mathemtical representation of how a business makes money.

An engine isn’t a detailed business plan. It not a cash flow projection tool. It views revenue and costs through the lense of activities, resources, customers, and channels.

It’s a bottoms-up approach for owners without a financial background. It won’t overwhelm owners with a firehose of financial data and hard-to-understand financial terms.

The beauty of an engine is it shows how each part works together as an engine to capture value. It has levers (including a gas petal) just like any other engine.

Business Model

A business model is an oral or written narrative or strategy describing how a business makes money.

A business model breaks a business into nine components.

The business model is where you design a business that reflects your unique competitive advantage. Where you define your core customer segments and develop your marketing strategy. It where you connect your products and services to solving problems or needs of your core customers.

A well-designed and well-tested business model and engine will give a micro-business owner confidence to scale their business, make sound business judgements, know when to purchase equipment, hire employees, and borrow money.

The best part of building an engine is you don’t need a spreadsheet, an accountant, a large block of time, or a large bank account.

The engine is simply a business tool. It doesn’t give advice. It leaves that up to you. It’s your dream, your vision, and your business.