Business Models for the Energy-Agriculture Nexus - Revision history

Janna Schneider: /* Definition of Financial Terms */

2019-11-18T15:26:08Z

Definition of Financial Terms

Rebecca Navarro: /* Common Methods of Capital Budgeting */

2019-09-08T20:49:51Z

Common Methods of Capital Budgeting

Rebecca Navarro: /* Introduction to Business Models */

2019-09-08T20:02:57Z

Introduction to Business Models

Rebecca Navarro: /* Introduction to Business Models */

2019-09-08T19:59:18Z

Introduction to Business Models

Michael Remiorz at 13:28, 25 May 2016

2016-05-25T13:28:48Z

Michael Remiorz at 13:28, 25 May 2016

2016-05-25T13:28:13Z

Stefan Eibisch: Stefan Eibisch moved page Business Models for Projects in the Energy-Agriculture Nexus to Business Models for the Energy-Agriculture Nexus

2016-05-11T15:25:58Z

Stefan Eibisch moved page Business Models for Projects in the Energy-Agriculture Nexus to Business Models for the Energy-Agriculture Nexus

Stefan Eibisch at 12:29, 11 May 2016

2016-05-11T12:29:35Z

Show changes

Admin at 14:39, 10 May 2016

2016-05-10T14:39:52Z

Admin at 14:38, 10 May 2016

2016-05-10T14:38:13Z

Show changes

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 As calculating the costs can be a quite complex issue, the following illustration shows the distribution of cost types that can be divided into two main groups called Capital expenditures (CAPEX) and Operating expenses (OPEX).<br/>
 <p style="text-align: center;">[[File:Cost types.PNG|center|600px|Cost Types|alt=Cost Types]]</p><p style="text-align: center;"><br/></p>
 = Common Methods of Capital Budgeting<br/> =

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 As calculating the costs can be a quite complex issue, the following illustration shows the distribution of cost types that can be divided into two main groups called Capital expenditures (CAPEX) and Operating expenses (OPEX).<br/>
 <p style="text-align: center;">[[File:Cost types.PNG|center|600px|Cost Types|alt=Cost Types]]</p><p style="text-align: center;"><br/></p>
 = Common Methods of Capital Budgeting<br/> =
-Making a decision on an investment of capital can be difficult, especially if a high investment is required, if it is a long-term investment, or if several investment alternatives are available. But using Capital Budgeting can support you in the decision process as it gives you an overview about the eventual returns on investments. By this you will know if the investment will provide a profit after a certain period of time. Further, it helps you identifying the most profitable investment options
+Making a decision on an investment of capital can be difficult, especially if a high investment is required, if it is a long-term investment, or if several investment alternatives are available. But using Capital Budgeting can support you in the decision process as it gives you an overview about the eventual returns on investments. By this you will know if the investment will provide a profit after a certain period of time. Further, it helps you identifying the most profitable investment options.
 There are two principal approaches for assessing the profitability of investment projects: the static and the dynamic approach. Both are subdivided into several methods. In the following, the most common methods will be presented. All of them can be used for comparing several investment options as well as for assessing one individual investment.
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 Microfinance splits the often relatively high initial investment costs into smaller monthly rates. This can make an energy project affordable. But do not forget that you also have to pay an interest on the borrowed money. The interest rates of MFIs vary broadly. If you want to finance your intended project by a loan from a MFI, compare the credit conditions and interest rates of nearby MFIs. To find out if the project is rentable for you, you have to include the capital costs in your calculations with the methods of capital budgeting (see above). That means you have to add the annual interest to the costs for the period of time until the loan is paid back.<br/>
 = Case Studies<br/> =

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 <p style="text-align: center;">{{#widget:YouTube|id=ILLr-uWE4ZE|height=400|width=800}}<br/></p>
 Further information on the mentioned [[MOOC: Powering Agriculture – Sustainable Energy for Food|MOOC: Powering Agriculture – Sustainable Energy for Food]] and related materials you can find [https://gc21.giz.de/ibt/var/app/wp385P/2624/wp-content/uploads/2016/03/PAEGC_MOOC_COMPILED_READER.pdf here].<br/>
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 |-
+|
-Costumer Relationship<br/>
+Customer Relationship<br/>
+|
-Which type of relationship should exist between you and the costumers? Are any costs connected with this?<br/>
+Which type of relationship should exist between you and the customers? Are any costs connected with this?<br/>
 |-

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 <p style="text-align: center;">{{#widget:YouTube|id=ILLr-uWE4ZE|height=400|width=800}}<br/></p>
 Further information on the mentioned [[MOOC: Powering Agriculture – Sustainable Energy for Food|MOOC: Powering Agriculture – Sustainable Energy for Food]] and related materials you can find [https://gc21.giz.de/ibt/var/app/wp385P/2624/wp-content/uploads/2016/03/PAEGC_MOOC_COMPILED_READER.pdf here].<br/>
 = Introduction to Business Models<br/> =
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 Although the business model is a fundamental part of an economic activity, the term is understood and defined in many different ways. To put it simple, a business model describes the core strategy of an organization for how to generate money and by this determines how the company produces, distributes prices and promotes its products.
-Usually all starts with an idea about how to earn money. Ideas might expand further on how to improve livelihood. The crucial point is about offering a product or a service that does not yet exist in the market, but that has a high potential to create value for people who will be willing to pay for the product or service. This idea should be commercially viable and sustainable. It should be noted that also established businesses develop new business models; for instance, optimizing a core process affects the business model. An example is improved energy access e.g. for a diary collection center that is now able to cool the milk and thereby increase the added-value. For developing a new business or a start-up into a long-term successful business, it requires a well-defined business model. One helpful tool for this is the Business Model Canvas template which describes nine basic elements forming a business model. By answering the questions for each key point provided in Table 1 you can specify your individual business model. This is an important step before conducting financial calculations or starting to implement any business activity.
+Usually all starts with an idea about how to earn money. Ideas might expand further on how to improve livelihood. The crucial point is about offering a product or a service that does not yet exist in the market, but that has a high potential to create value for people who will be willing to pay for the product or service. This idea should be commercially viable and sustainable. It should be noted that also established businesses develop new business models; for instance, optimizing a core process affects the business model. An example is improved energy access e.g. for a dairy collection center that is now able to cool the milk and thereby increase the added-value. For developing a new business or a start-up into a long-term successful business, it requires a well-defined business model. One helpful tool for this is the Business Model Canvas template which describes nine basic elements forming a business model. By answering the questions for each key point provided in Table 1 you can specify your individual business model. This is an important step before conducting financial calculations or starting to implement any business activity.
 <br/>
-{| style="width: 100%;" border="1" cellspacing="1" cellpadding="1"
+{| style="width: 100%" cellspacing="1" cellpadding="1" border="1"
 |+ <u>Table 1:</u> Sample questions for defining the key elements of a business model (Osterwalder, 2010)<br/>
 |-
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 An energy project can be the basis for your business and you have to develop the business model according to it. This will of course affect your economic calculations. With the help of specific economic methods that will be explained in this document, you can analyze if such a clean energy solution is profitable for your agribusiness, considering the costs as well as productivity gains.<br/>
 = Definition of Financial Terms<br/> =

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 = Conclusion<br/> =
 *A business model describes the core strategy of an organization for how to gain money. For defining the key elements of your business model, it is recommended to carry out a detailed market analysis.<br/>
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 *Rudolf, S. 2008. [https://university.akelius.de/library/pdf/the_net_present_sascha_rudolf.pdf The Net Present Value Rule in Comparison to the Payback and Internal Rate of Return Methods]<br/>
 [[Category:Financing_and_Funding]]

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 = Case Studies<br/> =
-*[[Business_Plan_for_Solar_Processing_of_Tomatoes|Business Plan for Solar Processing of Tomatoes]]<br/>
+*[[Business Plan for Solar Processing of Tomatoes|Business Plan for Solar Processing of Tomatoes]]<br/>
-*[[Enabling_PV_in_the_MENA_Region|Enabling PV in the MENA Region]]&nbsp;(in Tunisia)<br/>
+*[[Enabling PV in the MENA Region|Enabling PV in the MENA Region]]&nbsp;(in Tunisia)<br/>
-*[[2nd_Powering_Agriculture_Call_for_Innovation|2nd Powering Agriculture Call for Innovation]] to support groundbreaking technologies and business models within the energy/agriculture nexus for emerging markets and developing countries where many farmers and agribusinesses lack access to reliable, affordable and clean energy services.<br/>
+*[[2nd Powering Agriculture Call for Innovation|2nd Powering Agriculture Call for Innovation]] to support groundbreaking technologies and business models within the energy/agriculture nexus for emerging markets and developing countries where many farmers and agribusinesses lack access to reliable, affordable and clean energy services.<br/>
 = Conclusion<br/> =
 *A business model describes the core strategy of an organization for how to gain money. For defining the key elements of your business model, it is recommended to carry out a detailed market analysis.<br/>
@@ Line 219: / Line 221: @@
 *[[Portal:Financing and Funding|Energypedia Financing and Funding Portal]]<br/>
 *Watch the MOOC expert video with Katie Kennedy Freeman from the World Bank: [https://www.youtube.com/watch?v=IUiRC1PsNpU&feature=youtu.be Link]<br/>
-*<span class="mw-headline" id="innovative_finance_for_renewable_energy_solutions">SNV Publication: </span>[[Innovative_Finance_For_Renewable_Energy_Solutions|Innovative Finance For Renewable Energy Solutions]]<br/>
+*<span class="mw-headline" id="innovative_finance_for_renewable_energy_solutions">SNV Publication: </span>[[Innovative Finance For Renewable Energy Solutions|Innovative Finance For Renewable Energy Solutions]]<br/>
-*<span dir="auto"></span>[[Business_Models_for_Solar-Based_Rural_Electrification|Business Models for Solar-Based Rural Electrification]]<br/>
+*<span dir="auto"></span>[[Business Models for Solar-Based Rural Electrification|Business Models for Solar-Based Rural Electrification]]<br/>
 = References =
@@ Line 228: / Line 230: @@
 *Osterwalder, A. 2010. [http://www.businessmodelgeneration.com/downloads/businessmodelgeneration_preview.pdf What is a Business Model?]<br/>
 *HCC. 2009. Lecture 6 Capital Investment and Operational Costs.<br/>
-*Rudolf, S. 2008. [https://university.akelius.de/library/pdf/the_net_present_sascha_rudolf.pdf The Net Present Value Rule in Comparison to the Payback and Internal Rate of Return Methods].
+*Rudolf, S. 2008. [https://university.akelius.de/library/pdf/the_net_present_sascha_rudolf.pdf The Net Present Value Rule in Comparison to the Payback and Internal Rate of Return Methods]<br/>
 [[Category:Powering_Agriculture]]

← Older revision	Revision as of 15:25, 11 May 2016
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 Usually all starts with an idea about how to earn money. Ideas might expand further on how to improve livelihood. The crucial point is about offering a product or a service that does not yet exist in the market, but that has a high potential to create value for people who will be willing to pay for the product or service. This idea should be commercially viable and sustainable. It should be noted that also established businesses develop new business models; for instance, optimizing a core process affects the business model. An example is improved energy access e.g. for a diary collection center that is now able to cool the milk and thereby increase the added-value. For developing a new business or a start-up into a long-term successful business, it requires a well-defined business model. One helpful tool for this is the Business Model Canvas template which describes nine basic elements forming a business model. By answering the questions for each key point provided in Table 1 you can specify your individual business model. This is an important step before conducting financial calculations or starting to implement any business activity.
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 |}
 To be able to answer these questions, it is recommended to carry out market research and analysis. Talk to people who do similar business and ask them to share their experiences. Talk to potential clients and find out what they think about your business idea, and what additional services or product features they would value. The market analysis also includes identifying competitors and characteristics of potential customers, including their willingness to pay. In addition, you have to figure out at what cost you can produce and what profit margin can be reached by selling the product or service.
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 |}
 The general way for a financial analysis is at first to define the total costs and to determine the total revenues. Subsequently, you need to apply one or even more methods of capital budgeting. Additionally, you should answer the questions of Table 1 to come up with a concrete business model. Before discussing the capital budgeting, take a look at the following simplified definitions [HCC, 2009]:<br/>
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 *Rudolf, S. 2008. [https://university.akelius.de/library/pdf/the_net_present_sascha_rudolf.pdf The Net Present Value Rule in Comparison to the Payback and Internal Rate of Return Methods].
 [[Category:Powering_Agriculture]]