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3C 4 INCUBATORS

Business Model

3C 4 INCUBATORS
Business Model

Published by: 3C 4 INCUBATORS


Coordinated by: Lazio Region
Co-financed by: MED Programme - European Regional Development Fund
October 2014
www.3c4incubators.eu

CHAPTER 1
THE OBJECTIVE OF THE CAPITALIZATION PROJECT
This work originates from the different experiences with success in former UE projects.
The objective is to capitalize on the former projects outputs, creating a broader vision.
By this more complete vision, we hope to make a contribution to Cultural and Creative SMEs, to Enterprise
Incubators and to SMEs tutors.
The final aim is to enhance the ability to generate business models in a balanced and complete way and
also to focus attention to the relationship between SME/territory and individuals.
The conclusions of this document also provide some proposals about the role of a new model of Cultural
and Creative Incubators, and describe the context in which the present work could be used.

This document is designed to be


A PRODUCT ORIENTED TO SUPPORT DIRECTLY CULTURAL AND CREATIVE SMEs IN GENERATING NEW BUSINESS IDEAS
A
 SET OF INSTRUMENTS AND TOOLS FOR THEIR ACTIVITY
A PRODUCT MAINLY USED BY CULTURAL AND CREATIVE SMES but also by their tutors.

CHAPTER 2
THE OUTPUTS TO CAPITALIZE
2.1 COMPUTERIZED INNOVATION AND INTERNATIONALIZATION
CAPACITY AUDIT METHODOLOGY FOR SMES
WHAT IS THE OUTPUT
The effective deployment of innovation has been widely recognized as a means of building a sustainable
competitive advantage and thereby enhancing organizational performance.
A focus group discussion of senior executives from innovative and internationalized firms in Western
Greece was conducted to test user understanding of the initial version of the framework. Revisions were
made based on their comments.

TARGETS
The capacity audit methodology was conceived for:

SMEs

MAIN GOAL OF THE OUTPUT


This deliverable is a methodology setting specific criteria, defining key-sectors (organization staffing quality
accumulative knowledge infrastructure competitiveness efficiency finances - etc.) and providing a
concrete process for assessing an SMEs relevant potential.
The questionnaire consists of 13 sections: sections 1 to 11 consist of the innovation audit capacity for SMEs
while sections 12 and 13 consist of the internationalized audit capacity of SMEs.
In sections 1, 2, 3 and 4, executives that answer the questionnaire are asked to rate their capability with regard
to several specific subjects. The ratings can range from 1 (very poor) to 5 (extremely high). The executives may
also choose to rate their capabilities with three middle rates 2 (poor), 3 (middle) and 4 (high). The respondents should add the number five (5) to the selected answer if it can take the gravity rate 5, the number one (1)
to the answer that can take the gravity rate 1 and the same for the rest of the rates.
In sections 5 to 13, the executives have to answer YES or NO to relevant questions that test their capability
in specific sections. The respondents should add the number one (1) to the selected answer and the number zero (0) to the answer that does not constitute an answer that describes the enterprise.
All sentences should be answered by the respondents. In case some sentences are not applicable to the
relevant enterprise the answer to these specific sentences is NO.
The questionnaire should be answered by the general management of the enterprise.
According to availability, a convenient method to get the answers to the questionnaire is during the implementation of the Social Consultation Territorial Focus Groups Sessions.

The sum of the rates of each SMEs accumulated answers show the final score of this group of questions
in relation to the maximum possible score of the same group. The final scores of each group of answers
have been aggregated and hence we have an overall rating of the enterprise.

2.2 T
 OOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL
ENTERPRISES (ICE)
The Toolkit is a paper guide that collects specific reflections, guidelines and tools (formats) based on the
most relevant management needs of cultural SMEs.

TARGETS
The Toolkit was written for:

Tutors of cultural enterprises

Cultural Managers

Cultural Entrepreneurs

MAIN GOAL OF THE OUTPUT


How to emphasize the particular strengths of a cultural enterprise?
How to avoid business failure risks due to certain starting point weaknesses?

The Toolkit for Cultural Enterprise Incubators aims to give a contribution to the former questions in terms
of reflection, approach and managerial instruments.

As final results of all these contributions, the Toolkit proposes 4 kinds of tools.

Starting from the above listed needs, the Toolkit proposes specific tools to manage a cultural business.
Coherently
with the framework
former
described and
order to reduce the cultural enterprise
It is possible
to identify
4 categories
ofintools:
weaknesses and to promote the strengths.

MANAGEMENT TOOLS
Portfolio,
Project Management,
Buying Policies,
Financial Plan,
Training

INNOVATION
TOOLS
Problem Solving

STRATEGIC
TOOLS

COMMUNICATION
TOOLS

Business and
Marketing Plan +
Networking

Communication Strategy
and Plan,
Evaluation of Results

2.3 CREATER PILOT PROJECT OUTPUTS (CREATIVE GROWTH)


CREATER CREATive growth in Emilia-Romagna (Crescita Creativa in Emilia-Romagna) - is a support path for
creative businesses as a pilot project within the EU project Creative Growth. CREATER consisted of a six17
INTRODUCTION
month programme exclusively developed to support start-ups from the CCI sector based in Emilia-Romagna.

10

WHAT IS THE OUTPUT


CREATER supported start-ups through the following services:

Advisory services:
- Advisory services are mainly implemented during direct meetings (at least 3 during the period) and
through back office activities (40 hours for each group)
- Advisory services include: A check-up of the companies needs, activity planning, direct support with
specific issues (writing a business plan, participating in a call for proposals, communication etc.)
- The tool Creative Enterprise Trajectory
Training Sessions on Business Management
On-demand consultancy: 16 hours of consultancy with an external expert
Networking services
- Each company is associated with a mentor start-up
- Contact identification among possible customers and suppliers
- A one-day networking event Create The Net to enable start-ups to meet with peers and possible
partners
- Inclusion of companies in the start-up community and in initiatives dedicated to them

TARGETS
N
 ew businesses in the creative sector based in Emilia-Romagna (i.e. music, entertainment, media, communication, cinema, audio-video, literature, design, amusement parks and visiting places)
N
 ew businesses in other sectors, but with an application in the creative sector

MAIN GOAL OF THE OUTPUT


D
 evelopment of a support path for creative businesses based in Emilia-Romagna:
- Identification of companies needs
- Analysis of partners experiences and tools
- Development of a service offer
T
 est of the path on a selection of businesses (10 enterprises/projects)
P
 romotion of the selected enterprises in Emilia Romagna region through a public event

2.4 MODEL 2INS BUSINESS PLAN 2INS CLUSTERS


WHAT IS THE OUTPUT
The output is a useful and ready-to-use model, that can be used by SMEs to assess their current status and
identify development strategies.

TARGETS
The model business plan has been conceived for:

SMEs

11

MAIN GOAL OF THE OUTPUT


In order to anticipate changes envisaged by the market, to adapt to the changes that have already occurred,
to help the company reduce the environmental impact, and to become more competitive, each company
passes through a necessary evolution.
Why should a company which intends to innovate or internationalize prepare a business plan? Both to
analyse its own project and to involve stakeholders in the process of changing, so as to search for partners
or donors, etc. Subjects will try to understand the necessary information to express this change. In order to
choose such necessary information, it is fundamental to understand the meaning of innovation and internationalization processes, to identify which direction to go, and to foresee the future. We hereby identify
these necessary pieces of information.

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CHAPTER 3
CULTURAL ENTERPRISE, TERRITORY AND INDIVIDUALS
The business model for Cultural and Creative SMEs (henceforward C&C SMEs) is inspired by particular
themes that make this issue very different in comparison with others industries.
In this case we need to consider how the business dimension could be merged with:
the territory
the individuals living in or visiting the territory
There are many factors that could play a relevant role, in terms of relations, added value, and innovation.
Cultural and Creative Products/Services cant be assimilated into ordinary products/services. In this specific
case, the central issue is not to satisfy a delimited requirement or to make functional a match between demand
and offer. The true challenge for a cultural and creative business model is to stimulate and give value to a
relation system.
The relationship between C&C SMEs, the territory and the individuals (living or visiting the territory), have
to be a two-way relation. The output for everyone is something more than the pre-existing condition,
linked to the experience.
An experience that produces new ideas, sensations, innovation for everyone (C&C, SMEs, Territory and
individuals). However, this two-way relation is only potential, it needs to be activated.
The business model has to facilitate and contribute to the first business idea and the necessary factors to
exploit this potential.

3.1. CULTURAL SMES AND TERRITORY


The Territory is composed of:
institutions
education system
cultural resources
other enterprises
financing system
enterprises/ideas incubators
physical environment
infrastructures

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Examples of the two-way relation could be the following:


THE C&C SMES
COULD GIVE

SUBJECT

THE C&C SMES


COULD RECEIVE

institutions

ideas/projects
people that manage or take care of public resources
activities that make the territory valuable and
attract people or investors
recovery of degraded areas
enhancement of traditions, events or others
public resources


authorization
sponsorship
funds
law opportunities
spaces/locations
involvement in events


education system

ideas/projects
trainers
innovative education tools


skilled people
expertise
business assignments
opportunity to experiment
research and development opportunities


cultural resources

ideas/projects
people that manage or take care of specific tasks
activities that make the resource valuable and
attract people or investors
recovery of degraded resources


spaces/locations
inspirations
involvements in events


other enterprises

ideas/projects
expertise
innovative management tools
innovative customer relation tools
new products/services/solutions


sponsorship
funds/equity
supply opportunities
business assignments
expertise
opportunity to experiment
research and development opportunities
distribution channels
access to new customers


enterprises/ideas
incubators

quality and visibility if the C&C SME is innovative


expertise
opportunities to build new projects and
partnerships with other networks of incubators,
enterprises, etc
opportunity to test/experiment
the reason in support of the incubator


information
orientation
consultancy
tools
locations
ideas
networking opportunities
business acceleration
access to financing measures


financing system

ideas/projects
expertise
innovative management tools
innovative customer relation tools
new products/services/solutions


sponsorship
funds/equity
business assignments
expertise
distribution channels
access to new customers


physical
environment

activities that make the territory valuable and


attract people or investors
recovery of degraded areas


inspiration
location
scenarios for the delivery of C&C solutions


infrastructures

Innovation


distribution channels
location
scenarios for the delivery of C&C solutions


There is also another intangible exchange that is worth exploiting: to give/receive inspiration and a unique identity.
A C&C business model has to provide orientation about the needed elements to activate the long list of
relations provided above.

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3.2 CULTURAL SMES AND INDIVIDUALS


The C&C SME cannot be a separated entity, the relationship with the individuals is the first impetus for the
business idea and the organization.
The individual is not simply a customer but is also a source of information, inspiration, ideas, and identity.
The individual that enjoys a C&C product/solution receives new experiences (or emotions) and gives experience back to the SME, if that organization is able to take it.
This experience could become a new idea, if the SME is able to understand it and to get the weak signals.
In order to achieve continuous learning from individuals it is necessary to have tools, and first of all, knowledge. For a C&C SME, the expertise of a sociologist, a psychologist, and a cultural anthropologist is important. These are very particular roles for a business organization, but, in this case, they offer very useful
knowledge about the local culture and its understanding, allowing us to predict or to supply new ways of
expressions (new offers/solutions from the SME side).
This ideal relationship between C&C SMEs and Individuals also engenders a particular kind of performance
measure: the well-being index.
It will be useful to provide the C&C business model with elements that can help the SME to identify how to
create and develop an effective relationship with the territory individuals (living and visiting people).

3.3 THE RELATION MANAGEMENT


Therefore, a C&C business model has to acknowledge all the elements that can create a new Relation Box
in the territory, with individuals and public and private organizations.

DURATION'

ce
)'
om VA
er LU
'Ex E'
pe
rie
n

As#is#

us
t

To#be#

(C

interac/ons'

Number'of''

The drivers of this relation are:


number of relations
duration
value

A C&C business model has to identify what the necessary factors for creating a relationship are. The management of C&C business has to develop these 3 factors, in a balanced way.

15

CHAPTER 4
BUSINESS MODELS AND MANAGEMENT TOOLS
4.1 CULTURAL INCUBATORS BUSINESS MODEL, CULTURAL
SMES AND MANAGEMENT TOOLS: A UNIQUE SYSTEM
The mission for a cultural incubator is to promote not only cultural enterprises or business, but to develop
a cultural business system.
This system could be based on:
enterprises
private and public organizations
territories
or could be the mixed result of a network composed of all these different entities.
In all these cases an incubator needs to:
a dvise a cultural SME in the phase of idea generation (by experiences, business models, and using a
coaching approach)
s upport the SME in a more technical way during the start up phase (by business plan tools, management
education, networking facilities, including financial networks)
a ccompany, pragmatically, the SME during the early management phase (by incubation, training, tutoring, tools)
facilitate the expansion phase, when the enterprise will leave the incubator because it is able to carry on
cultural business independently (by activating the right strategic lever e.g. internationalization, technology
growth, business model evolution etc)
The following picture shows in more detail this sequence, which can be defined as an Incubation Model:

Business angels
Crowdfundig
Venture capitals
Public finding

Creativity
Rave

Innovation\Internationalization support

Design thinking
methodologies
Playful multidisciplinary
workshops
Entrepreneurial
assessment
team building (ex
managers, designers,
technicians, venture
partnerships)
Psychological
assessment
Team alignment
assessment
Motivation support

Productt analysis

Boot-camp
(Max 6 months)

Sunstainabe Development Resilience Urban


regeneration

Idea Generation

Quan%ta%ve)and)Qualita%ve)monitoring)and)Repor%ng)
)in)order)to)establish)and)mantaing)trust)between)SME)and)Incubator))

16

In order to be effective in developing each phase, this model has to use business models and tools containing
the following requirements:
customized for cultural business,
able to give answers at all 4 stages (idea, start up, early stage, expansion)
flexible,
usable by enterprises and incubators tutors.
Our work and this report is focused on two contributions for a cultural incubator (and, obviously, for a
cultural enterprise too):
the business model for the cultural enterprise
the management tools for the cultural enterprise
A deep understanding of the cultural enterprise business model is a pre-requisite for the cultural incubator activity.
By this strategic model the incubator can make it possible to understand the following:
INCUBATION
STAGE

CONTRIBUTION FROM CULTURAL BUSINESS MODEL

MANAGEMENT TOOLS

Idea
generation

Better comprehension of cultural ideas proposed by aspiring


entrepreneurs (are they simply ideas or business ideas?)
Possibility of selecting enterprises to incubate with higher synergy. By means of various kinds of collaborations, a company could
reinforce the business model of other incubated enterprises

selection of appropriate management tools


to satisfy business model requirements

Start up

clear identification of critical management areas to establish

selection of appropriate management tools


to satisfy business model requirements

Early Stage

clear identification of critical management areas to reinforce

selection of appropriate management tools


to satisfy business model requirements

Expansion

clear identification of critical management areas to develop

selection of appropriate management tools


to satisfy business model requirements

After dealing with these strategic matters, it is possible to reach a good definition of what the enterprise
business model is, at the moment, and has to be, in the future.
To be aware of this perspective, it must be allowed for the enterprise and for the tutor, to select the right
management tool in order to establish, reinforce and develop specific business model elements.
The following picture describes the relationships among the incubator business model, enterprise business
model, and management tools.

17

It is possible to identify 3 levels:

1st level
The incubator business model is the container, the ideal micro-environment in which the enterprise
could develop from idea stage to development stage.

2nd level
The cultural SME business model, is the way to understand the idea, its soundness, the path from the stage
idea to the following stages.
The enterprise business model helps the incubators tutor focus on real strategic requirements.
It is also a perspective from which to analyse the cultural businesses/enterprises to gather into the incubator. By this it could be possible to create a cultural system and not only to rent spaces to several enterprises. The objective is to select SMEs with synergizable business models.

3rd level
The management tools represent the operative level, which must be activated only after a clear understanding about business models requirements in order to select the appropriate tool. The tool is simply a tool, it
can produce results only if it is used to provide solutions for the right need.
A summary of this approach could be:
Incubator business model as general container and road map
Enterprise business model as priority perspective for the incubator to understand cultural business
status and identify ways to develop it.
management tools as instruments (for tutors and enterprises) to reach the required development of the
enterprise business model
In the following sections of this book a customized business model for cultural enterprise will be presented.

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CHAPTER 5
CULTURAL SMES BUSINESS MODELS
5.1 A BUSINESS MODEL FOR CULTURAL AND CREATIVE SMES
What is a business model? A good answer is the following:

!THE$ARCHITECTURE$THAT$ENABLES$A$SME$TO$
!

ACQUIRE(

CREATE(

DELIVER(

!VALUE(
What is Value?

( FOR
PROFITS
SMEs

EMPLOYEE
SATISFACTION

SOLUTIONS FOR
CUSTOMERS

The need to have a sound business model could be better specified by the following points:
to have a cultural resource does not mean having a (cultural) business idea
to have a business idea does not mean having done business

19

These points are especially true for cultural businesses, because the specific characteristics of C&C SMEs
can generate needs to manage:

It is possible to propose useful management tools in order to manage these needs, but it is more useful to prevent
failure risk, from the very early stages of a cultural/creative enterprise, by focusing on a detailed business model.
An interesting approach to this is made by the Business Model Canvas.
This approach proposes a strategic management template for developing new business models.
It is a visual chart with elements describing a firms value proposition, infrastructure, customers, and finances.
It assists firms in aligning their activities by illustrating potential trade-offs.
The Business Model Canvas was initially proposed by Alexander Osterwalder based on his earlier work on Business Model Ontology. Since the release of Osterwalders work, new canvases for specific niches have appeared.
In this document we developed a cultural version. The aim is to create a framework for entrepreneurs and
tutors, easy to use but, at the same time, covering all the strategic keys that a cultural/creative SME has to
understand to start with a business or develop it.
The Business Model for C&C SMEs, proposed in the following pages, is a way to create cultural and creative
business ideas:
sound,
balanced,
and aware
The business model will help entrepreneurs and tutors define specific + strategic + critical factors enabling
cultural SMEs to acquire, create, and deliver value. There are seven factors:
1. Value Proposition
2. Customers
3. Customer Relationships

20

4. Channels
5. Key activities
6. Key resources
7. Key partners
Factors 2, 3, 4 are related to revenue creation.
Factors 5, 6, 7 generate costs or are related to cost optimization.

Alexander Osterwalder Business Model Canvas


In the following section of this document for each strategic key factor of the business model, we will provide:
theory pills
checklists helping to define the contents of key factors
links to tools that allow one to pass from the Business Model level (strategic thinking) to the related
Management Tools level

5.2 BUSINESS MODEL KEY FACTORS: CUSTOMERS

A business model may define Customer Segments. An organization must make a conscious decision about
which segments to serve and which segments to ignore. Once this decision is made, a business model can
be carefully designed around a strong understanding of specific customer needs.

21

The customer needs will, of course, be strictly linked to Value Propositions but also have a very deep impact not
only on communication and distribution policies, but also on internal choices, like Key Activities and Resources.
The careful definition of the Customer targets will influence the overall business model.
In order to reach an effective relationship with the territory, the C&C SME could have a good part of its
customer portfolio comprised of subjects located in its territory.
It is possible to assess if ones business model is sound enough with regard to Customer Segments with
the help of the following checklist.

How to build a sound and aware Business Model for a cultural and
creative business:
Key Factor 1 - Decision About Customers:

KEY QUESTIONS

NOT THE
CASE
OR NOT
ENOUGH

MAYBE,
BUT IT
WOULD BE
BETTER TO
REINFORCE
THIS POINT

ABSOLUTELY
YES

1. Are we able to give to the customer new solutions? Can we discover


unsatisfied customer needs? (Is our offer related to new usage circumstances for cultural resources? Is our offer related to new use functions for
cultural resources? Are we working in a growing trend business?)
2. Are they willing to pay for our offer? Are they willing to pay enough? Will
they pay at least 30% more than our production cost? Which aspects of our
offer are really valuable? Are we really able to make intangibles profitable?
3. They could find other ways to satisfy their cultural/creative need (substitutes product/services)? Are we competitive/different in other ways?
Also in the medium-long term?
4. Have we chosen a good customer portfolio? If a target group would have bad
performance could another target group balance it? When a target group is
in a low sales season, is another one in a high sales season? If a target group
has a long payment cycle, does another one have a short payment cycle?
5. Have we chosen a good customer portfolio? Is the strategy that we have
to carry on in order to satisfy a target group compatible with other strategies planned for other target groups?
6. Have we chosen a good customer portfolio? Is it possible to exploit synergies? Can we reach more than one target group with the same communication or distribution channel?
7. Have we created a good customer portfolio with subjects located in the
territory? (e.g. institutions, education system, enterprises, individuals)

Are you satisfied with your Customer Segments?


Is this a strong point of your business model?
Do you need to reinforce any aspect of it? If necessary, take a look at the following management tools:

22

Management Tools Useful to identify Customer Segments


MANAGEMENT TOOLS

WHY USE IT?

TOOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL


ENTERPRISES ICE
3. Long Financial cycle
3.3 Business plan

In order to estimate the economic contribution


to the company income generated by customers.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
3. Principal component loading matrix for technology acquisition and exploitation

To assess specific innovation customer needs.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
9. Marketing capability
9.1 Relationship of management with major customers

To assess specific innovation customer needs.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
9. Marketing capability
9.2Knowledge of different market segments

To assess specific innovation customer needs


and identify new international segments.

MODEL 2INS BUSINESS PLAN (2INS Clusters)


3. Market Perspectives
3.1 Analysis of the size and trend of the reference market

To assess specific customer needs and identify


new markets.

5.3 BUSINESS MODEL KEY FACTORS: VALUE PROPOSITION

The business model has to describe the bundle of cultural and/or creative products and services that create
value for a specific Customer Segment.
The Value Proposition is the reason why customers turn to one company rather than another.
It solves a customer problem or satisfies a customer need.
Each Value Proposition consists of a selected bundle of products and/or services that cater to the requirements of a specific Customer Segment. In this sense, the Value Proposition is an aggregation, or bundle,
of cultural/creative benefits that a company offers customers.
It is possible to assess if your business model is sound enough with regard to Value Proposition with the
help of the following check list.

23

How to build a sound and aware Business Model for cultural and
creative business:
Key Factor 2 - Decision about Value Proposition:

NOT THE
CASE
OR NOT
ENOUGH

KEY QUESTIONS

MAYBE,
BUT IT
WOULD BE
BETTER TO
REINFORCE
THIS POINT

ABSOLUTELY
YES

1. Often the value proposition in a cultural and creative business is much


too intangible and in some cases difficult to understand. Is your value
proposition easy to understand? Can it be described in a short sentence?
2. A
 re you the first in the market with regard to a relevant characteristic?
3. Is the value proposition different from competitors propositions?
4. Do you have enough of an advantage over the first competitor?
5. Can you defend, in the long term, your advantage? Can a competitor fill
the gap in the short term?

Are you satisfied with your Value Proposition?


Is this a strong point of your business model?
Do you need to reinforce any aspect? If necessary, take a look at the following management tools:

Management Tools useful for defining a Value Proposition


MANAGEMENT TOOLS

WHY USE IT?

TOOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL ENTERPRISES ICE


1- Cultural Background
1.1 cultural background

To reflect on the general framework upon which


unique value propositions will be founded.

TOOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL ENTERPRISES ICE


1 - Cultural Background
1.2 start up

To have a better understanding of how to create


value.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.1 Technology is regarded as a key success factor.

To assess specific innovation customer needs.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.2 Top management actively participates in decisions related to technological issues.

To assess specific innovation customer needs.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment
1.3 The budget for technology development is continuously improved.

In order to develop specific innovation requirements.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.4 Technology strategy supports business strategy.

To develop specific innovation requirements.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.5 Company targets are set to be technology leaders in the field.

To develop specific innovation requirements.

24

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.6 Technology strategies of the company are shared and applied by every
unit of the company.

To develop specific innovation requirements.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.7 Organizational structure is designed in such a way that it encourages
decision making. Jobs are designed to encourage autonomy in teamwork.

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.9 There are interdepartmental teams assigned for innovation in products
and processes.

To develop specific innovation requirements.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.10 Employees are authorized to make their own decisions in the planning
and control process of their activities.

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.11 Company culture encourages technology development and application
and regards it as a strategic factor.

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.12 The company shows learning organization characteristics by creating,
sharing, applying and transferring knowledge as well as learning from success and failure.

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.13 Communication channels are open, clear and safe for ideas, decisions and
knowledge especially between R&D, top management and manufacturing.

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.14 Change is regarded as an opportunity rather than a threat. The organization has the structural and cultural capability to predict and adapt to changes
in the future.

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.15 Publications and scientific activities such as congresses, symposiums,
etc. related to technological issues are followed and participated in.

To develop specific innovation requirements.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.16 Company encourages diversification in the skills of its employees.

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
4. Innovation factors inventory.
4.2 Current state of the project (early stages/final stages/well established but
not yet in its final stages/required to develop unfamiliar working methods)

To assess the current status and identify development and improvement strategies.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
4. Innovation factors inventor.
4.6 The project can be divided into stages needing different resources and skills.

To assess the current status and identify development and improvement strategies.

25

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
4. Innovation factors inventory.
4.8 Characteristics of the team members: they have a good understanding of
their personal differences/each others personal needs/a shared vision of the
teams future achievements/a clear sense of shared purpose/pull together to
deal with unexpected problems/are willing to take responsibility for making
new ideas work/are committed to making new ideas work/use personal contacts to help the team in various ways/have contacts outside the team that
are helpful/ good at learning from its mistakes/ talk things over constructively
when things go wrong.

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
4. Innovation factors inventory.
4.9 Characteristics of team leadership: it tends to be inspirational/creative/
result-oriented/it concentrates on monitoring progress

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
4. Innovation factors inventory
4.10 Characteristics of the team: it is creative/imaginative at work/produces
knowledge that did not exist before the team was formed/is concerned with
knowledge management/is productive/it produces good quality of product
or service for its customers.

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
5. Learning capabilities.
5.1 Technology development trends/ capacity to assess technologies relevant
to a firms business strategy.

To assess the current status and identify development and improvement strategies.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
Learning capabilities.
5.2 Work teams are encouraged to identify opportunities for improvement/
the firms core competencies and matching technological capabilities to market needs

To assess the current status and identify development and improvement strategies.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
Learning capabilities.
Computerized Innovation and Internationalization Capacity Audit Methodology
for SMEs (2INS Clusters)
5. Learning capabilities.
5.3 SME assimilates acquired knowledge/learns the lessons of experiences/passes
lessons learned across boundaries and time.

To assess the current status and identify development and improvement strategies.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
5. Learning capabilities
5.4 The SME cultivates learning readiness and invests in learning/pays
attention to tacit knowledge.

To assess the current status and identify development and improvement strategies.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
R&D capabilities
6.1 Existence of mechanisms to encourage and reward inventiveness and
creativity/for transferring technology from research to development.

To assess the current status and identify development and improvement strategies.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
6. R&D capabilities.
6.2 Existence of functions (departments) involved in concept development
and screening/clear project targets, project phase standards and project
managing regulations/relevance of an R&D plan to the corporate plan.

To assess the current status and identify


development and improvement strategies.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
6. R&D capabilities
6.3 Application of advanced designing methods, such as reengineering.

To assess the current status and identify development and improvement strategies.

26

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
6. R&D capabilities.
6.4 Presence of established protocols such as design for manufacture,
design for customer use.

To assess the current status and identify development and improvement strategies.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
11. Strategy planning capability.
11.1 Ability to identify internal strengths and weaknesses/external opportunities and threats.

To assess the current status and identify development and improvement strategies

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
11. Strategy planning capability.
11.2 Goal clarity.

To assess the current status and identify development and improvement strategies

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
11. Strategy planning capability.
11.3 Availability of a clear plana road map with measurable milestones.

To assess the current status and identify development and improvement strategies.

MODEL 2INS BUSINESS PLAN (2INS Clusters)


2. DESCRIPTION OF THE INNOVATION AND/OR INTERNATIONALIZATION PLAN.
2.1 Detailed description of the innovation plan (Description of the innovation project/Objectives of the innovation project/Origin of the innovation).

To assess specific innovation customer needs and


to develop internationalization requirements.

MODEL 2INS BUSINESS PLAN (2INS Clusters)


2. DESCRIPTION OF THE INNOVATION AND/OR INTERNATIONALIZATION PLAN.
2.2 Detailed description of the internationalization plan (Description of the
internationalization project/Objectives of the internationalization project/
Origin of the internationalization).

To assess specific innovation customer needs and


to develop internationalization requirements.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.1 Technology is regarded as a key success factor.

To assess specific innovation customer needs.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment
1.2 Top management actively participates in decisions related to technological issues.

To assess specific innovation customer needs.

CREATER PILOT PROJECT OUTPUTS (Creative Growth)


Planning and implementation of the support path "CREATER".

To get inspired by the content and implementation aspects before launching a support programme for CCI start-ups.

CREATER PILOT PROJECT OUTPUTS (Creative Growth)


Planning and implementation of the support path "CREATER".

To get inspired by the content and implementation aspects before launching a support programme for CCI start-ups.

27

5.4 BUSINESS MODEL KEY FACTORS: DISTRIBUTION CHANNELS

The Distribution Channels describes how a company reaches its Customer Segments to deliver a Value Proposition.
Distribution, and sales channels, make up a companys interface with customers. Channels are customer
touch points that play an important role in the customer experience.
The distribution channel represents the access point for the service and/or to the product; it is the way to deliver your offer. Without a distributing channel your customer cannot have or cannot use your product/service.
Examples of distribution channels in the cultural and creative business could be internet, other mobile
devices, a sales agency, help desk or other counters in the territory, corners or offices in a cultural site, etc.
Several elements in the territory could represent a distribution option. For example: other enterprises could
allow access to their customers, but also the physical environment could be the place where to distribute the
product/service and/or local infrastructure (routes, buildings, digital networks, etc) could allow one to reach
their customers.
It is possible to assess if your business model is sound enough with regard to Distribution Channels with
the help of the following checklist.

How to build a sound and aware Business Model for cultural and
creative business:
Key Factor 3 - Decisions about Distribution Channels:

KEY QUESTIONS

NOT THE
CASE
OR NOT
ENOUGH

MAYBE,
BUT IT
WOULD BE
BETTER TO
REINFORCE
THIS POINT

ABSOLUTELY
YES

1. The channels that you use are specific for different customers?
2. Are the channels able to deliver the Value Proposition to customers in
an effective way?
3. Are the channels you use able to reach the customers in the right time?
4. Do you reach enough places/do purchase situations reach your channels?
5. Does the distribution channel have a good influence on the cash cycle? Or
is there an important delay risk? Does the customer first pay intermediaries
and then intermediaries pay your company? Is solving problems possible?
6. Do you have enough control over distribution channels? Or do you have
any constraints from public authorities or owners of cultural resources?
7. Are we able to exploit the distribution opportunities of the territory
(routes, buildings, digital networks, physical environment, etc)
8. Is the channel choice efficient or expensive?

28

Are you satisfied with your Distribution Channels?


Is this a strong point of your business model?
Do you need to reinforce any aspect? If necessary, take a look at the following management tools:

Management Tools Useful for Distribution Channel policies


MANAGEMENT TOOLS

WHY USE IT?

TOOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL ENTERPRISES ICE


3. Long Financial Cycle
3.3 Business Plan

In order to estimate the economic contributions


to company income generated by distribution
channels.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.13 Communication channels are open, clear and safe for ideas, decisions and
knowledge, especially between R&D, top management and manufacturing.

To communicate openness development and


improvement strategies.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component-loading matrix for an internal technological environment.
1.15 Publications and scientific activities such as congresses, symposiums, etc.
related to technological issues are followed and participated in.

To communicate openness development and


improvement strategies.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
3. Principal component loading matrix for technology acquisition and exploitation.
3.3 The company has the ability to commercialize the developments made
in products and process through suitable marketing methods.

To communicate openness and readiness towards


international markets.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
7. Resources allocation capability
7.4 Full use of external technologies.

To develop internationalization and innovation


requirements.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
7. Resources allocation capability
7.5 Understanding competitors' core technology competence

To assess specific innovation trends.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
7. Resources allocation capability
7.6 Adapting self-technology levels according to changes in the external environment.

To assess needs and to develop specific innovation


requirements

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
9. Marketing capability
9.1 Relationship management with major customers.

To communicate openness and readiness towards


international markets.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
9. Marketing capability
9.2Knowledge of different market segments.

To communicate openness and readiness towards


international markets.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
11. Strategy planning capability
11.4 Adaptability and responsiveness of the company to the external environment.

To communicate openness and readiness towards


international markets.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
12. Barriers of internationalization
12.9 Inability to contact potential overseas customers.

To communicate openness and readiness towards


international markets.

29

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
13. Internationalization enhancers
13.4 Businesses are able to register with authorities through a simple and
inexpensive system, preferably by remote access through the Internet. Business licensing requirements are minimized, and when they are enforced,
the objective is to safeguard the health and safety of consumers and labour
rather than being a source of revenue for local and/or central governments.

To communicate openness and readiness towards


international markets.

MODEL 2INS BUSINESS PLAN (2INS Clusters)


2. DESCRIPTION OF THE INNOVATION AND/OR INTERNATIONALIZATION PLAN
2.2 Detailed description of the internationalization plan (Description of the
internationalization project/Objectives of the internationalization project/
Origin of the internationalization)

To communicate openness and readiness towards international markets.

MODEL 2INS BUSINESS PLAN (2INS Clusters)


3. MARKET PERSPECTIVES
3.1 Analysis of the size and trend of the reference market

To communicate openness and readiness towards international markets.

MODEL 2INS BUSINESS PLAN (2INS Clusters)


4. USE OF INNOVATION SUPPORT SERVICES
4.1 Acquisition of services provided by qualified subjects/professional
performances

To assess the current status and identify development and improvement strategies.

MODEL 2INS BUSINESS PLAN (2INS Clusters)


4. USE OF INNOVATION SUPPORT SERVICES
4.2 Acquisition of training services

To assess the current status and identify development and improvement strategies.

MODEL 2INS BUSINESS PLAN (2INS Clusters)


7. INVESTMENTS IN PRODUCTIVE CLUSTERS OR BY SMEs WITHIN
DISTRICTS

To assess the current status and identify development and improvement strategies.

5.5 BUSINESS MODEL KEY FACTORS: CUSTOMER RELATIONSHIPS

The Customer Relationship factor describes the types of relationships a company establishes with specific
Customer Segments.
A company should clarify the type of relationship it wants to establish with each Customer Segment. Relationships can range from personal to automated.
The Customer Relationships called for a companys business model to deeply influence the overall customer
experience.
Customer relationships are made of communications that the company sends to the customers and also
conducted via means of communication that the customers can use to be in touch with the enterprise. It
is a two-way communication process.
C&C SMEs could use a large range of communication means: web, social media, fairs, events, printings,

30

phones, front line people, etc.


It is possible to assess if your business model is sound enough with regard to Customer Relationships via
the following check list.

How to build a sound and aware Business Model for a cultural and
creative business:
Key Factor 4 - Decisions about Customer Relationships:

KEY QUESTIONS

NOT THE
CASE
OR NOT
ENOUGH

MAYBE,
BUT IT
WOULD BE
BETTER TO
REINFORCE
THIS POINT

ABSOLUTELY
YES

1. Your relationship media/methods are able to catch the attention of your customers?
2. Your relationship media/methods are able to guarantee the comprehension
of your value proposition?
3. Your relationship media/methods are able to stimulate the right actions in
your customers (purchase first of all)?
4. Your relationship methods guarantee solid support to the customer during
the service/product usage?
5. Your relationship methods guarantee good after sales support to the customer?
6. Your relationship methods guarantee a continuous and tailored dialogue with customers, during the customer life cycle?

Are you satisfied with your customer relationships?


Is this a strong point of your business model?
Do you need to reinforce any aspect? If necessary, take a look at the following management tools:

Management Tools Useful to developing Customer Relationships


MANAGEMENT TOOLS

WHY USE IT?

TOOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL


ENTERPRISES ICE
4. Intangible capital

Provide a general framework useful to define,


plan and control a communication strategy.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
3. Principal component loading matrix for technology acquisition and exploitation.
3.3 The company has the ability to commercialize the developments made
in products and process through suitable marketing methods.

To assess the current status and identify development and improvement strategies.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
9. Marketing capability
9.1 Relationship management with major customers

To assess the current status and identify development and improvement strategies.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
9. Marketing capability
9.2Knowledge of different market segments

To assess the current status and identify development and improvement strategies.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
12. Barriers of internationalization
12.9 Inability to contact potential overseas customers

To assess the current status and identify development and improvement strategies.

MODEL 2INS BUSINESS PLAN (2INS Clusters)


3. MARKET PERSPECTIVES
3.1 Analysis of the size and trend of the reference market

To assess the current status and identify development and improvement strategies.

31

5.6 BUSINESS MODEL KEY FACTORS: KEY RESOURCES

Every business model requires Key Resources. These resources allow an enterprise to create and offer a
Value Proposition, reach markets, maintain relationships with Customer Segments, and earn revenues.
Key resources can be physical, technological, financial, intellectual, or human. Key resources can be owned
or leased by the company or acquired/shared from key partners.
A cultural and/or creative enterprise focuses on human resources. Their knowledge and skills, but also their
motivation and engagement level, are crucial for success.
In the territory a lot of key resources, material and immaterial can be found: incubators could offer orientation, tools, locations, the financing system could make funds available, enterprises and the education system could be a source of knowledge, and in the territory there are cultural or natural resources that could
be the focal point for the C&C SME.
It is possible to assess if your business model is sound enough with regard to Key Resources via the following
check list.

How to build a sound and aware Business Model for cultural and
creative business:
Key Factor 5 - Decision about Key Resources:

KEY QUESTIONS

NOT THE
CASE
OR NOT
ENOUGH

MAYBE,
BUT IT
WOULD BE
BETTER TO
REINFORCE
THIS POINT

ABSOLUTELY
YES

1. Do you have enough skilled people in order to deliver to your customers the required amount of product-services? Is it easy to acquire others
skilled resources if necessary?
2. Do you have enough specialized tools (sw, hw, machinery, etc) in order
to deliver to your customers the required amount of product-services? Is it
easy to acquire others tools if necessary? In particular, do you have tools
to track the customer experience?
3. Do you have the necessary access (possibility to manage) to cultural
resources that distinguish your offer?
4. Do you have enough funds in order to deliver to customers the required amount
of product-services? Is it easy to acquire funds or new associates if necessary?
5. Are we able to involve in the business model territory key resources?
(e.g. incubators, financing systems, cultural and natural resources, etc...)

Are you satisfied with your Key Resources?


Is this a strong point of your business model?

32

Do you need to reinforce any aspect? If necessary, take a look at the following management tools:

Management Tools Useful to develop Key Resources


MANAGEMENT TOOLS

WHY USE IT?

TOOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL


ENTERPRISES ICE
5. Management approach
5.1 Management approach

Provide a general overview about a managerial


approach to develop organizational factors.

TOOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL


ENTERPRISES ICE
5. Management approach
5.2 Customer management and networking provider

Provide a general overview about a managerial


approach to develop organizational factors.

TOOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL


ENTERPRISES ICE
5. Management approach
5.3 Networking tools

Provide a general overview about a managerial


approach to develop organizational factors.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.14 Change is regarded as an opportunity rather than a threat. The organization has the structural and cultural capability to predict and adapt to
changes in the future.

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.16 The company encourages diversification in the skills of its employees.

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
10. Organising capability
10.1 Flexibility in adjusting the organization structure

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
10. Organising capability
10.2 Autonomy of sub-units

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
10. Organising capability
10.3 Ability to handle multiple innovation projects in parallel

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
10. Organising capability
10.4 Coordination and cooperation of R&D, marketing and manufacturing.

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
10. Organising capability
10.5 Communication between suppliers, company and major customers

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
10. Organising capability
10.6 High-level integration and control of the major functions with the company

To develop a new mind-set within the organization.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
10. Organising capability
10.7 Mechanisms to track the progress of innovation projects

To assess the current status and identify development and improvement strategies.

33

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
12. Barriers of internationalization
12.3 Quality of enterprise's products and/or services; Specifications of the
enterprise's products and/or services; Price of the enterprise's products
and/or services.

To assess the current status and identify development and improvement strategies.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
1. Principal component loading matrix for an internal technological environment.
1.14 Change is regarded as an opportunity rather than a threat. The organization has the structural and cultural capability to predict and adapt to
changes in the future.

To develop a new mind-set within the organization.

CREATER PILOT PROJECT OUTPUTS (Creative Growth)


Planning the support path "CREATER"

CREATER was launched in collaboration with other


regional initiatives in order to optimise resources
for the sake of CCI start-ups.

5.7 BUSINESS MODEL KEY FACTORS: KEY ACTIVITIES

The Key Activities factor encompasses the most important things a company must do to make its business
model work
Every business model calls for a number of Key Activities. These are the most important actions a company
must take to operate successfully.
As Key Resources, they are required to create and offer a Value Proposition, reach markets, maintain Customer Relationships, and earn revenue.
For C&C SMEs key activities could, first of all, be those related to innovation, or project management, or
networking management, etc...
A set of key activities have to be added to the business model in order to track, understand and develop
positive relations with individuals located or visiting the territory.
It is possible to assess if your business model is sound enough with regard to Key Activities via the following checklist.

34

How to build a sound and aware Business Model for a cultural and
creative business:
Key Factor 6 - Decision about Key Activities:

KEY QUESTIONS

NOT IN
THIS CASE
OR NOT
ENOUGH

MAYBE,
BUT IT
WOULD BE
BETTER TO
REINFORCE
THIS POINT

ABSOLUTELY
YES

1. Do you dedicate enough time to the creative process? (How many new
ideas, projects do you introduce successfully every year?)
2. Are the project management activities satisfying? Are you able to manage
the number of projects necessary to satisfy customers and make the business
profitable?
3. Are you satisfied by the networking activities required in order to develop
or stabilize your business?
4. What is the first requirement that your customer ask to your enterprise (e.g.
communication, accessibility, speed, cheapness, 360 solutions, etc...)? Do you
dedicate enough time to developing\stabilizing the performances related to
the first requirement of your customers?
5. Are the activities related to customer relations satisfying? In particular, are we
able to track, understand and develop the customer experiences from different
points of view? (e.g. sociological, psychological, anthropological point of view)
6. People are the success keys for a cultural and creative SME. Are you
satisfied with your people management and employee satisfaction?

Are you satisfied with your Key Activities?


Is this a strong point in your business model?
Do you need to reinforce any aspect? If necessary, take a look at the following management tools:

Management Tools Useful for developing Key Activities


MANAGEMENT TOOLS

WHY USE IT?

TOOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL


ENTERPRISES ICE
2- Uniqueness of the project
2.3.1. Project Management

Allows us to define every single activity needed in


order to reach the objectives.

TOOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL


ENTERPRISES ICE
5. Management approach
5.1 Management approach

Provides a general overview about a managerial approach to develop the key activity in the organization.

TOOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL


ENTERPRISES ICE
5. Management approach
5.2 Customer management and networking provider

Provides a general overview about a managerial


approach in developing the key activity in the organization.

TOOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL


ENTERPRISES ICE
5. Management approach
5.3 Networking tools

Provides a general overview about the managerial


approach to develop the key activity in the organization.

MODEL 2INS BUSINESS PLAN (2INS Clusters)


2. DESCRIPTION OF THE INNOVATION AND/OR
INTERNATIONALIZATION PLAN
2.1 Detailed description of the innovation plan (Description of the innovation project/Objectives of the innovation project/Origin of the innovation)

To develop and improve innovation strategies.

35

MODEL 2INS BUSINESS PLAN (2INS Clusters)


1. MARKET PERSPECTIVES
3.2 Demand and competitors analysis

To develop and improve innovation strategies; to


identify new markets.

CREATER PILOT PROJECT OUTPUTS (Creative Growth)


Implementation of the support path "CREATER"

The programme was developed after key preliminary


actions to prepare the ground (research on CCI startup needs, and on similar actions in other regions and
in the development of a local partnership), launch of
a call for applications, programme implementation
and collection of outputs and analysis.

CREATER PILOT PROJECT OUTPUTS (Creative Growth)


Monitoring and Promoting the support path "CREATER

A key aspect was the promotion of selected startups and gathering feedbacks with the aim of developing similar actions with other funded sources. A
similar programme has, for instance, been implemented in the audiovisual sector.

5.8 BUSINESS MODEL KEY FACTORS: KEY PARTNERS

The Key Partnerships factor comprises the network of suppliers and partners that make the business model work.
!

Companies forge partnerships for many reasons, and partnerships are becoming a cornerstone of many business models. Companies create alliances to optimize their business models, reduce risks, or acquire resources.
We can distinguish between four different types of partnerships:
Strategic alliances between non-competitors
Competition: strategic partnerships between competitors
Joint ventures to develop new businesses
Buyer-supplier relationships to assure reliable supplies
Cultural and creative business models usually have a large series of opportunities to enlarge their offer to other
customers/markets. Especially for SMEs, in order to access these opportunities, it is necessary to have partners.
Key partnerships allow one to develop the business without growing the enterprise dimensions or without an
increase in investments. Key partnerships also allow one to develop the business while maintaining flexibility.
Partnerships could very well be the most important way to develop relationships with the territory. As presented previously in this document, there are many subjects in the territory that could have a relationship
with the C&C SME. Subjects include: institutions, the education system, the cultural resource management
system, others enterprises, incubators, financing system, infrastructures system.
The number and the effectiveness of these relations are strictly linked with the success chances of a C&C SME.
It is possible to assess if your business model is sound enough about Key Partners via the following check list.

36

How to build a sound and aware Business Model for a cultural and
creative business:
Key Factor 7 - Decision about Key Partners:

KEY QUESTIONS

NOT IN
THIS CASE
OR NOT
ENOUGH

MAYBE,
BUT IT
WOULD BE
BETTER TO
REINFORCE
THIS POINT

ABSOLUTELY
YES

1. Do you have all the necessary partnerships in order to fill enterprise gaps
about key factors of the business model?
2. Is it easy to replace a partner if you need to?
3. Do you have the key factors that your partners need in order to fill their
business model gaps?
4. Do the partners need you to reach their objectives? (or can they reach
the final customers without your contribution?)
5. Are we able to establish a large number of effective and solid relations with
subjects located in the territory? (e.g. institutions, the education system,
cultural resources management system, other enterprises, incubators, the
finance system, infrastructure system, etc...)

Are you satisfied with your Key Partners?


Is this a strong point of your business model?
Do you need to reinforce any aspect? If necessary, take a look at the following management tools:

Management Tools Useful for developing Key Partnerships


MANAGEMENT TOOLS

WHY USE IT?

TOOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL ENTERPRISES ICE


1- Cultural Background
1.3 Strategy formulation

It shows the network system for a SME.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
7. Resources allocation capability
7.6 Adapting self-technology level according to changes in the external
environment

To develop relations with the territory.

Computerized Innovation and Internationalization Capacity Audit Methodology


for SMEs (2INS Clusters)
12. Barriers of internationalization
12.7 Identifying foreign business opportunities/Obtaining reliable foreign
representation/Developing new products for foreign markets

To develop relations with the territory.

MODEL 2INS BUSINESS PLAN (2INS Clusters)


2. DESCRIPTION OF THE INNOVATION AND/OR INTERNATIONALIZATION
PLAN
2.2 Detailed description of the internationalization plan (Description of the
internationalization project/Objectives of the internationalization project/
Origins of the internationalization)

To develop relations with the territory.

MODEL 2INS BUSINESS PLAN (2INS Clusters)


4. USE OF INNOVATION SUPPORT SERVICES
4.1 Acquisition of services provided by qualified subjects/professional
performances

To develop relations with the territory.

MODEL 2INS BUSINESS PLAN (2INS Clusters)


4. USE OF INNOVATION SUPPORT SERVICES
4.2 Acquisition of training services

To develop relations with the territory.

37

MODEL 2INS BUSINESS PLAN (2INS Clusters)


6. INVESTMENTS IN PRODUCTIVE CLUSTERS OR BY SMEs WITHIN
DISTRICTS

To develop relations with the territory.

CREATER PILOT PROJECT OUTPUTS (Creative Growth)


Planning the support path "CREATER"

CREATER was developed after a partnership with


the Municipality of Bologna and with the backing
of the Region Emilia-Romagna together with the
development of non formal partnerships with key
CCI actors such as Cineteca di Bologna, Romagna Creative District and with other institutions,
like the Province of Bologna.

5.9 BUSINESS MODEL: COSTS AND REVENUES

A sound Business Model has to be sustainable. If the 7 key factors exist and are well mixed, the enterprise
has satisfied the pre-requisites to stay in the market in a successfully way.
The decisions about the 7 Business Model Key factors, will generate the fundamental structure of revenues
and costs. At this stage (not before) it is correct to evaluate if there is a good profitability perspective.

Management Tools Useful to estimate Costs and Revenues


MANAGEMENT TOOLS

WHY USE IT?

TOOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL


ENTERPRISES ICE
2 - Uniqueness of the project
2.3.2 portfolio management

To understand how to make efficient the


product/customer/markets portfolio

TOOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL


ENTERPRISES ICE
2 - Uniqueness of the project
2.3.3. Buying policies

Provide tools to calculate the optimum buying


decision

TOOLKIT A PRACTICAL GUIDE FOR SUPPORTING CULTURAL


ENTERPRISES ICE
3. Long Financial cycle
3.3 Business plan

Show business plan logic, schemes and


formats.

MODEL 2INS BUSINESS PLAN (2INS Clusters)


7. SEAT
7.2 Economic-financial forecast

To evaluate financial perspectives.

MODEL 2INS BUSINESS PLAN (2INS Clusters)


8 INVESTIMENT PLAN
8.1 Detailed investments

To evaluate financial perspectives.

MODEL 2INS BUSINESS PLAN (2INS Clusters)


7. SEAT
7.2 Economic-financial forecast

To evaluate financial perspectives.

CREATER PILOT PROJECT OUTPUTS (Creative Growth)


Planning the support path "CREATER"

Provides an example of a support programme


that was developed with a very limited budget.

38

CHAPTER 6
FROM BUSINESS MODEL TO BUSINESS PLAN
Link to the collection of selected management tools
TOOLKIT
A PRACTICAL GUIDE FOR SUPPORTING
CULTURAL ENTERPRISES

http://www.ice-med.eu/images/stories/results/livro2.pdf

ICE
MODEL 2INS BUSINESS PLAN
2INS Clusters
CREATER PILOT PROJECT OUTPUTS
Creative Growth

http://www.2insclusters.net/attachments/article/18/2INS%203%20
4%20c%20SB%20business%20plan.pdf
http://www.creative-growth.eu/Publications/tabid/1289/Default.aspx

39

CHAPTER 7
CAPITALIZATION RESULTS
7.1 FORMER OUTPUTS CAPITALIZATION
The project objective was to capitalize on the outputs produced by the former projects and to define new
ideas for a new model of cultural incubator.
The 4 outputs to be capitalized upon were quite different in terms of them having:
different support (digital tools, paper guides),
different style,
different focus (strategy, planning, day-to-day management, experimentation)

BUSINESS''
MODEL'
RELATION'BOX'
MODEL'

DURATION'

ce
)'
m VAL
er U
'Ex E'
pe
rie
n
to

As#is#

us

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(C

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Number'of''

(territory(and(individuals)(

RELATED'
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exis%ng(outputs(by(
former(projects(
'
!

CLUSTERS''

INTEGRATE(SYNERGIC(BUSINESS(MODELS(
(

BUSINESS'TOOLS'
AGGREGATION'AND'RELATION'
GOVERNANCE'

In each output it was possible to find synergistic elements and the possibility of mixing them in order to
obtain something that could be defined as more than a simple sum of its parts.

40

This Business Model is a capitalized product because:


STARTING POINT

CAPITALIZATION RESULT

Different outputs from different


projects

A single integrated system

Separated strategic factors, planning


approach, day by day management
tools, pilot project.

A rational path from strategy to implementation, with a clear thread and evident links
among the outputs.

Each output gives a specific guideline


to the cultural entrepreneur.

A single sequence, an ordered structure that represents a complete guide.

First drawing up of specialized


contents

In-depth treatment of the contents.


Adding of new customized elements for the cultural and creative business.
Enrichment of the methodological contribution via the use of the 9 factors
classification of Osterwalders Business Model Canvas as a general framework. Each
factor was filled with the contents of former project outputs integrated with new
customized elements.
Adding a new methodological contribution for the cultural and creative SMEs, about
the fundamental importance of creating effective relationships with territory and
individuals.

Single enterprise use (essentially)

Not only for a single SME use


Suitable for collaborative use

7.2 INCUBATORS CAPITALIZATION LINES


The capitalization results listed above represent an important improvement opportunity for cultural incubators.
The proposed business model for cultural and creative SMEs is not only a tool, it is also able to favour the
evolution of cultural incubators model.
The cultural incubators now no longer have four separated tools, but a single structure to be used to:
stimulate the business idea generation process, in a new effective way,
evaluate how sound a cultural\creative entrepreneurs approach to the business is,
support creative and cultural SMEs via synergistic tools, from ideas to day-to-day management,
improve and direct the creative and cultural business towards two key concepts:
- t o build sound and value-added relations with the territory and individuals in the territory,
- t o aggregate single competences and enterprise value with other cultural and creative SMEs.
These last two points seems to represent a new way for cultural and creative incubators.
The experiences made during this project showed us that a new model of incubators is desirable, with
which we can define an Open Incubator that is able to aggregate:
ideas,
resources,
people
enterprises
This aggregation work will be effective if it creates new enterprise clusters.

41

Much evidence has emerged during the 3C 4 Incubators project to support this concept:
a cultural and creative SME has a single idea that could be very effective but often this idea is also
very specialized and with a limited range of application,
in addition to this, it is not rare to see a high level of individualism in cultural entrepreneurs (more
so than in others businesses),
the success could be easily reached by the proposal of integrated solutions, and the incubators
have to support this process,
The cultural incubator has to motivate the enterprises to enhance a joined approach to the business, to go beyond the isolation and consequently undersize their ideas
The Open Incubator may be such not only in terms of tools. It helps to integrate ideas and partnerships, it could propose a model to develop relations with a territory and individuals.
The Open Incubator may be such, also in terms of relation activities. During 3C 4 Incubators
project we tested a social modality for the SMEs: the Factory Event. The event aimed to create
new common ideas among enterprises, supported by the business model methodology. This modality is a starting point, a modality that has to be merged with others (see next paragraph about
future proposals),
During the experimentations (including local events organized after the Factory Event) it was evident that the Open Incubator, by the business model methodology integrated with the methodology about relationships, can be used to build up enterprise clusters.
The aggregation function by the Open Incubator has to produce working clusters.

7.3 FUTURE PROPOSALS


The future objective could be to develop an Open Incubator able to create working clusters of cultural and
creative SMEs.

In order to make a cluster work, 3 key dimensions have to be present in the incubator:
1. Business and managerial tools
2. Aggregation method and Relation tools
3. Governance competences

42

BUSINESS AND MANAGERIAL TOOLS


(e.g. business model, business plan)
aim to
support the creation of sound enterprise ideas and projects

AGGREGATION METHOD AND RELATION TOOLS


(e.g. factory events and games based on the business model
and relation box methodology, networking tools)
aim to
join SMEs in clusters

GOVERNANCE COMPETENCES
(e.g. common strategy, common marketing and communication, common sustainable way
to run the cluster. We cannot assume that cultural and creative SMEs, although aggregated
in a cluster, would be capable of managing the cluster by themselves)
aim to
conduct the cluster towards the value creation for SMEs, the territory and its individuals
At the end of the 3C 4 Incubators project, and while also looking forward, we can summarize the current
status as follow:
KEY DIMENSION

AS IS

TO BE

BUSINESS AND
MANAGERIAL TOOLS

Available
Focused
Integrated

More accessible (delivery to SMEs and


incubators) via digital means
More focused on specific cultural and creative
businesses (e.g. audiovisual, cultural heritage, etc...)

AGGREGATION METHOD
AND RELATION TOOLS

Ideas Factory Event tested

Enhanced

Emerging new ideas about business model


gamification

Create method to
Motivate
Aggregate
Results from the networking model Working group
Focus common way in a cluster
Maintain the necessary level of communication
Release 1 of the Relation box model
among cluster members
GOVERNANCE
COMPETENCES

n.a.

Defined
Implemented

43

BUSINESS''
MODEL'
RELATION'BOX'
MODEL'

DURATION'

ce
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m VAL
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to

As#is#

us

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Number'of''

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exis%ng(outputs(by(
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'
!

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INTEGRATE(SYNERGIC(BUSINESS(MODELS(
(

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GOVERNANCE'

44

www.3c4incubators.eu

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