Page 43 - MICROHUB Handbook - ENGLISH

VALUE CREATION

ANALYSIS

Once you establish what are the key activities you have to implement,

the key resources needed, and from where and how you can get them,
you can then devise the cost structure of your craft business. The main
drivers of costs along this structure will be:

· The amount of each type of resource that you need

(for example, the size of workshop facilities, the number
of tools, items of equipment or staff, the number of

promo leaflets to print, etc.),

· The unit cost of each type of resource (for example,
purchase or rental cost per m2 of workshop space,
price per promo leaflet, monthly salary of an employee,

hourly fee of a freelancer, etc.)

At the start of a business, and when the sales volume is lower or
fluctuating, it is typically more efficient to rent and share assets instead

of buying and owning them, to acquire freelancer services instead of
employing staff. This is because such approaches allow you to avoid high

costs of investment in own assets and employees that may not be
utilised at full capacity from start, and more flexibility and speed to scale
up and down your services requirements in line with customer demand.

However, when a business is operating at full

production capacity, such outsourcing, leasing and
sharing approaches typically end up being more
costly compared to owning and employing. This is due

to economies of scale and scope that you can
leverage when working at full capacity.

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