In our last post we explored the Business Model Canvas and looked into the curiosity and clarity elements. To truly get the best out of The Business Model Canvas and implement action, you need to consider nine individual categories and the challenges each pose for your business:

1. Customer Segments:

An intimate understanding of your customer drives every other element, so you need to be really clear about this. Who do you sell to, who do you help?

What groups of customers are you providing value for?
What are your customers’ characteristics and personas?
How would you describe your different customer groups?

Are different relationships needed for different clients? Do they deliver different profitability? This drives all of your thinking and understanding so it’s helpful to focus on one customer segment at a time.

2. Value proposition

What are your promises to your customers? Why do your customers come to you?

What problems do your customers have and how are you solving them? What’s your competitive advantage?
How does your product or service meet the needs of your customers?
What value do you deliver to your customer segments?
What do you offer that is unique, and why will your customers prefer your solutions to alternatives that might be available?

Business Model nirvana starts when you have a clear fit between your value proposition and your customer segment. It involves ongoing conversations and rapid experimentation to make sure that the fit is real.

3. Customer Channels

How do you reach your customers? Where do they want to be reached?

What are the most effective methods to reach your customers?
What are the channels you use to communicate, sell and service your customers?
How do you manage the customer journey from awareness raising to completing a sale?

Look at these questions from the perspective of your customers… your answers will reflect their preferences and that’s based on their existing behaviour. There’s no point in building a channel and then finding your customers don’t and won’t use it.

Be aware that there are different phases within a channel too. How do you raise awareness about your products and how do you help customers evaluate an organisation’s value proposition?

4. Customer Relationships

You might think that this is a ‘Channel’ too. It’s certainly part of the way that you communicate with customers, although your choice is often determined by the value of the relationship. If they are buying something expensive or complex, they may want a close personal relationship with the company. Perhaps a named individual who will be their link. Again, this will be mostly dictated by your customers. So, consider; how do you interact with your customers?

How will you communicate with your customers (face-to-face or remotely?)
How will you manage customer acquisition, convincing your customers to select your products or services over that of others available?
Can you retain customers and how will you do this?
Can you offer added value and upsell to your customers?

5. Revenue Streams

How much income will your customers generate?

What source of income do you have?
What’s your pricing strategy?
Do different customer segments generate different levels of income?
Do you have a mix of customer segments that drive different revenues for your business?

6. Key Resources

What resources do you need to create and deliver value proposition?

What physical resources will you need now and in the future?
What IP do you own?
What human resources to you need now and in the future?
What financial resources will you need? This might include lines of credit, working capital and access to finance?

7. Key Activities

What tasks are key to the success of your business?

What are the key actions and activities that will enable you to deliver value proposition?
What processes will ensure your business runs efficiently
How will you manage research and development, production, marketing, sales, customer service, finance and administration?

8. Key Partnerships

What partnerships are critical to your business?

Who are your key partners, suppliers or collaborators?
What key activities do they perform?
What key resources to they provide/deliver?
How will you manage these relationships?

9. Cost Structure

What will it cost to launch and maintain your business?

What costs will you incur at each stage of the business; for example creating marketing collateral, acquiring users/customers, building a team, managing partnerships, fulfilling distribution?
Which key activities represent the biggest cost to your business?
Are these costs fixed or variable?
What economies of scale can you hope to achieve?

Have you thought about your Business Model Environment?

What kind of impact can the environment in which you trade have on your business? If you haven’t thought about it, now is the time:

You need to think about how will you adapt to environmental changes? Recognise influences on your business model and consider the implications on your business. For example, what impact might the pandemic have on your business, and how will your partners and suppliers be affected?

ACTION

So, now that we’ve moved through the phases of Curiosity and Clarity, it’s time to think about Action.

What to do now:Download the materials

Print them out if possible
Use paper and post-it notes (or similar)
Work through the elements in the order given
Invite others to discuss and add/edit/amend
Share
Use to communicate current state, new ideas and what ifs.

STEVE’S FIVE TOP TIPS:

1. Use only what’s needed

Only put on the canvas what is relevant to telling the big picture strategic story. Your details will drive activity, they clutter up the big picture and draw attention away from how well the model fits together.

2. Use visuals and words

We all love pictures and dynamic language to help us grasp meaning, so combine images and words on your sticky notes to allow for a quicker understanding of your business model.

3. Use colour coding

This will help to relate certain building blocks. It helps you tell your story when you’ve got coloured connections.

4. Do not create orphan elements

Every building block needs to be connected to another. If you find an orphan consider if it belongs on the canvas or not.

5. Develop learning and story-telling

Design a business model where each block reinforces each other and describes the business model mechanics.

And finally…

“Don’t fall in love with your first idea - look at different ways that you can achieve the goal you’ve set yourself and test and experiment with your ideas to make sure they work and you can deliver.”

Do you need some help with your business planning? Contact us for an informal chat and to arrange a free 30 minute 1-2-1 session.