Today, various business tools are used in strategic and business planning. One of them is called BUSINESS MODEL CANVAS. The tool is extremely popular with industry professionals, since it allows them to upgrade the process of the business model creation. The idea of the business model canvas is to gather key information on a 1-page sheet. In this way, the business idea is communicated, tested and enhanced in a more straight-forward way.
Business model generation WITH THE LEADING TOOL
Today being successful is a term, that requires far more than just a good product/service. It requires a winning business model. Creating one, requires one to connect key elements of the business model in a creative and innovate way.
Below we are pointing out 12 key elements of the business model canvas that one should consider:
- Problem – What kind of pain end users are experiencing (without your solution)?
- Solution – How are we successfully and efficiently addressing the pain?
- Unique selling point (USP) – What makes our solution stand out and differ from the competition?
- Key resources – Which resources are fundamental to competitive advantage creation (eg patents, trademark, company culture, etc.)?
- Channels – Which channels are used for the distribution and communication (costs vs. ability to get feedback).
- Target segments – Which potential end users / clients we are targeting and what their characteristics are?.
- Indicators – What are the prerequisites for the success and how we are going to measure our performance?
- Key partners – Who are our strategic partners (suppliers, end users/clients, creditors, investors).
- Risks – Which risks are key to address and how?
- Revenue sources – How we are going to generate revenues and what will be our pricing policy?
- Cost structure – Which are our costs, what is their nature, what is our break even point, what return is expected?
- Key activities – Which activities are crucial for us to reach our goals?
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Please note that creating a business model canvas is normally only a beginning of the strategic and business planning. Creating a winning business model requires us to dig into details as well, test our assumptions etc. Nevertheless, it makes it extremely easy to agree upon fundamentals and set the healthy & promising starting point.
When designing a business model it is important to understand the nature of market gaps. Thinking in this way will not only boost the probability of your success, but also improve your value added. Success is by no means conditioned by standing out in all elements of the business model. Sometimes it is enough to change only one element. Last but not least, it is often a preferred choice to go niche and address more specific needs. Going general requires more resources and is far more challenging to handle. Normally it is a “big fish” bet.
Business model generation is intertwined with many other questions such as how to find promising end user / client problems and how to successfully address them, how to find and establish a USP, how to raise attention of the target segment, how to maximize your added value, how to know when is the right time for business model changes etc. In case you are open for us to widen your horizons, let us know. We will be glad to work on another interesting case!