One of the traditional mistake when building Value Proposition is to dive into the details…
The Business Model Canvas
Recently in an article, we discussed the value proposition and its role in a business model canvas. We started off with focusing on business value proposition because as the core of any business, it’s the where everything begins. However, understanding value proposition alone will not be the major determining factor of your success.
KISSmetrics along with Alex Osterwalder of Strategyzer hosted a webinar where they shared insights on how to use a Business Model Canvas in organizing your business thoughts and ideas and eventually putting those into action. For Convert, a good business model canvas will expose the imperfections of your plan so you can make some fine-tuning before the execution. Business Model Canvas helps businesses answer the who, what, where, when and how of your business.
If you have already executed your plan and something goes wrong, Business model canvas helps you pinpoint where the problem is and helps you make the necessary changes before you continue. Entrepreurusn often focuses on the solutions so much that they sometimes get carried away, they create everything from that premise – solving a problem. But is there really a problem to solve? Do you have evidence that the customers want this problem solved?
[Tweet “A business model canvas only works if it aims to solve a solvable problem. #Startups #Entrepreneurs.”]
Building a Business Model Canvas
Yes, you have your unique selling point; you have a promised value but if you do not know how to orchestrate this with your business model, you are more likely to fail than to succeed. The business model canvas is your outline – your step by step guide, your decision matrix. If you have a business model canvas, you can realign and redesign your plan more easily. Your progress, failures and success will be documented. You will know if things are working according to your plan or if there are major roadblocks along the way. This is your business model in one page.
A business model canvas has nine elements:
- Key partners
- Key activities
- Key resources
- Value propositions
- Customer relationships
- Customer segments
- Cost structure
- Revenue streams
If you are able to fill in what these 9 nine elements require, these will somehow give a clear view of the key drivers that need for your business to succeed.
What To Expect
As stated by Ivy Wigmore in her article;
“A business model is a specification describing how an organization fulfills its purpose”.
If we are to add the word canvas to it – then we can simply say that you will have something that is tangible – something that you can look at and hold on to. Success is simply the result of executing what is written on the canvas but more than that, having this piece of paper also guarantees the delivery of three things:
- Improved focus. There is no blind side. You can see clearly where your business is going
- Ensure flexibility. As mentioned, there will be roadblocks along the way but if you have a business model canvas, you can change your approach easily from a planning perspective standpoint
- Room for transparency. Your team will know the reason behind your every action as well as the result of each action that you took. It is recorded and documented in the canvas.
If you want to know more about the webinar, you can watch it full here.