Introduction to Business Model Canvas
You can listen to the lecture here:
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Business Plan
Launching a business in the not-so-distant past required meticulously crafting a thick business plan, a document that detailed everything from market research to financial projections. A business plan functions as the benchmark for potential investors and a guide for the company.
Watch the video in Acticvity 7 to learn more.
However, the rise of the Business Model Canvas (BMC) brought a revolution. This one-page wonder allowed startups to visualise their core business model, focusing on value propositions, customer segments, and revenue streams. It's faster, more adaptable, and perfect for iterating as your business evolves.
So, which is better? It depends! A business plan remains valuable for securing funding or in-depth strategic planning, offering a comprehensive picture. However, in the fast-paced startup world, the Business Model Canvas (BMC) holds unparalleled importance. It allows for agility, quick testing of ideas, and a transparent communication tool for everyone involved.
Imagine comparing a business plan to a detailed blueprint for a house, and the BMC to a flexible sketch that encapsulates the essence of that house. Both have their respective roles, but the BMC serves as an entrepreneur's most valuable tool for initiating and maintaining flexibility.
Watch the video in Acticvity 7 to learn more.
The Business Model Canvas is a powerful tool that helps visualise and analyse your business model. Here's a breakdown of each quadrant in point form:
- Who are your ideal customers?
- What are their needs, wants, and pain points?
- Can you segment your customers into different groups?
- What value do you offer your customers?
- How does your product/service solve their problems or improve their lives?
- Why should they choose you over your competitors?
- How will you reach your target customers?
- What channels will you use to deliver your value proposition (e.g., online store, brick-and-mortar store, social media)?
- How will you acquire and retain customers?
- What type of relationship do you want to build with your customers?
- How will you interact with your customers (e.g., self-service, personal assistance, community forum)?
- What level of customer service will you provide?
- How will you generate revenue?
- What are your pricing models (e.g., subscriptions, one-time purchases, advertising)?
- How will you capture value from your customers?
- What resources do you need to deliver your value proposition?
- This could include physical resources (e.g., equipment, inventory), intellectual property (e.g., patents, copyrights), and human resources (e.g., skilled employees).
- What are the most important activities your business needs to perform?
- This could include production, marketing, customer service, and product development.
- Who are your key partners?
- Are there external suppliers, distributors, or collaborators who are essential to your business model?
- How will these partnerships create value for your business?
- What are the costs associated with running your business?
- This could include fixed costs (e.g., rent, salaries) and variable costs (e.g., materials, production costs).