I fully agree with him too. Ideas and opportunities are everywhere. What separates the successes from the failures all comes down to execution. I’ve used a lot of methodologies and frameworks and one of my all time favorites is the Business Model Canvas.
It is a wonderfully simple tool to help you flush out your ideas into a more detailed and complete business model that you can visualize on one page. The visual chart provides areas for describing your business or product’s value proposition, infrastructure, customers, and finances. It can help you in aligning your planned activities and illustrate potential trade-offs.
The following areas make up the building blocks for the business activities.
- Customer Segments
- Customer Relationships
- Value Propositions
- Key Activities
- Key Resources
- Partner Network
- Cost Structure
- Revenue Streams
How the business model canvas works
Once you’ve defined a business idea or concept, a survey of the potential market should be taken before developing the product. Research and brainstorming will help refine the concept, quantify the market potential, and identify important sell able features for the product.
The Business Model Canvas helps you organize your information to reflect systematically on the business model being developed by mapping each of its elements to the real business areas.
Then, once you are ready, the following questions will help you develop your idea and complete all of the areas in your canvas.
- Who are your key partners/suppliers?
- What are the motivations for the partnerships?
- What key activities does your value proposition require?
- What activities are important the most in distribution channels, customer relationships, revenue stream…?
- What core value do you deliver to the customer?
- Which customer needs are you satisfying?
- What relationship that the target customer expects you to establish?
- How can you integrate that into your business in terms of cost and format?
- Which classes are you creating values for?
- Who is your most important customer?
- What key resources does your value proposition require?
- What resources are important the most in distribution channels, customer relationships, revenue stream…?
- Through which channels that your customers want to be reached?
- Which channels work best? How much do they cost? How can they be integrated into your and your customers’ routines?
- What are the most cost in your business?
- Which key resources/ activities are most expensive?
- For what value are your customers willing to pay?
- What and how do they recently pay? How would they prefer to pay?
- How much does every revenue stream contribute to the overall revenues?
Example of Completed Business Model Canvas
Here’s an example of Waze, a crowdsourced GPS navigation software for smart phones.
If you need more details on how to really dig in a get the most benefit out of the business model canvas, I suggest you check out the book. It goes into great depths on how to get the most out of this model and also has some great case studies to learn from.
The Business Model Canvas is a great tool to map our you new start up, product idea or your current business. It really makes you think about the many important aspects of your proposed idea.
If you need help facilitating a Business Model Canvas brainstorm, let us know and we would be happy to help you through the process.