A Roadmap To Building Your Business
Universities all over the world teach entrepreneurs to be diligent in identifying the business model for their business idea. The business model is How your business will deliver the valued services to your customers, and how you plan to make money. What we assume may be a great business idea, and a great service, may turn out not to have enough willing customers to buy what you are selling. It is better to find this out early, so you can adjust and create a better model. Your business model contains the description of what it takes to identify the customers, and their needs, as well as defines all the activities you will need to do in building out an infrastructure to deliver the service to those customers.
That’s why I call the work of identifying your business model as your roadmap to building a solid business.
This is the Business Model Canvas, a document that serves to help you visualize and understand how your business will operate.
As you can see here, this canvas is a graphic depiction of the business model, with 9 parts or building blocks. Let’s briefly visit each one.
Who are your CUSTOMERS and what problem or need will your business solve? You will delve deeply into understanding your customer segment during the full course. What VALUE will you be providing to your customers. It is more than just a benefit, you are identifying a problem you can solve by bringing value into your customers’ lives. A good question would be: What activities are you helping your customer accomplish?
How will you CONNECT to your customers so that you can sell your service and provide the value your business can deliver? Will you use a Store front, online, email and fliers? Which is the best to reach your customers?
What activities will YOU need to do in order to interest, capture and ultimately keep your customers? Your RELATIONSHIP to your customers is important for you to understand.
The other side of the canvas shows what it takes for you to build out your infrastructure.
What makes you competitive in the market? What RESOURCES do you have that make you competitive? Do you have something unique over your competitors? What are the ACTIVITIES you will need to do to accomplish your business goals? Marketing, distribution, sales?)
Who are your vendors and what relationship will you need to have with them in order to keep them part of the success of your business? Notice we will call them PARTNERS, because you need them in order to succeed.
What are the lines of REVENUE you can generate, and of course by identifying all of the building blocks, it will be easy to identify all of the COSTS involved to stay in business. Each of these building blocks cost you something to achieve.
Going through this process and completing your canvas works with any ideas you may have for a business. Initially you are working from assumptions or just guesses, about who your customers are, what problem will they pay you to solve, how will you reach them and keep them, and how will you make money? You will test each one of these assumptions to turn them into viable facts, to see if what you thought would work will indeed work.