The Business Model Canvas for Small Businesses

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This short presentation explains how to use the Small Business Canvas as a planning tool instead of a complex business plan. This will be available on YouTube in video form soon.

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  • Business models can be an effective alternative to business plans especially for small or startup companies. Steve Blank has developed a model that I have adapted for use with my small business clients.
  • The Business Model Canvas for Small Businesses

    1. 1. Problem Solution Value Proposition Unique Advantage Customer Segments The Business Model Canvas … The “Un-Business Plan” Key Metrics Channels Presented By Art Helmstetter Cost Structure Revenue Streams Developed by Steve Blank
    2. 2. Business Model Canvas Problem Solution Value Proposition Unique Advantage Customer Segments How is a business model different than a business plan? 1. It is an empirically based system that 2. Forms a hypothesis around a market/business Key Metrics Channels 3. Tests the hypothesis on “real” customers 4. Revises the concept and tests it again if needed 5. Simplifies the key business concept 6. Speeds market entry and response changes rapidly 7. Can test numerous hypotheses at once Revenue Streams Cost Structure
    3. 3. Build The Model Piece By Piece Problem Solution Key Metrics Cost Structure Value Proposition Unique Advantage Customer Segments Channels Revenue Streams
    4. 4. Define The Problem Solved Problem The SPECIFIC customer problem(S) that you solve • • • • • A financial need A need to live or exist A required function more efficiently An emotional desire Need to simplify or speed something Be as specific and detailed as you can to pinpoint the problem or need met
    5. 5. Define Customer Segment(s) Customer Segments Specific and common characteristics of the customer • Business (B2B) or Consumer (B2C) • Geographic location • For business – – – – Size of segment ? Lifetime Sales Value? Size of company, industry, culture etc. Buying behavior quality/price • For Consumer – Age, gender, cultural or family orientation – Size and number of purchases – Preferences for service, quality, price, etc. An any others which define the customer
    6. 6. Unique Value Proposition Value Proposition Specific and detailed explanation of how your offer provides unique value to customers • • • • Statement of the offering, Its benefits, Differentiation, and Value provided to customers (net of benefits value minus cost) • Examples: Newness, Performance, Customization “Getting the Job Done” Design, Brand/Status Price, Cost Reduction Risk Reduction Accessibility Convenience/Usability
    7. 7. State Solutions Provided Solution Provided Specific and detailed explanation of how you solve the problem or meet a need • • • • • • Provide a financial benefit Fill a need to exist or live Perform a required function Fill an emotional desire Simplify or do something faster Improve quality
    8. 8. Competitive Advantage Competitive Advantage Detailed explanation of the uniqueness of your offer, market position, or relationships • The KEY element that competitors cannot match. • Core function that provides differentiation from competitors. • Assets, intellectual property, employee skills or relationships, proprietary systems • Control of commodities or raw materials via ownership, licenses or contracts • Unique customer relationship or interaction
    9. 9. Channels to Customers Channels How can you reach and serve your customers most efficiently? Channel phases: 1. Awareness - How do we raise awareness about our company’s products and services? 2. Evaluation - How do we help customers evaluate our organization’s Value Proposition? 3. Purchase - How do we allow customers to purchase specific products and services? 4. Delivery - How do we deliver a Value Proposition to customers? 5. After sales - How do we provide post-purchase customer support
    10. 10. Key Metrics Key Metrics How do we measure the effectiveness or productivity of our key activities and resources? Key Activities • Sales & Marketing • Production • Problem Solving • Platform/Network Key Resources • Physical • Intellectual (patents, copyrights, data) • Human • Financial
    11. 11. Cost Structure Cost Structure What are the most important costs of key resources and key activities? Is your business more: • Cost Driven (leanest cost structure, low price value proposition • Value Driven ( focused on value creation, premium value proposition) Can you control key costs through : • Economies of scale • Economies of scope
    12. 12. Revenue Streams Revenues For what value are customers really willing to pay? For what do they currently pay? Revenue Sources: • Asset sale • Usage fee • Subscription Fees • Lending/Renting/Licensing • Brokerage fees • Advertising/exposure Revenue – Costs = Profitability
    13. 13. Problem Solution Problem Unique Value Proposition Unfair Advantage Solution Unique Value CustomerKey Metrics Segment Channels Unfair Advantage Cost Structure Revenue Streams Cost Structure Revenue Streams Customer Segments (SPECIFIC)
    14. 14. Problem Solution Key Metrics Cost Structure Value Proposition Unique Advantage Customer Segments Channels Revenue Streams
    15. 15. Thank you for your time Contact Us Now To Find Out More About The Business Model Process Or call 937-985-0481
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