Lesson 3: Business Model Canvas

What You’ll Learn: When it comes to transitioning an idea into a business, the Business Model Canvas is one of the fastest and best ways to think through your business before you spend a dime. It offers a time-saving shortcut to the traditional business plan process and will quickly give you insights into the viability of new your idea. 

Business Model Canvas (continued)

Key Activities

The principal activities you list in your Business Model Canvas should cover how you will fulfill your value proposition, reach your customer segments and maintain productive customer relationships while generating revenue.

This is where the rubber meets the road. There are three basic categories for this section:

Production: This covers the design, manufacture and delivery of a product in significant quantity and quality.

Problem solving: Finding new solutions to individual problems that are faced by customers.

Platform/network: Creating and maintaining a platform that can support partner or third-party products or services.

Key Resources

This one should be fairly obvious. What resources are required to engage in your key activities, create your value proposition and generate revenue? These resources include human (employees), financial (cash, credit lines, liquid assets), intellectual (brands, patents, copyrights, intellectual property) and physical (real estate, equipment, inventory).

Key Partners

Who can go it alone these days? In this square jot down all the suppliers and external companies you need to carry out the key activities. These can be strategic partnerships between non-competitors, partnerships with new partners, a partner you’re developing new business with or suppliers who will ensure the reliable delivery of supplies or raw materials.

Cost Structure

Here you’ll want to identify all the costs that are associated with operating your business model. Costs include creating and delivering on your value propositions, maintaining customer relationships that result in a transaction, and expenses related to starting and operating your business.

There are two ways to think about costs. You can be:

  • Cost-driven, i.e., minimizing costs whenever possible, or
  • Value-driven, focusing on providing maximum value for the customer. Think Ford vs. Tesla, or Android vs. Apple.
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