Coaching Session 3 – Business Model Canvas

Lesson Notes

In this lesson:

  • Learn how to create a Business Model Canvas.
  • Identify the different building blocks of the Business Model.
  • Create a Business Model Canvas.

Course Exercise

The Course Exercises comprise your Portfolio Assignments so make sure you answer all of them.

Portfolio

Put all your application assignments in one Slide Deck unless specified.

Business Model

A business model describes the rationale of how an organization creates, delivers, and captures value.

Why is a Business Model important?

  • It will help clarify your business ideas.
  • Create customer value
  • Attract customers
  • Make your business stay competitive, and plan out your costs and projected revenue.

The Business Model Canvas is a strategic management template that helps businesses to describe, design, and analyze their business models.

Nine Building Blocks in the Business Model Canvas

  1. Value Proposition
  2. Customer Segments
  3. Channels
  4. Customer Relationships
  5. Revenue Streams
  6. Key Resources
  7. Key Activities
  8. Key Partnerships
  9. Cost Structure

Value Proposition

Describes the products and services that create value for a specific Customer Segment.

Value is:

  1. Price
  2. Benefit
  3. Principles
  4. Beliefs
  5. Appraisal
  6. All of the Above

Osterwalder

  • The benefits customers can expect from your products and services

Course Exercise

  • List down the features and benefits of your products.
  • Select the top 3 Value Propositions that you feel you can deliver to your customer successfully.

Market Segments

  1. Geographic Segmentation
  2. Demographic Segmentation
  3. Psychographic Segmentation

Geo-Targeting is marketing to a set of specific users based on their location. By using geo-targeting, you can find customers by zip code, city, or country.

Geographic

Segmenting your target market based on where the consumers are located.

Demographic

Include consumer characteristics such as

  • Age
  • Gender
  • Race
  • Marital Status
  • Income
  • Education level
  • Occupation.

The Female Economy

The female consumer confidence index increased 12 points over that time, from 91 in fourth-quarter 2013 to 103 in fourth-quarter 2018.

Psychographic

Describes consumers based on their interests, attitudes, opinions, and lifestyles.

Example Customer Segments

  • Millennial Moms who work from home.
  • Filipino Freelancers
  • Families living in condominiums or homes in mid-cost subdivisions.

Course Exercise

  • Evaluate your Selling and Value Proposition.
  • What Customer Segment are you serving?

Channels

  1. Selling Platform or Location
  2. Social Media Platforms to raise awareness about your brand.
  3. Websites
  4. Resellers
  5. Wholesalers

Course Exercise

Identify your Channels.

  1. Where are you going to sell your products services?
  2. What channels are you going to use to communicate your Value Proposition to your customers?

Customer Relationships

The categories of Customer Relationships are:

  1. Personal Assistance
  2. Dedicated Personal Assistance
  3. Self-Service
  4. Automated Service
  5. Communities
  6. Co-Creation

Course Exercise

Identify the Customer Relationships you’ll be having per Value Proposition per customer per segment.

Revenue Streams

The revenue stream section of the Business Model Canvas indicates how your business will generate revenue or sales.

Different Pricing Mechanisms

  1. Fixed Price
  2. Bargaining
  3. Auction
  4. Market Dependent

2 Types of Revenue Streams

  1. One Time Transaction
  2. Recurring Revenue

Revenue Streams

  • Asset Sale
  • Usage Fees
  • Subscription Fees
  • Lending Fees
  • Licensing
  • Brokerage
  • Advertising

Course Exercise

  • Identify the different revenue streams of your business.
  • List your pricing strategy and mechanisms as well.

Key Resources

Your key resources will help you earn the revenue you need to keep your business going.

  1. Physical
  2. Financial
  3. Intellectual
  4. And of course, Human Resources

Physical

These are the tangible assets you own to create your value proposition for your products and services.

  • Buildings
  • Vehicles
  • Machinery
  • Systems

Intellectual

Intellectual resources like your brand may be difficult to develop. Later on, they will be significant in creating value for your customers.

  • Branding
  • Proprietary Right
  • Patents & Copyright
  • Industrial Partnerships
  • Customer Database

Human Resources

One of the indispensable resources that your organization or business should have is your human resource.

In a service-oriented business, your human resource is crucial in the creation of your value proposition.

Financial Resources

Course Exercise

Identify and list down the key resources you need for your business and deliver your proposition.

You may list them by category.

  1. Physical resources
  2. Intellectual resources
  3. Human resource
  4. Financial resources.

Key Activities

Your key activities comprise your business operations.

  1. Production
  2. Problem Solving
  3. Platform

Production

Your activities are related to designing, making, and delivering a product in volume or a certain level of quality.

Problem Solving

When you are a service-based business, problem-solving dominates your key activities.

  1. Consultancies
  2. Hospital
  3. Design
  4. Events Management
  5. Project Management
  6. Coaching

Platform or Network

Networks, match-making platforms, and software can function as a platform.

Key Partnerships

It describes a network of suppliers and partners that you need to make your business model work.

Types of Partnerships

  1. Strategic alliances between non-competitors
  2. Cooperation with competition – this is a strategic partnership between competitors.
  3. Joint ventures to develop new businesses.
  4. Buyer supplier relationships to assure reliable supplies.

Examples:

  1. Bakery – Café
  2. Gadget Store – Brands that sell wholesale products
  3. Digital Agency – Freelancers
  4. Cleaning Service – Property Management Services; Cleaning Solutions Suppliers

Course Exercise

List down the key activities, and key partnerships that you need to forge for your business to become successful.

Cost Structures

It describes all costs incurred to operate a business model. You are creating and delivering value first. To calculate your cost structure, review your key resources, key activities, and key partnerships.

Course Exercise

Create a table. List down the resources, activities, and partnerships that would incur a cost & the amount.

 

Portfolio

Use this: Features and Benefits Sheet

Download the Business Model Canvas Template and fill out the building blocks with your answers to the course exercise.

 

Email Subject: BPD – Portfolio 3

 

PORTFOLIO SUBMISSION GUIDES:

1. Video-On-Demand (VOD) Access
Submit your portfolios to courses@surgedigital.agency.
You can submit individually per coaching session or submit all required portfolios as one, in one email (attach your Google Drive).

2. VOD with Class Coaching
Send your portfolios to courses@surgedigital.agency.
Please submit individually per coaching session.

3. VOD with Mentoring
Send your portfolios to courses@surgedigital.agency.
Please submit individually per coaching session.

4. Premium Members
Submit your portfolios to courses@surgedigital.agency.
Please submit all required portfolios as one, in one email (attach your Google Drive).

 

What have we covered?

  • The value of a Business Model Canvas and how it could help you design your business model.
  • You are now aware of the building blocks.
  • You learned to create your own business model canvas.

Start-ups don’t fail because they lack a product; they fail because they lack customers and a profitable business model. – Steve Blank.

 

CONTACT US!

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