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Why do some CEO’s and business owners seem to know exactly what tasks they need to accomplish to expand their business, while others waste too much time on issues that don’t move the business forward?
How much energy are you willing to waste chasing the next shiny object? The next Facebook ads trick, or secret. Really, we spend too much time chasing the next fad…
Every year we hear of a couple of businesses that hit the “timing lottery”, and all of a sudden the “get rich quick” ads and systems are flying all over social media.
Unfortunately, this usually ends bad for most who try to mimic that model, and many business owners (and the public) end up with a very negative perception of business development and marketing in general.
Do you know what small specific business objectives and activities that you need to focus upon in order to expand your market share or add additional revenue streams to your business?
The only way you’ll know what to focus on is to have a concise picture of your business, AND what you’re trying to accomplish.
Am I really describing a business plan? Not the way I remember one!
When was the last time you looked at your business plan? Yeah, that’s the sometimes scary document that people put together to get a loan, or prepare as part of an undergraduate, or MBA class.
Do you remember that mass collection of data, statistics, revenue projections, and the amount of effort it took to pull it together?
For most that actually do this (and many do not), this is the document that is now either buried under 3 years of paperwork, or has collected enough dust that hazmat needs to be called in order to transfer it to the shred basket.
If it was created, it may have been presented once. Once the day-to-day issues of cash-flow and payroll take over these real issues dominate the priorities, and the high level vision that was captured is only occasionally thought about and rarely focused upon.
To shift from a pure tactical situation, you must be able to concisely communicate and focus on the areas that matter.
As an entrepreneur, if you do not possess either clarity or focus, the number of problems and roadblocks that you are going to face will expand significantly. Are you able to communicate your business so clearly that anyone can understand it without a 30-minute speech?
So, would a 1-page document be valuable to you as an entrepreneur so that you could:
I’d like to introduce you to a tool that I’ve been successfully using on campaigns for several years, and it’s saved me countless hours, and made my clients millions of dollars.
It’s called the Business Model Canvas.
The Business Model Canvas provides you a 1-page look at the most critical components of your business. It also does this without the stress and confusion of a business plan.
And, you can use this model for specific growth campaigns and initiatives to grow your business.
It has 9 elements:
These 9 elements provide ALL the critical pieces of both your business, and how you grow or expand it. (This very model has been used for brand new startups and multi-billion dollar corporations). It’s perfectly aligned with the needs of the entrepreneur.
Here are the 9-elements:
Now that you have an overview of the Canvas, let’s take a look at the pieces of the model. Once you have an understanding of the structure, you can quickly put it to use and immediate realize the impact to your business.
It’s time to dig into each section with a little more detail. With the 9 components, having a good understanding of each is important as you prepare to develop your first Canvas.
The first time you go through the Canvas, I simply recommend you print out the document and use “post it” notes to add content to each section. I’ll get a little more specific in a minute, but first want to explain the pieces to you.
The urge is to use something more permanent (marker, pen, powerpoint, keynote, etc), but the goal is to quickly iterate and move the pieces of your business around. To allow your mind to make connections that wouldn’t normally be evident.
It will quickly become very clear what your gaps are, and the next actions you need to take to refine your growth path!
A small point of order, but not all 9 sections are created equal. There are specific sections that carry more weight, and many times this can vary from industry to industry.
In my experience, the time spent on the customer segment and value proposition section will pay significantly in your business.
Every business has multiple customers that they sell their products or services to. For brick-and-mortar businesses, they have the opportunity to tailor messages to each of those avatars and the messaging is consistent.
When you’re dealing with web based businesses or advertising for the internet, generic targeting will not attract customers as it just gets lost in the noise.
When you are developing avatar’s, or ideal customer profiles, you need to get as specific as possible. For EACH ONE, realize that you need to be so specific that you ultimately are talking to an individual.
What are their needs? Their problems? What are they frustrated about? What are their pain points?
What does a day-in-the-life look like for each one?
It’s actually a good thing if this section takes a good amount a time, so you get it right.
TIP: Write down the exact words, phrases, and expressions that these avatars use. This will form the basis of key parts of copy that you can use later in your messaging materials.
Now that you have needs/frustrations/pain points aligned with specific avatars, we look at what your solutions provide.
Again we want to get specific!
You know the features of your product/service by heart, but we need to get to the benefits.
These are the “value added” pieces (that go beyond the features) and build your value proposition from the benefits you deliver.
While you’re working in the Canvas, don’t worry about having too many value propostions. (That’s why we used “post it” notes). Write them all down.
Once you have written all your value propositions down, align them with the specific avatars. This traceability will help you later.
Finally, you’ll want to rank them to identify those that are the most important.
Remember the goal of this is to identify the value proposition which will cause a customer to pick your offer over a competitors.
Simply, this is how you communicate with your customer.
There are many channels to market. Examples include; storefront, mailers, direct mail, news papers, radio, television, and of course the Internet.
But, even on the web there are channels: Facebook, Twitter, Instagram, Snapchat, Google, and the list does on.
Each channel has it’s pros and cons, so how do you decide in which channels to invest?
That’s part of the reason you’re building your Canvas. Look at your avatars! Do they have specific channels that they use? If so, then it makes your decision making simpler.
As you start to build specific action plans, it doesn’t take very long to build a Canvas for each Avatar, and then the specifics become more clear.
The Channels and the Customer Relationship (next) elements make up the customer journey. It’s important to think through the customer journey, from your customer’s perspective, so that you are clear on the content, messaging, and value proposition alignment.
This element is all about how your customer interacts with you, your product or service throughout the lifecycle.
If you’re building growth campaign, then focus on the customer acquisition pice of the customer journey. However, don’t neglect the product delivery and servicing for your baseline Canvas.
The Customer Relationships is where you’ll find the majority of what’s commonly referred to as a marketing or sales funnel.
Do you see your product or service is only going to be sold through you personally? Is there a dedicated sales page available? Is your product a Jeff Walker style launch? Is this a multi-touch marketing campaign, tied to a webinar?
The balance is that a funnel is built from the businesses perspective, whereas a customer journey is from the customers perspective. The closer they align, the more effective the relationships will be developed.
Remember that your customer journey is not only channel dependent, but may also be avatar dependent. This is another case to document everything, and test it against real data. Using the Cavas to document your assumptions is fine, just mark them so that they aren’t treated as facts.
If you’re using the Canvas as a strategic tool to plan for growth campaigns and initiatives, then focus on the customer acquisition of the business.
I’m sure that you understand the principle of a revenue stream, so we’ll skip over the importance of them…
This element is setup to connect multiple Canvas elements to a specific revenue stream. For example, Revenue Stream #1 traces to Avatar #1 which ties to Value Proposition #2 using Channel #1 and Customer Relationship #3.
One thing that I have seen in my experience is that we as entrepreneurs make it too complex. Buyers are pretty simple people, if you can help someone and they “need” your product or service, then they’ll buy it.
We spend a lot of time, energy, and money building complex systems when a simple approach will work. Instead of adding steps into your system, where can you take them out?
What have you learned about your Offer and your Customers? Do you have any gaps? Do you have an element where you had to make a number of assumptions? (Write them down so we can prove or disprove them!)
The next steps within the Canvas will focus upon the things you’ll need to do in order to actually execute.
These are the key issues, actions, and activities that your business needs to deliver what is sells. This could be a product or a service.
This element is going to be different for every business.
For example, if you’re looking to expand a digital revenue stream, using Facebook advertising delivering a comprehensive software solution to consumers of heart and fitness products.
There would likely be specific research into the pain points of a specific avatar to ensure the software has the critical features. There may also be a number of Key Activities in the Facebook Channel, as well as creating a delivery and support services to ensure that the customer has a good experience with the software.
Although this is just an example, you can see how all the work you did in the earlier sections will provide you with the activities you need to actually focus upon to deliver your product or service.
The linkage here, is back to the Value Proposition. If you find your key activities are too focused on other areas, this is a flag that you are consuming cycles (MONEY) on tasks that are not directly focused on revenue generation.
These are the critical assets that your business needs to create your Value Proposition. They work between the Customer Segments, and (ideally) earn revenue for your business. These assets can come from yourself, your staff, and even other Key Partners.
Every business has assets the help them build their value proposition, and if you’re working to extend your business Online these may look a little different.
Here are some examples of assets that you may not have considered:
More traditional assets include:
As you map your Key Resources against specific value propositions, you should naturally see strengths and weaknesses. If you missed any Key Activities, go back and add them into that section of the Canvas.
Verizon says it’s all about the network. Here’s where your network comes into play!
You may choose to partner for a number of reasons, but I have seen partnerships increase in significance over time. The reason is simply, you can make a larger impact working with another organization that you can by yourself.
There’s an expression that I’ve heard a few times, and more successful I’ve been in building businesses the more it rings true: Businesses that are struggling compete, businesses that are prospering collaborate.
There’s so much value to partnering with businesses who complement what you do. Even businesses that may naturally be competitors provide amazing support because you can’t be everything to everyone.
The truth is that very few of us own all the resources or can perform all the activities needed for your Canvas. The opportunity to extend reach, shorten the “time to market” curve, or even just expand the reach of your business is well worth partnering with another business.
A couple of questions to get you thinking, can you Partner to…
This element is designed to capture the costs incurred to operate this Canvas. If you’re segmenting a piece of your business, or running a specific campaign then ensure you capture the costs for that specific activity.
Linking back to your Key Resources, Key Activities, and Key Partnerships should give you a very strong position on the costs associated with this specific Canvas.
There’s a trend ongoing to compete on price. To make things as inexpensive as possible. Now there are entire industries who use this “Low Cost” model and run a successful business.
For me personally, that’s not a business that I prefer, so I focus much more on adding value.
Obviously you want to minimize your costs, and you need to have a good understanding of all your costs to ensure you are pricing effectively. The choice of how you compete in the marketplace, price or value, it entirely up to you as a business owner and the specific business you’re operating.
Key questions to consider.
Now that you understand the elements, it’s time to build out your Canvas.
In a few short minutes (around 20 for a first pass) you’ll have a fairly good strategic look at your business, as well as a roadmap of the specific actions you’ll need to work on to strengthen your business.
A vision of your business for you, or one that you’ll be able to quickly share with your team.
Print out a copy of the Business Model Canvas on as large a paper as you have. Ideally, it would be a poster or large white board where you can quick put notes up, move them around, and take them down.
Personally, I use a whiteboard and just label the key sections. Once I’ve placed post-it notes all over, I can take pictures with my phone and transfer it to a Canvas if needed. Usually, I just print the picture and that’s my guiding document while I’m working on a series of Key Activities.
It doesn’t matter which block you begin with, but take the time and sketch out your current (or envisioned business).
Ask yourself, is it complete? If there’s a post-it note, but it doesn’t relate to the other elements you have created an orphan on your business.
Are you able to communicate your vision? Here’s a great exercise that I was taught, and have employed previously:
After you have a first model on your Canvas, pull all the post-it notes down. Tell the story of your business, one post-it at a time, and place them on the Canvas.
This forces you to communicate a clear vision of the model or campaign that you are tying to implement. If you have problems with this exercise, then take time in the specific elements that are giving you challenges to clarify your inputs.
Use the same Excel template shown, and jumpstart your action!