Building a Business Model From Scratch
How to elaborate your business plan. What is Business Model canvas and how to create one for your business?
A business model can tell everything about the business, like the product, service, or any other outcomes of it. It comprises a detailed description of every possible activity of the business, various workforce, their roles in the business operation, revenue sources, benefits of a certain process and more.
To elaborate your business model, you’ll have to develop a business model canvas. It will generally answer almost all your business related queries.
What values do we deliver through our business? What are the sources of our revenues? How much do we spend to deliver those values? Is there a possibility to change our business model? Is our business model efficient enough?
When you start analyzing these elements, you’ll understand whether your business model is good, or you need to change it. A business model can be elaborated in different ways, but developing a business model canvas will help you come up with a more practical elaboration.
What is a Business Model Canvas
Business Model Canvas is nothing but a strategic business management template that can be used for documenting the business strategies of existing or an upcoming business set-up. This lean start-up model will assist in developing the entire operational plan of any business.
A business model canvas will give you a detailed structure of a business plan, without any bottlenecks and give you a clear idea about the entire business operation.
It delivers a great amount of focus, flexibility, and transparency towards your software product development and helps in acquiring market value for the same.
Creating a Business Model Canvas
A business model canvas is made up of nine elements. All these elements work together to provide a comprehensive idea about the important driving factors of a business.
1. Customer Segments (CS) — Who buys my product/service? What’s their response? What do they think? Feel? See? About my software product?
2. Value Propositions (VP) — What factor encourages customers to buy it? What’s the compelling factor in it? Why customers buy it?
3. Channels (CH) — How is my product promoted or sold? What are mediums through which buyers get to know about it?
4. Customer Relationships (CR) — How do we treat our customers during their association with us? Are they happy about our approach towards them?
5. Revenue Streams (RS) — For what values are the customers actually willing to pay? What do they currently pay? What is our revenue model?
6. Key Resources (KR) — What are the utmost essentials for our business? What factors like, Revenue streams, customer support, etc can’t be compromised upon?
7. Key Activities (KA) — What are the unique ways in which we make our value proposition? What are our main activities in distribution, customer support, and many other fields?
8. Key Partnerships (KP) — Who are our suppliers, buyers, and partners? What key recourse are we acquiring from them? How do they influence our software product development?
9. Cost Structure (CS) — What’s the cost structure of our product? What are our expensive resources/developmental processes? Can we increase cost with product improvement?
Make sure to document the Business Model Canvas and revisit it regularly to ensure that your business operations are working as per your periodically revised business model.
Now that you have build a business model successfully, you can go ahead and set your foot in your business operations.
Thanks for reading! To learn more about building your own start-up business check out our e-book “The Definitive Guide To Building Your Own Innovative Software Product”
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