Erasmus ka2+ DEBATE-GLOBAL AWARENESS GREEK TEAM
BUSINESS MODEL CANVAS
How to start a Business Model ?
Everything starts with an idea Starting a business is not as simple as some may think, and even though an idea sounds as a very easy task, it is the key to everything else that will come next. How is your company going to be organized? ď‚ž The most efficient way to think about all the parts is by a business model. ď‚ž
What is a Business Model Canvas? It’s a graphic representation of a Business Plan, a guide on how to build and organize your company.  It is how a company creates value for itself, while delivering products or services for its costumers. 
That is covered by a diagram with the following nine areas, which describe any company, from the world’s largest to a two-person startup.
What is the usefulness of a Business Model Canvas? 1.
2. 3. 4.
The Business Model Canvas gives you a bird’s eye view of your business while helping on understanding how a business works. It helps evaluate the sustainability of your company. It helps revaluate an idea in case that it does not make profit. It also helps on organizing complex ideas in smaller parts.
1.VALUE PROPOSITION
Value propositi on
The Value proposition is the idea of a business applied in a product, which connects the product with the customer .
1.Value Proposition When a company is considering on what its value proposition is, the first thing it needs to consider is, WHO is its customer and WHAT product or service is it building? ď‚ž The value proposition should be based around solving a NEED or a PROBLEM that the customer has and not simply around a random idea or product which has no purpose or market. For this reason it is best to begin with the fundamentals when putting forward a value proposition. ď‚ž
1.Value Proposition What are you building and who are the
customers? What problem are you solving for them? What product or service can you provide to satisfy your customer’s needs? What gain are you creating for them? Why will a customer have an impulse to buy? Why a customer should pick one product over another?
Here you normally list all your features and benefits.
1.Value Proposition It
is important to remember that technology is part of the value proposition. A customer is not interested in the technology, which a company can offer, he is only interested in the overall result. In other words: Does the product solve my problem or fulfill a need?
(accountancy, word processing) Does it satisfy my social needs? (entertainment, communication) If
the answer is yes, the value proposition has a good foundation.
1.Value Proposition Products have to : be innovative ->fulfill customer’s desires be unique->better, cheaper, easier, faster
than similar products of competitive companies have stable quality when they reduce the price be convenient, usable have catchy and attractive trademark and design
2. CUSTOMER SEGMENTS Customer segments define the groups of people or organizations you aim to reach or serve.
2. CUSTOMER SEGMENTS So the next thing is: Who are my customers? Who are they and why would they
buy?
2. CUSTOMER SEGMENTS As you will hear a number of times, your customers do not exist to buy, you exist for them and what you are going to do is figuring out all the geographic (town population, climate), social characteristics, demographics (age, gender, income level), such that you actually could draw and put up a picture on your wall, of who the archetype, or the persona of your customer is, and it turns out that in most startups you might have more than one types of customers, but you need to understand them in detail.
3. Channels Here we have the points at which you interact with your customers to deliver value.
3. Channels ď‚ž
How does your product get from company to the customer? We use distribution channels to do that.
3. Channels
Through which channels are our products and our services available to our customers? Which channels are more effective? Which are more expensive? Based on the above, which channels do we prefer?
-physical channels (store, sales people) -virtual channels (web, mobile such as Twitter , Instagram, Facebook, broadcast like television, radio)
4.Customer Relationships ď‚ž
How do I get customers, how do I keep them and how do I grow them?
It is like a double-sided funnel. Getting customers: you are going to be worrying about
4.Customer Relationships -how do I acquire them, that is how do I get them even to my website -how do I activate them, that is how do I make them do something After I got them: -how do I keep them around, that is how do I not lose them through attrition and churn And then: What can I do, once I have customers, to make them spend more money, or use my product even more?
4.Customer Relationships The kind of relationship you want to establish with your customer segment. ď‚ž Connecting with your customer base is important in keeping your reputation as a caring organization. ď‚ž
There are six types of relationships to have with customers : 1.Personal Assistance
Customers can talk with human assistance.
2.Dedicated
Personal Assistance Customer representatives are directly and solely connected to an individual customer.
3.Self-Service
Customers are given resources to help themselves.
4.Automated
Services Customers are given customized help usually through software and automation.
5.Communities
Customers are able to connect with other customers for help.
6.Co-Creation
Customers are able to create value for the company.
5. Revenue Streams How do you actually make money from your product or service being sold to your customer segments? What value is the customer paying for? What is the strategy of how I am going to capture that value?
5. Revenue Streams -Am I going to have a direct sale and it’s a complete transaction based on price? -Is it a premium model, where in am going to give away the product for free and hope that some portion converts later? -Is it a license or subscription model? -What euro amount am I going to be charging? -How do your customer Segments purchase your Value Proposition? - What price are they willing to pay? -Which is the current price of your product/service? -How do they prefer to pay? -How does each revenue stream contribute to the total expenses?
Revenue Streams
6.Key Resources What do you need to make the business model work? What assets are important? What finance do you need?
The four types of resources that we need to sustain our business and make value: 1. Physical (Facilities, buildings, vehicles, machines, distribution networks, vans, delivery cars) 2. Financial (Capital, financial guarantees, lines of credit) 3. Intellectual (Copyrights, partnerships, customer databases, patent to acquire or protect) 4. Human (Key people involved in business activities, software programmers, hardware designers, manufacturing people). What specifically do you need to do, to keep these people and who are they.
7. Key Activities ď‚ž
These are Activities that enable you to fulfill your value proposition.
ď‚ž
Are you in the production business, or are you in the problem-solving business, like you are doing consulting or engineering, or are you managing supply chains?
What are the activities you need to become expert at and make the business model work?
1. 2. 3.
4. 5.
Selection and checking of the channels. Proceed on coming up with a value proposition. Choosing a kind of customers relationship through data analysis and corporate communication. Building customers relationship Accounting observation of the revenue streams
8. Key Partners Other agents you rely on to create and deliver value -Who are your key partners and suppliers and distributers? -Which key resources are they supplying your business with? -What does each partner execute? -What exactly are we acquiring from partners, what activities are they going to perform and when?
8. Key Partners
9. Cost Structure What costs and expenses does your business have in order to function effectively (and not just the obvious ones like people or buildings or materials) What are the entire costs to operate the business model? What are the highest costs of your key resources? What are the highest costs of your key activities?
9. Cost Structure Characteristics of Cost Structures Fixed Cost: costs that remain the same no matter the volume of goods or services produced (registration fee, equipment hire, rent, etc.) ď‚ž Variable Costs: costs that change proportionally to the volume of goods and services produced (costs of raw materials, NOT salaries) ď‚ž
Sources 1.
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https://www.lucidchart.com/blog/busine ss-model-canvas-101-a-step-by-step-gui de-to-strengthening-your-strategy https://www.alexandercowan.com/busi ness-model-canvas-templates/#Step_3 _of_10_Channels https://www.instructables.com/id/Howto-Make-a-Business-Model-Canvas/ https://www.cleverism.com/key-resource s-building-block-in-business-model-can vas/ https://www.youtube.com/watch?v=6