The Business Model Canvas gives people a structured way to design a business. The goal is to create a business model that is both unique, and can compete in the market. It is an ideal way to check the logic behind why customers will buy your product or service. It also provides a way to understand how all the different elements that makeup a business come together to deliver your products or services: the cost structure, value proposition, customer segments and revenue model.

In this assignment students will select one of the ideas that they came up with as part of the Self-Reflection for Opportunity Creation exercise, and start thinking about how that idea could be turned into a profitable business by creating a business model around it.

After reading Chapter 5 and completing the video quiz, fill out the attached Business Model Canvas for one of your ideas using the guide provided by Issac Jeffries. Your grade will be determined by the depth of thought given to each of the nine different parts of the business model.

Designed for: Designed by: Date. Version: Business Model Canvas Key Partners Key Activities Value Propositions Customer Relationships Customer Segments Who are our Key Partners? Who are our What Key Activities do our Value Which one of our customer's problems What type of relationship does each of For whom are we creating value? Who key suppliers? Which Key Resources Propositions require? Our Distribution are we helping to solve? What bundles our customer segments expect us to are our most important customers? are we acquiring from partners? Which Channels? Customer Relationships? of products and services are we offering establish and maintain with them (e.g. What are their Jobs, Pains, and Gains? Key Activities do partners perform? Revenue streams? to each customer segment? What pains personal assistance, dedicated do we minimize? What benefits or gains assistnce, self-service, automated, MOTIVATIONS FOR PARTNERSHIPS: CATEGORIES: are provided? communities, or co-creation)? Optimization and economy, Reduction of Production, Problem Solving, risk and uncertainty, Acquisition of Platform/Network particular resources and activities Key Resources Channels What Key Resources do our Value Through which channels do our Propositions require? Our Distribution customer segments want to be Channels? Customer Relationships reached? Are they owned or partnered, Revenue Streams? direct or indirect (e.g., sales people, web sales, stores, partner locations, or TYPES OF RESOURCES: Physical, wholesalers)? Intellectual (brand patents, copyrights, data), Human, Financial Cost Structure Revenue Streams What are the most important costs inherent in our business model? Which Key Resources are most For what value are our customers really willing to pay? For what do they currently pay? How are they expensive? Which Key Activities are most expensive? currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? IS YOUR BUSINESS MORE: Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing), Value Driven (focused on value creation, premium value proposition). TYPES: Asset sale, Usage fee, Subscription Fees, Lending/Renting/Leasing, Licensing, Brokerage fees, Advertising SAMPLE CHARACTERISTICS: Fixed Costs (salaries, rents, utilities), Variable costs, Economies of scale, Economies of scope FIXED PRICING: List Price, Product feature dependent, Customer segment dependent, Volume dependent DYNAMIC PRICING: Negotiation (bargaining), Yield Management, Real-time-Market Designed by: The Business Model Foundry (www.businessmodelgeneration.com/canvas)Designed for: Designed by: Date: Version: Business Model Canvas Key Partners Key Activities Value Propositions Customer Relationships Customer Segments Key Resources Channels Cost Structure Revenue Streams Designed by: The Business Model Foundry (www.businessmodelgeneration.com/canvas). Word implementation by: Neos Chronos Limited (https:/eoschronos.com). License: CC BY-SA 3.0ISAACJEFFRIES Sep 8 How To Fill In A Business Model Canvas Business Modelling (/blog/category/Business+Modelling) The Business Model Canvas (https //isaacjeffries.com/blog/2017/10/14/free-ebook-building-a-strong-business-model) is : it to be understood, tested and improved.The tool is a single page with nine connected boxes, which show how all parts of your business work together for succ ISAACJEFFRIES tin or notepad. Filling one in can take between 15 and 30 minutes, and this guide will make the process clear and straightforward. We'll look at some entrepreneurs as they fill in their own canvases - it's much easier if you get to watch somebody else They are: Josh - creating a bamboo toothbrush that's both stylish and environmentally beneficial. Kylie and Dan - running Indigenous cultural experience programs for schools and families. Anna - selling a range of chilli sauces that are made in Fiji. The Business Model Canvas Designed for. Dangned by Key Partners Key Activities O Value Propositions Customer Relationships Key Resources Channels Cost Structure Revenue Streams 90650 Business Model Carwas, strategyzer.com Step 1: Naming the purpose of the business Without a clear purpose, how will we know if a model is good or not? This can be whatever you like, such as: To earn a passive income from home To prevent the destruction of Indonesian rainforestsTo improve the financial stability of our parent organisation ISAACJEFFRIES of being homeless To improve the job hunting process The great thing about this is that we now have a criteria for assessing our ideas, and have some inspiration for creative Josh - "To reduce the amount of plastic that goes to landfall" Kylie and Dan - "To preserve and celebrate indigenous culture, and explain its relevance in our daily lives" Anna - "To create meaningful employment in Fiji" Step 2: Customers and Value Propositions There's no particular order you have to follow on a canvas, although I've found this to be the best place to start. Your business is centred around your customers, the people who you believe will be motivated enough to try your new sort of compelling benefit. This is a real person, someone who is walking around right now. They're looking for solutions to their current problems, and like finding ways to make their lives easier. Our job is to get a good understanding of this person: What are their jobs, tasks and obligations? What are their hopes, dreams and aspirations?What are their core beliefs and worldviews? ISAACJEFFRIES it get what they want? This is what we list in the Customer Segments box (https://isaacjeffries.com/blog/2017/3/6/bmc-part-two-customer-segr Firstly, we group our customers into clusters, describing each of them by their common characteristics, i.e. small busine Secondly we write helpful descriptors (https /isaacjeffries.com/blog/2016/1/6/8-better-way-to-describe-customer-segme These might be Demographics like age, race, gender, height, income or postcode. These might be Psychographics like their political views, altruism, biases or preferences. Keep in mind that our customers are the people who make decisions and pay for our products/services (not to be conf In the Value Propositions (https://isaacjeffries.com/blog/2017/3/6/bmc-part-three-value-proposition) box, we describe wl This isn't about what we sell them, but rather why it matters These might be Gain Creators like increased social status, wellness, professional credibility or indulging our guilty plea: These might be Pain Relievers like fear of exclusion, social shame, regaining wasted time, or reduced anxiety. We want to understand how our products/services make their lives better, to the point that customers will happily pay u Josh - We have two customers: 1. Young professionals who want to buy cool, environmentally friendly gifts for themselves and their friends. They love the aesthetics of the brushes and the story of the movement. It's a simple way of doing something cool. 2. Mothers with young children, who want to create a mindset of environmental responsibility in their daily decisions. They like the personalised colours of each brush, and by making teeth brushing fun they get fewer objections from the Kylie and Dan - We have two customers: 1. Schools who want workshops and incursions for their primary students. They love how engaged the students are, and that it's a great way to incorporate NAIDOC week each year. 2. Couples and families who want to learn more about Indigenous culture. They love learning about the rituals, connecting with nature and with the land, and the feeling they get from having a w Anna - We have three customers: 1. Supermarkets who stock our sauce. They love interesting products with good margins and high turnover. 2. Cafes and burger shops. They love having interesting brands of sauce that engage their customers, and hot sauces that are spicy without sacrifi 3. Home cooks, people who like chilli sauce. They love the brand and its cheeky packaging, and the unique heat/flavour of the sauce.ISAACJEFFRIES Step 3: Channels and Customer Relationships Now that we have a clear picture of who we're serving and how we'll delight them, we get to design three things; how how we interact with them. The Channels box (https//isaacjeffries.com/blog/2017/3/27/bmc-part-five-channels) is our chance to explain how we firs we deliver our Value Proposition. For example, your business might find customers through Google Ads or Facebook, then serve customers through face packages. We list both of these methods here. The Customer Relationships box (https/isaacjeffries.com/blog/2017/3/18/bmc-part-four-customer-relationships) outlines Are we hoping for a long term relationship, or a short term relationship? Does each customer need to speak to a person, or use technology? If so, does it need to be a particular person, or the same one each time they come back? Will we need to work harder to acquire our customers or to retain our customers? Does one tend to happen more naturally than the other? These two boxes tend to pair neatly together. By understanding our customer, their desires and their preferences, we can identify the best methods for recruiting andJosh - Our acquisition channels are Instagram and word of mouth, whereas our main delivery channel is through mail c ISAACJEFFRIES e loyal, and our transactions are highly automated. Once we find a way to tell the story and show them how great the product looks, it's easy to get an order. Kylie and Dan - Personal referrals are our best acquisition channel, but we're keen to find new ways of reaching decisi usually make decisions six months in advance. Our online presence will need to improve, and we're about to start testing keywords. Most of our customers come back each year, so our focus is on acquiring new customers, especially in off-peak times. Anna - Supermarkets and cafes need an in-person pitch meeting, to hear the story and see the product for themselves We have a hard time with retention, so there needs to be a long term personal relationship with each manager. Our direct customers come through our online channels, but tend to only order once. HYSTER IOBARREL HYSTER40 Step 4: Key Resources, Key Activities and Key Partners These three boxes describe how the business will work "behind the scenes" - all of the operational components that n We want to list all of the vital ingredients, important processes and invaluable allies that enable our business to exist. Key Resources (https.//isaacjeffries.com/blog/2017/3/27/bmc-part-five-key-resources) are the people. places, machines, every week. This is not a complete inventory, but a list of the resources that, if lost, would prevent the business from functioning-Key Activities (https:/isaacjeffries.com/blog/2017/4/3/bmc-part-seven-key-activities) are the processes and tasks that mi ISAACJEFFRIES e.g. If you were to go on Holiday, what would your replacement need to do in order for things to continue to run smoot These might include sales calls, workshop delivery, meal preparation or writing reports. In particular, these are the activities that you do particularly well. Since every business does a little bookkeeping. that's probably not your Key Activity...unless you're an accounting firm. Key Partners (https/isaacjeffries.com/blog/2017/4/4/bmc-part-eight-key-partners) are the people and organisations that shoulders. They might supply raw materials or finished goods, send customers your way, or act as a sponsor/enabler. Which external supporters are essential to the model? Who could make life difficult if they were to leave? There's some flexibility in these three boxes, it's worth thinking about how you could outsource the tasks that aren't you take things in-house to either save money or improve quality. Josh - Most resources and activities have been better performed by partners, who grow the bamboo and manufacture The essential resources are the brand, website, sales channels and the founder, The essential activities are advertising, fulfilling orders and meeting with stockists. Kylie and Dan - The most essential resources are Kylie and Dan, as their knowledge and credibility are what make the The essential activities are the promotion and sales of their events. They are currently looking for partners who can take the administration functions away from the founders, and who can Anna - Chilli farming and sauce manufacturing are performed by partners, The essential resources are the brand, the recipe/intellectual property, and the sales team. The essential activities are pitching to new supermarkets and cafes, maintaining existing relationships, and fulfilling theISAACJEFFRIES Brand Step 5: Cost Structure and Revenue Streams The bottom line of the canvas represents the bottom line of your business: Money in, money out, hopefully some money left over, We want to understand the ways in which money moves through the business. That means understanding the quantities (how our costs/prices are set) and frequencies (how often we get repeat cust Cost Structures (https.//isaacjeffries.com/blog/2017/4/7/bmc-part-nine-cost-structure) are the 7-8 biggest expenses - ho spend it, and whether it changes as sales go up and down. These might include rent, wages, raw materials, advertising, fitting out the store, or paying commissions to other parties Revenue Streams (https://isaacjeffries.com/blog/2017/5/1/bmc-part-ten-revenue-streams] are the prices each type of cu: frequently they come back. This helps us differentiate the big spenders from the one time shoppers, and highlights which offerings are purchased over the following months and years. Whilst these boxes aren't a replacement for a proper financial model, they at least give us the ability to make basic fore breakeven points. It also gives us a chance to think about our pricing strategy - clever pricing (https://isaacjeffries.com/blog/2016/1/5/how increase the profitability of your new business.Josh - The main costs within the business are the purchase of brushes (recurring costs that will decrease as the orders ISAACJEFFRIES ders (packaging. postage and staff time). Revenue comes through one main product; 4-packs of brushes. This will need to be diversified, either through complementary offerings like floss or mouthwash, selling larger orders to brushes. Kylie and Dan - Kylie and Dan themselves are the main costs, with administration, travel and cost of sales (ticketing, ma Revenues are varied; schools pay a per-student rate of $15 that will increase in the future. Weekend camps are capped at 18 places at $375 each, so the amount of revenue comes down to the number of camp Anna - There are a long list of costs, from the bottles to the sauce to the shipping and labelling, as well as the administ Revenues all stem from the same product - 450ml bottles of sauce, but in different quantities and prices points. Supermarkets pay $6 per bottle, whereas cafes pay $8 and consumers pay the RRP of $12.95. That said, one supermarket buy more sauce than ten cafes.ISAACJEFFRIES WWI USAES 3ISII LINE II IEPSOMMEIL LICRISIS, wat wouldn't help your idea. Instead the canvas keeps our ideas accountable; if we make a promise somewhere on the right, it will also need to be If we make claims about our happy customers, that should shine through in our Revenue Streams. If we expect to keep personal relationships with each customer, that will become a part of our Key Activities and Cost S This does two things: highlights the potentially overlooked activities and resources that are crucial for success, and ma directly contribute to the Value Proposition. Long story short, you stop making big sweeping assumptions and waste less money. We want the canvas to be as clear as possible, both for our benefit and for explaining the idea to other people. One way of making sense of the right hand side is to colour code each customer segment; this highlights which value p which revenue streams they each provide. Step 7: Telling The Story Presenting a full canvas to a new person is not a good idea - there's too much to take in. Instead, it's best to fill in each box as you explain the idea. This makes the business much easier to understand, and creates a much richer appreciation of the model at the end. Even if you just list a few words in each box, this will take about 6-8 minutes to explain the full concept, and will remove Step 8: Assumptions Testing Just because you wrote something clever on a canvas doesn't make it a reality. For this reason, we start by assuming that all of the words on the page are assumptions, and our next job is to verify the (https://isaacjeffries.com/blog/2017/5/15/bmc-part-thirteen-testing) - starting with the most crucial. I find this is made easier with a simple Test Card, which asks you to name the big assumptions, pick a way of measuring Research should be conducted with real people, and they need to be people who are in your customer segments. Just because your friends think it's a cool idea doesn't mean that the market will too. When you talk with your customers, don't show them the canvas - it's better to ask natural questions that help you fill ir terminology.ISAACJEFFRIES Step 9: Designing New Versions Good ideas survive competition, so it's important that we don't fall in love with the first idea. After your testing, you'll start thinking up new adjustments that are worth exploring. Here are some suggestions to spark your creativity: New Customer Segments New Value Propositions (for the same Customer Segments) New Products/Services (for the same or new Customer Segments) Turning Services into Products Turning Products into Services New Partnerships Franchise models (that aren't reliant on a rare resource) New delivery formats Josh wants to test some new products with his current customers, whilst also looking at business class airlines and high toothbrushes to their customers whilst appearing environmentally responsible. Kylie and Dan are going to test new styles of workshop that appeal to their school groups at different times of the year. They also want to bring on some trainees to learn how to run camps and workshops, so that the model is not as depen their finances and their cultural intent). Anna has heard that her supermarket customers want to see a wider range of products, so she's going to test feasibility desirability with her customers.What's Next? ISAACJEFFRIES nvases, some additional tools will make the future even clearer. Customer Journey Mapping (https:/isaacjeffries.com/blog/2016/5/17/the-5-es-of-customer-journey) will give you insight: your customers. Financial Models (https://isaacjeffries.com/blog/2018/3/12/what-is-a-financial-model) will reveal what makes the business sensitivities that will make or break the idea. Value Proposition Canvases (https//isaacjeffries.com/blog/2018/2/27/how-to-fill-in-a-value-proposition-canvas) will dive hidden motivations, creating more persuasive messages that will lure them in. Isaac Jeffries (/?author=568a65dccbced60d3b44e286) -h (HTTPSWWWW.FACEBOOK COMSHARER/SHARER PHPTU-HTTPSS JAN2FWOFISAACJEFFRIES.COM%2FBLOG$2F20 18%2PDS:2FBNOFHOW-TO-FILL-IN-A-BUSINESS-MO HTTPSWTWITTER.COM/INTENT/TWEETQUAL -HTTPSSJAN2FYZFISAACJEFFRIES.COM'S2FBLOG:2F20 18%2FDS 2FBNOFHOW-TO-FILL-IN-A-BUSINESS-MODEL-CANVAS HTTPS.W/WWW.LINKEDIN. COM/SHAREARTICLETMINI-TRUESSOURCE-ISAAC- JEFFRIES+ASUMMARY &URL -HTTPS\\\\34%2F%2FISAACJEFFRIES.COMNZFBLOG%2F 201 HTTPS./WWW.REDDIT.COM SUBMIT7URL-HTTPS'S 34%2FY OFISAACJEFFRIES. COM'S 2FBLOGS SINESS-MODEL-CANVAS) Top Articles /blog/2019/1/10/tel me-about-some ofwmiir-nmlertel //blog/2018/12/21/c compelling-value- monAcitinnel