- Welcome to The Journey.
Today we're talking about
what is a business model canvas
and why you need one.
- If you fail to plan, you're actually planning to fail.
Anyone that has a business has heard this statement before.
Now, formal business plans
can be complicated and intimidating.
A business model canvas can be a visual alternative
to understand the different variables
you'll need for your business.
- And there are plenty of ways that you can display
your business model canvas, whether it's online
or on a large whiteboard.
That way, it's out there in front of you
with the outline and you can make adjustments as needed.
- Yeah, so we're actually going to take you through
that business model canvas
and do a live demo at the same time.
Let's go check it out.
- All righty.
- All right, so we're talking through
how to create a business model canvas
and we're actually going to show it to you live.
We're using Strategyzer, we'll have the link below.
But it gives you a free trial to basically create
your own business model canvas.
So we're going to show you how to do it
for a web design company, but you can really
use these points with any industry, any type of business.
All right, so we're in Strategyzer.
You can see it's very visual.
You can either do this like Alex was saying,
on a whiteboard and map this out, or online, or a Word doc,
whatever works best for you.
The point is to make it super visual.
Starting with key partnerships.
- So here's where you round up your key partners,
suppliers, basically the people that you'd be working with.
- Yeah, so as a web designer, I would probably put,
say, a graphic designer for key elements of my site.
And then maybe I have an SEO person
because I don't know SEO all that well.
I know the basics, but I hire out to get that professional,
so that's also another key partner I have here.
So start to think of all the people
that you're really working with on a day-to-day
or a week-by-week basis and add that
into this key partnership area.
- You can also create a wish list here of things
that you want to work with your suppliers on
to really gain that business advantage,
like costs or distribution.
- So next up on our business model canvas is key activities.
And this is essentially the services
that you're going to be providing with your business
in order for it to operate.
- Basically, it's what you need to do
to be a profitable business and make money.
- So since I'm a web designer, I obviously design
WordPress sites, I sell new maintenance packages,
and we'll keep it simple with that.
- Next step is your key resources.
So this is basically what you need physically
to actually fulfill those key activities.
- Yeah, so think about your business.
What are the things that you need day to day?
Whether you sell products, you might need something
to ship them in and a shipping service
to go along with that.
As a web designer I'm going to need WordPress as my platform
to run on, I need a computer to build on,
I need a space to work with.
These are all things that I'm going to need
to ensure that I have my key activities in order.
- Next up is your value propositions.
So this is basically the building block of your business.
What value are you providing to your customers?
And so here's some questions to think about
whenever you're trying to decide on your value proposition.
Here you wanna ask what value
are we delivering to our customers?
And also, which one of our customer's problems
are we actually trying to help solve?
- Yeah, this is basically the part
where you kind of brag about yourself.
What makes you unique?
Why do people go with you over a competitor?
And really just go all out here.
So as a web designer, I can really talk about
a number of things, but we really want to focus on
what I do for my audience.
I help create an online presence
so they can get new customers.
That's my value proposition.
I should probably go a little bit more in depth
but we're keeping it pretty basic here.
You should know your value proposition;
why people go with you versus the others.
Go ahead and add it right there.
So next up, we have customer relationship.
This is all about how you communicate with your audience,
with your customers on a daily basis.
And it can be a number of things, right?
- Right, so it's not just how are you
going to keep your current customers,
but how are you going to continue
growing and acquiring more customers.
So one example would be if you've done
social media campaigns.
You know, which ones of those campaigns actually worked
really well and connected with your customer base?
Things like that are great to think about with this.
- Yep, absolutely.
So let me go ahead and jot that down.
So social media campaigns.
If you have a call center, if you're a larger business
or maybe you have chat support direct on your site,
email support, whatever that looks like,
however you communicate and continue communicating
with your audience, go ahead and add that there
right in the customer relationship column.
- And that's a great segue 'cause now
we're going to go into customer segments.
So this is really where you outline
who your ideal customer is, who you're really trying
to reach and connect with.
So if you're a pizza shop in a college town,
obviously your demographic is really going to be
that college age, maybe people wanting to come in
and watch football games or things along those lines.
- Yeah, and this is where you really dive into
who you're serving because as we know,
you can't serve everyone.
You do not want everyone to be your customer.
So the more specific you get, the better it is
that your business will grow.
So as a web designer, my customer is typically
between the ages of 40 and 50 for my business.
They are looking to rebuild their site.
They had a site built many, many years ago
so that's gonna be my example, looking to rebuild.
So who are you trying to serve with your business?
Go ahead and add it down in the customer segment
and then we'll move on.
- Then diving a little bit deeper
into those customer relationships is channels.
So these are the specific channels
that are really connecting with your audience.
Which channels do they prefer to use?
Which ones have you used and seen success with?
- Yeah, and with these you want to really jot down
the costs associated with it too,
since not all channels are going to be free.
Like social media is a free channel to use,
but maybe that chat support software that you use
for your business costs $290 a year.
You want to really lay that out so you have that foundation
of the communication channels
you're going to have with your audience.
- And speaking of costs, let's move on to cost structure.
So this is where you want to lay out all the different costs
that are gonna be associated with your business.
So you definitely want to include
your fixed and variable costs here as well.
We actually just talked about that in a video
that you can check out right here of pricing strategies
to help you make a profit as a business.
- Yeah, and these cost structures will,
it's literally everything you pay for,
whether it's your rent if you have an office location,
your hosting, whatever bills that you have
in order to maintain and support your business.
Go ahead and lay it out all right here.
As a web designer, I'm working from home,
I'm freelancing, so I don't have an office.
So most of my bills are going to come from like say,
hosting, 'cause I gotta host my clients' websites.
Premium plugins to really elevate the sites themselves.
SEO optimization because I'm again,
I have that SEO professional that's my key partner.
I'm paying him.
Optimization, and anything else that you have here,
go ahead and add it in here and include the costs
associated with each one so you have a visual representation
of the bills that you have.
- And it's important to stay updated
with those variable costs as well
since they are likely to change.
- Yeah, it's like with the premium plugins,
I'm not always going to have
the same plugins on every site.
Some clients may need more, some clients may need less.
- And last but certainly not least is revenue streams.
So this is the framework of how
you're actually making that money.
- Cue the money gun.
No money gun?
Ah, We lost the budget.
But yeah, those revenue streams are all about
how you're going to be paid.
So if you're an online store, that's basically people
coming to your site and buying your products.
If you're a restaurant, it's people coming to sit down
and eating your food.
For me as a service-based business,
it's every client that I get on.
So you really want to map out how you see
how you're going to get paid,
and basically the services associated.
So if a basic site, I charge 3350 for a basic site.
Add that down.
For e-commerce, 6000, for whatever it is.
Continue adding those services in so then you can
kind of get a ratio of, "Cool, I make this much
"from this product but I have all these costs
"in my cost structure."
You can start to really map out like how many products
or services you need to buy to stay afloat.
- Well thanks so much, Nealey, for showing us
how to create a business model canvas.
That was awesome.
- Yeah, and that business model canvas
is a constant work in progress.
As you progress through your business,
you're going to constantly refer back to it
and possibly an update and change it as your business grows.
- Yeah, and why not create a business model canvas today.
All right, well, thanks for watching.
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