We all need to know our businesses and stakeholders well. In this brief article, I would like to share an important and east tool that I have used significantly and it works very well.
The best and the easiest way to understand the complete overview of any business as well as our key stakeholders is to create a business model canvas for them.
The process is relatively straight forward. All we need to do is to setup 30 minutes call with respective business owner and/or stakeholder and run through the series of questions which they can easily answer.
Important is to ensure you note or record answers to all questions meticulously. Also pay attention to listening and body language as your stakeholders speak. This will help you engage and understand the real issues and which areas are well defined versus areas requiring attention.
The Business model canvas is 8 segments consisting of 3 to 5 questions for each segment. Ideally it is best to fill it up in the below order.
1. Customer Segments: Focuses on knowing all the involved key customer segments of the business. Questions to ask are,
- Who are our most important customers?
- For whom are we creating value?
- Is our customer base a Mass Market, Niche Market, Segmented, Diversified, Multi-sided Platform etc.
2. Channels: In channels we specify the business channels we use for business. Questions to ask are,
- Which Channels do we use to reach our Customer Segments?
- How are our Channels integrated?
- Which ones work best (profitable & cost-efficient)?
3. Customer Relationships: In the section we discuss and document about how we manage customer relationships.
- How do we manage customer relationships with our customer segments?
- How are they integrated with the rest of our business model?
4. Value Propositions: This is one of the important segments where we clarify the value proposition(s) of the business.
- What problems are we helping to solve?
- What unique value do we deliver to our customer segments?
- Which customer needs are we satisfying?
5. Key Activities: Key activities are key activities we do to meet our core business needs and deliver the unique value propositions
- What Key Activities do our Value Propositions require?
- Which Key Activities do partners perform?
6. Key Resources: In this segment fill up the list of key resources we need to run the business.
- What Key Resources do our Value Propositions require?
- Which Key Resources are we acquiring from partners?
7. Key Partners: Here we define and list down our key partners for the business.
- Who are our Key Partners?
- Who are our key suppliers?
8. Costs Structure: This is an important to highlight all our business costs and including our liabilities.
- What are the costs for our business?
9. Revenues Streams: In this section we note our revenue streams and how we generate revenue including our assets.
- What are our revenue streams?
- How we do generate the revenue?
Once we collected all the answers, we can document them on one slide for easy overview.
You can also use this for knowing about any businesses of your choice. This simple overview can help you understand the business clearly within an hour.
Once you have understood and documented the business model, you can easily understand what are the key areas and where are the potential pain points of the business.
In my next article I will share an alternative version of business model canvas that can be used for any new business startups.