The Business Model Canvas can be used to document and understand the existing business overview. For new entirely new businesses we can use the Lean Canvas Model.
Lean Canvas business model can be easily filled up if the business information is clearly available. It helps to bring structure and thought on important aspects of the business.
Lean Canvas helps in defining new venture and startups with ease. It consists of 9 major segments which can be defined in one single slide while details on each can be put up on separate slides or documents for reference, inputs and refinements.
Now let’s briefly define the segments for better understanding.
1. Problem: List down the problems of your customer segments. Specify which key problems will be solved.
2. Existing Alternatives: List down what are the existing alternatives and how customers cope with these problems or solve them using alternatives.
3. 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.
4. Early Adopters: List the sub segment of customers that will be early adopters of the solutions and services.
5. Unique Value Proposition: This is one of the important segments where we clarify the value proposition(s) of the business.
a. What problems are we helping to solve?
b. What unique value do we deliver to our customer segments?
c. Which customer needs are we satisfying?
6. High-Level Concept: List the high-level concept of your unique value proposition.
7. Solution: Outline the solution and service for each problem. Also check that the solution matches the unique proposition and high-level concept elements.
8. Key Metrics: In this section specify your top 3 to 5 Key Performance Indicators which will help you measure your business and its success. Use SMART method to defined clear, concise and measurable metrics.
9. Unfair Advantage: In this segment specify your unfair advantage. It is something that cannot be easily copied. E.g. your years of experience of specific industry.
10. 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)?
11. Costs Structure: This is an important to highlight all our business costs and including our liabilities.
- What are the costs for our business?
12. 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 you noted all the information, you can easily transfer it to the one slide overview.
Now go ahead and give it a try. You can also use this for clearing your understanding on any ideas, start-ups and ventures. This simple overview can help you understand and explain your start-up or venture clearly to others. It will also help you sharpen your business and make a call whether its worth trying as well as identify gaps that you will need to fill.
After you have understood the Lean Canvas model, you can easily understand what are the key areas and where are the potential gaps are for the business.
In my next article I will share an overview of value proposition model that can be used for any new business ideas with in existing business.