Business Model Canvas

Starting a business is often a life-changing event. For some, it is an entry into the real world while for others it is “the next logical step”, after having worked and gained a level of expertise in specific business functions or domains. Irrespective of your background, the experience of launching a business for an entrepreneur is nothing short of shaping one’s own destiny. Therefore, proper business planning and financial forecasting are essential activities to set yourself up for success. 

The Business Model Canvas — as opposed to the traditional, intricate business plan — helps organizations conduct structured, tangible, and strategic conversations around new businesses or existing ones. 

The Business Model Canvas comprises nine building blocks that show the logic of how a company intends to deliver value and make money. The nine blocks cover the three main areas of a business: desirability, viability, and feasibility. This model is similar to a blueprint for implementing organizational structures, processes, and systems. Let’s take a look into the three different sections:

To help you start your own Business Model Canvas, Miro has useful templates for brainstorming.

Business Canvas – Business Models & Value Propositions

Business Ideation Process

Ideation is a process of generating new, creative ideas which can be accomplished through various techniques. Ideation is a crucial step in your design thinking process ,where you as an entrepreneur can put yourself in your customers’ shoes, and understand their needs, desires and problems. Try to find an idea that will solve that problem, and then assess the following:

• Market Demand – It is very important for you to identify business reasons as to why consumers will do business with you and not your competitors. It’s also important for you to understand if there’s a real need for your product or service.
• Skills and Competencies – Do you have the skills to implement your idea and transform it into a successful business? If you believe gaps exist, look for co-founders who have complementary skills. 

Here are some techniques for you to ideate: 

• Brainstorming- Chances are that your team is already familiar with brainstorming. The goal is to bring a group of people together, and build on each other’s ideas. The job of the leader/moderator is to make sure everyone gets a chance to express their ideas.
• Prototyping- Prototyping is a process where teams implement ideas into tangible physical products.
• Method 6-3-5- In this technique, six people write down three ideas in five minutes. When the five minutes is up, team members pass their sheet onto the next person, so that their peers can build off their ideas.

Market Research and Validation

Market Research

Market research helps you understand your customers, your competitor and the industry in which your startup will operate in. Research involves primary research and secondary research. As a start, BDC has compiled an easy step-by-step guide and tips on how to conduct market research for your business.

Primary research is focused on your customers and business. It also helps you understand your USP (Unique Selling Point). A common method to identify your USP is through a SWOT analysis and competitor analysis.

SWOT Analysis

SWOT stands for strengths, weaknesses, opportunities, and threats. In doing effective strategic planning, your company should focus on:

• Building on strengths
• Converting weaknesses
• Maximize your response to opportunities
• Overcome potential and existing threats

Here are some examples for each section of a SWOT analysis:

If you need additional help or inspiration, you can use this SWOT Analysis guide written by fintech and blockchain entrepreneur Amilcar Chavarria.

Competitor Analysis

A successful competitor analysis will help you in identifying and defining your competitive strengths – attributes that make your business stand out from the competition. It could be customer service, a unique feature of your product, your target market, a different tactic on how you operate your business— anything at all. 

• The path to success here would be to identify opportunities that your competitors overlooked, which you can successfully implement!

• Unknown competitors: You cannot miss out on studying substitutes of your product/service in the competitor analysis process. Think from the customer’s perspective and analyze if the alternative to your offering is solving their problem better or more effectively. If so, you need to study how your product can not only compete with alternatives, but also substitute your competitors. 

BDC provides a resourceful guide on how to conduct a competitor analysis.

Secondary research involves making use of existing information. In this age where data feeds every decision, it will be easy to find existing data on the industry, customer base, and product line that your business is focusing on. 

You can also opt for primary research, there is no better way than directly speaking with your audience and getting feedback that can help your business improve and grow. A very important note to remember is that you need to be asking the right questions! There are a lot of different ways to collect data from direct research, some examples include:

Surveys:

• QuestionPro’s free option provides many features for you to begin your research!
• SurveyMonkey is a widely known software for conducting market research or customer experience surveys.
• TypeForm is great for designing user-friendly forms with free, accessible templates. 

Focus Groups:

• Focus groups are a form of qualitative research that involves an open dialogue between 4 to 12 participants and a trained moderator to guide the discussion.
• Remember to meet with a group of people who are not from your network to ensure unbiased feedback. 
• Read the ultimate guide to focus group research in 2021 for more information.

Interviews:

• In-depth, detailed interviews with existing or potential customers.
• This method helps getting informative feedback directly from customers.

Observations:

• Usually conducted without the knowledge of customers; you observe and notice consumer behaviors while purchasing your products
• User testing is another way of observational research, and there are various market research organizations in Canada offering such services eg. Fresh Squeezed Ideas, the Analyst Agency, LLC; East and West Inc; etc. 

Product Testing

Now that you’ve determined the demand for your product in the market, it’s time for you to gather your feedback with the tangible product or service in the market. You can either ask your internal team to assess your offering, or create a campaign to gather external feedback also known as beta testing. 

Consolidating feedback and data

After you’ve done through market research and product testing, you need to make sense of the feedback you’ve received. Try to find common trends  whether positive or negative. If most responses show that people are facing the problem you’re trying to solve, they could use your product/service without any major issues, and are ready to pay the price you’re asking for, then you’ve successfully mastered your Market Validation study!