In order to succeed a great business idea needs a great business model. So what do we mean when we say “business model” and what does a Business Model Canvas look like?
A business model is nine building blocks that fit together to provide the working foundation of how your business will create product, identify customer segments, deliver that product to various types of customers and generate revenue. Your business model also identifies the key resources, activities, partnerships and costs that are related to product creation and delivery. A business model as a story that explains how your enterprise will create, deliver and capture value. You can use this story to explain your plan to investors, lenders, potential partners or your father-in-law.
A Business Model Canvas is a system for creating a snapshot of how these nine business building blocks fit together that allows you to easily examine different business models and choose the right one for you and your business. It allows you to communicate your business plan in a more concise way than a typical business plan and is easily reworked when you discover that your first (or second or third) idea has a fatal flaw. Teams at Startup Weekend will use the Business Model Canvas to communicate their ideas to one another throughout the weekend and create the business model they will be presenting on Sunday afternoon.
The Business Model Canvas allows you to:
Even if customers love your value propositions (the solution you are providing for their problem), you could fail if your business model is not scalable or financially sustainable. If you don’t have reliable channels to reach your customers or if your infrastructure collapses when your business grows, a good idea can flop. Working through the many possibilities as part of constructing your Business Model Canvas allows you to consider all the segments required to build a successful and sustainable business.
A Business Model Canvas is blueprint for making money. But just like blueprints for building a home, no one model fits all. Business models are widely varied. Sometimes using an unusual business model to deliver a well-known product or service can disrupt the market enough to create a space for your business. Consider the business models of Allegiant Airlines or Keurig coffee machines. A little closer to home we can compare and contrast different business models for print media. Amazon provides a great example of one type of very disruptive business model, while your local main street bookstore provides a different one altogether.
To learn more about the wide variety of business models before Startup Weekend and how to use the Business Model Canvas to map your new business (or identify new opportunities for your existing business), join one of our FREE classes at Montana West Economic Development this September. We encourage anyone who is planning to participate in Startup Weekend Glacier to attend, but the class is open to anyone in the community. Join us for a light lunch Wednesday, September 30th 12:00-1:30 at 44 2nd Avenue West, Kalispell. RSVP to Kim@DoBusinessInMontana.com.