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Business Frameworks (Part 1)

Business Frameworks – Business Model Canvas

A few months ago I attended a presentation by someone who claimed that his business offered the only solution for a business framework. I was polite enough to not jump up in the middle of his presentation and scream that he was not – but he is not – and the experience has left me with the realization that I work with two separate frameworks for developing businesses, and have built my own business within one of those frameworks. I’ve just not been sharing this information as well as I should have been. So, here is my attempt to share the business frameworks that I help others to build.

Business Model Canvas

Given my background and training, you may have thought I’d start with EMyth. I’ll get there in a minute.

I wanted to start with the Business Model Canvas because it deals with businesses that are just starting up. Do you have a new business idea, but have no idea how to put it together? The Business Model Canvas is a great option for figuring out who your customers may be, how your product or business will stand out in the market, if your revenues will exceed your costs by enough to make it worth it, and more.

The framework of the nine segments of the Canvas helps guide a business owner’s thinking to cover all of the questions that need to be asked in a startup. Too often new business owners get enamored with a shiny new idea and forget that a business takes more than just a product to succeed.

Value Proposition

The canvas is centered on the Value Proposition your company can offer to customers. What do you have to offer that no one else does? What makes your shiny new product unique and desirable? Why would someone want to do business with you rather than the established competitors in your market or industry? How will you create value for your customers?

Internal Focus

On the left side, the Canvas looks internally at your company to get you to identify the Key Activities, Key Resources, and Key Partners that you have access to that will make your business happen. These are your capabilities and unique strengths. What are you, as the business owner, good at? Who do you have access to who can make you even better? You not only can, but need to, identify those strengths here. This is where you will need to focus to make your Value Proposition stand out.

External Focus

On the right side, the Business Model Canvas looks outward to your customers. Who are these people (or businesses)? Where do your find them? How do they like to be informed about and buy products? What are your Channels, Customer Relationships, and Customer Segments? This is where you determine if there are enough people who want to buy your product or service in the way that you can uniquely distribute it.

Finances

Underpinning all of the segments so fare is a focus on the foundation of a business: finances. Far too many business owners don’t think about the finances of their business. They take their shiny idea and rush headlong into the fray. The focus on the Cost Structure and Revenue Streams that the Business Model Canvas requires a business owner to address grounds the entire venture closer to reality. It’s better to find out that the costs of a new venture are higher than the revenues it could generate within a few weeks that after a few years and several rounds of loans and investment. The focus of finances helps you to see this right up front.

Open Source

The Business Model Canvas has the advantage and disadvantage of being – essentially – open source. The book it is described in, Business Model Generation, was co-written by hundreds of collaborators. You can download the canvas free. You can also take free courses on the Business Model Canvas – the most well known is presented by Steve Blank on Udacity.com. Open Source has the great benefit of rapid customer feedback in a no cost or low cost model. However, if you’ve ever compared Open Source to commercial software, you may also realize that the profit motive can go a long way in fleshing out a more robust product or better customer service.

All of this said, the Business Model Canvas is a robust framework to build a startup company in a way that massively increase the odds of success for the business owner. I’ve found myself coaching business owners on it recently since it matches the stage of their business’ growth and helps us as we focus our thoughts on what is most important for them to work on right now.

Comparison

So, why not just stick with the Business Model Canvas as your business grows?  Steve Blank answers this on Udacity.com. In one of the introductory videos, he explains that a startup is not just a small version of a big business. Small businesses have a different purpose. They are searching: searching for customers; searching for their place; searching for how they can grow. Established businesses execute. They are trying to be better at what they have already found. These basic differences require a different framework to help you achieve the results you are seeking.

The Business Model Canvas is designed to help a business search. If you are still in this searching phase in your business, I would love to help you implement the Business Model Canvas to accelerate your growth. Or, if you’re not sure what stage your business is in, we could work together to find out. A free coaching session can help get to what you need the most help with and start building your framework.

In the next post we’ll look at more established businesses and how the EMyth framework helps them to execute better. You can read Part 2 here.

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  1. Business Frameworks (Part 2) | Beyond Imagination Coaching - March 2, 2015

    […] the last post, we looked at how the Business Model Canvas can help startup businesses create a solid foundation […]

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