There are as many ways to build a business as there are creative entrepreneurs. Your business model is your unique way of assembling your resources to create value, deliver it to the marketplace, and capitalize on it by making, retaining, and reinvesting money. The process of building a business is a continual adjustment of how you input, manage, and profit from your available resources.
The Building Blocks
A valuable and popular new tool for developing business models is the Business Model Canvas, developed by a group called the Business Model Innovation Hub and described in the book Business Model Generation. The canvas breaks the planning process down into a visual map that you can see on one big page. Nine Building Blocks make up the map:
- Customer Segments – What customer segments do you serve?
- Value Propositions – What customer problems and needs will you satisfy?
- Channels – How will you get your value propositions to your customers (think communication, distribution, and sales)?
- Customer Relationships – How will you create and maintain relationships in each customer segment?
- Revenue Streams – Where will your revenue streams come from?
- Key Resources – What assets are required to do all of this?
- Key Activities – What are the most important things the company must do to make all of these elements work?
- Key Partnerships – What activities will be outsourced? What activities will be done within the enterprise?
- Cost Structure – All of these elements create your cost structure.
Your Starting Point
It’s helpful to understand your own starting point when considering how you’ll identify and assemble these 9 building blocks. Are you fulfilling an unanswered market need? Bringing a new technology to market? Improving or disrupting an existing market? Or are you creating a brand new market that never existed before?
Once you think you have your model defined, you’ll want to test it out. Can you embark on a step-wise launch to verify your hypotheses as you go? Can you stay open to continual refinement and adjustment as you learn from the marketplace? If so, you are developing the entrepreneur’s flair for experimentation and continual learning and adjustment.
CAMPUS BUSINESS MODEL ASSISTANCE
- Rensselaer Business Model Competition
- Lally School Entrepreneurs In Residence (EIR)
- Severino Center Entrepreneurship Programs