BUSINESS MODEL DEVELOPMENT

Facilitated by Sherri Flavel, Business Development Officer

Agenda

 Introductions
 Business Model Canvas
 9 Components
 Workshop Format
 Start-up Financials
 Balance Sheet
 Break-Even Analysis
 About Community Futures - FFG

 Small Business Resource Centre

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 Special programs
 Community Projects

To learn more join an Information Session!

About You

 Name?
 Stage of business?
 Thinking about it? Starting?
Already in Business?
 Type of business?
 Retail? Restaurant? Consulting?
Online? Trade? Home base?
 Learning Objectives
BUSINESS MODEL
CANVAS
Business Model Example 1

Chester Carlson & the Photocopy Machine

Business Model Example 2

Larry Page and Sergey Brin

Lessons Learned
 What do these stories have in common?

They focus on product innovation alone

They empower the product through the business model
They simply copied from competitors
They invented a new business model
They were certain the model would work
They had to take some risk and experiment
The Business of Coffee

Over the past 30 years are we paying more or less for coffee
consumed in our home?

 20% Less?

 20% More?
Nespresso’s Story
Nespresso’s First Business Model
Lessons Learned
Nespresso’s Business Model
Canvas
Nespresso’s Business Model

Think about how you would describe Nespresso’s

business model.

What has made Nespresso become so successful?

Use Symbols
Business Model Canvas
Customer Segments and
Value Propositions
Let’s Get Started!

 Customer Segments
 An organization serves one or several Customer
Segments

 Value Proposition
 It seeks to solve customer problems and satisfy
customer needs with value propositions
Questions to Consider

Customer Segments Value Propositions

Who are your Why should your

customers? customers buy from
you?

Hint: Hint:
Not everyone! Not because you are the
best/you have the best
product!
Lets look at McDonalds

McDonalds
Hint: Think of
pockets of
customers that Who?
share similar
characteristics
McDonalds Customer Segments

McDonalds

We just Customer Segments

defined:
Who?

Families with young

children
Travellers

Work Commuters

Seniors

Teenagers
 Customer Segments

• For whom are you creating value?

• Who are your most important customers?
• Mass Market
• Niche Market
• Segmented
• Diversified
• Multi-sided Platform
Customer Segmentation
You can group customers by:
• Location - towns, regions and
countries
• Profiles - such as age, gender,
income, occupation, education,
social class
• Attitudes and lifestyles
• Buying behaviour - including
product usage, brand loyalty and
the benefits they seek from the
product or service
B2B Customer Segments
If you have customer Segment that
are other business (Business to
Business orB2B) get to know….
• What they do - industry sector,
public or private, size and location
• How they operate - technology, use
of your products
• Their buying patterns - how they
place orders, their size and
frequency
• How they behave - loyalty and
attitude to risk
Target Market/Customer Segments

Questions to ask yourself:

• Who pays the most?
• Who refers the most?
• Who do you enjoy
working with the most,
and why?

• Which Customer
Segments is McDonalds
Target Market?
Target Market
McDonalds
Customer Segments Value Propositions

Who? Why?

*Families with young children*

Travellers

Work Commuters

Seniors

Teenagers
It’s No Accident!

It is no accident we can identify McDonald's Customer

Segments and Value Propositions: they have worked hard to
make sure we all know!

McDonalds devotes most of

their marketing dollars to
their Target Market
Customer Segments

CITY
C ENTR
E DAYC
SKATEBOARD SHOP Work ARE
ing pa
childr re
en in nts of pre-
the C
Prince George and 200 km ity bo school
radius youth who skateboard wl are
a

MARK ET
ME R’S
FAR
ho a r e health
ults w
Local ad d s ho p organic
s an
consciou
Word Clouds
Lets look further at McDonalds
McDonalds

Customer Segments
Hint: Think
Who? Why? in terms of
customer
Families with young “needs”
children
Travellers

Work Commuters

Seniors

Teenagers
McDonalds Value Proposition
McDonalds
Customer Segments Value Propositions We just
identified:
Who? Why?

Families with young children Playroom/ kids meals/ kids toys/

cheap/
Travellers Fast/ convenient locations/ consistent/
long hours
Work Commuters Fast/ Cheap

Seniors Comfortable environment for

socializing/ seniors deals
Teenagers Cheap/ Comfortable environment for
socializing/
 Value Proposition

• Typical pitfall: Some value is expected from you and all your
competitors. You need to deliver it, but it doesn’t make you a
better option that your competitors.

• Unique Selling Proposition is often considered synonymous

with Value Proposition. But it only focuses on what makes
your product better than competing options. And that’s just a
part of a strong value proposition.

• It is NOT about the product!

Value Proposition

• Characteristics
• Newness • Brand/Status
• “Green” • Price
• Customization • Cost Reduction
• Design • Risk Reduction
• Social Cause • Accessibility
• Delivery Service • Convenience/Usability
• Atmosphere • Time Saving
Value Propositions

RURAL DAYCARE
SERVICE
S h o p
Tire s e s w ith Open longer hours to allo
b u s i nes w for
pr o v i de s er vi ce a longer drive
Will re r e p a ir t ire
il e t i s o f
mob m r a d iu Provide a snack/lunch
in 2 0 0k program to save parents tim
with store e
Channels
Channels

• Physical Location
• Information Sessions
Face To Face
• Events organized by you
• Events organized by others

Customer Hang Out • Tied with customer segments’

Places interests, including digital
spaces! (Blogs, FB Groups)
Complimentary • flower shop & wedding
Businesses photographer
Social Media, Website & SEO • Facebook, Twitter, Blog, etc…
Traditional Media • TV, Radio, Newspaper, etc…
CHANNELS

Store Front

Home Show Exhibit

Mobile Sales
Customer Relationships
Customer Relationships
 Keeping Customers
 Thanking your Customers!
 Adding Value to Purchases
 Engaging Customers
 Getting Customers to Come Back
Promotions ~ Sell more to more!
 Loyalty Programs

 Getting Customers to Help Boost Your Sales

 Referral Incentives

Effective tools: Client Relations Management Software/ Point of Sales System

Customer Relationships

Rec
eiv Pun
Referral Program e 10 ch C
s e rv a r d s
ices
Will ask new customer fre e a n d g
et on e
if someone referred F re e
Gift
gift
them. Will send the incl s
$20 uded
referral customer a $10 0 pu w
rcha ith eve
gift card se ry
Revenue Streams
Revenue Streams

 Revenue streams result from value propositions

successfully offered to customers

 It’s how you create value for your business.

Revenue Streams

Annu
al Su bscrip
Point of Sale Purchase tions
Visa
Cash PayPa
l
Interact
Visa
Key Resources
Key Resources
 The assets required to offer and deliver the
previously described segments

 Don’t forget things like:

 POS System
 Bookkeeping software
 Website
Key Resources

Manager Bu s in
e ss B
ra n d
Front Line
Workers
Delivery Truck

Shop with Hoist

Key Activities
Key Activities

Production Displ
ay Produ
c ts
Suppl
ier Mtgs
Hire Workers
Manage Workers
Key Partnerships
Key Partners
 WHO CAN HELP YOU SCALE QUICKLY?
 Professional Advisors/Services
 Bookkeeper
 Accountant
 Lawyer
 Website Designer
 Suppliers
 Strategic Alliances
Key Partnerships

Hometown Supply Const

ructio
Store Assoc n
iation

Ace Delivery Service

Cost Structure
Cost Structure

Equip
m ent Pu
rchas
Payroll Truck es
Mobi
le
Wages and Pay Cube Trailer Un
Van it
Deductions and Remittances
Federal Tax
Provincial Tax
CPP Insurance

Liability
Vehicle I
Conclusion
 You now have your own Business Model Canvas for
your business idea

 Use your Business Model Canvas to understand and

help others understand your business

 Working document continue your research

 Background for a formal Business Plan

Did the Business Model Canvas…
 Help unearth critical components of your business

 Help form initial research questions

 Help in succinctly explaining the nature of your business

Part 2 – Financials

 Understanding and preparing your Start-Up

Balance Sheet

 Understanding and preparing your Break-Even

Analysis
Conclusion
 Thank you for participating!
 Next Steps?
 Join us for our popular Business Planning Workshops
 Market Research – Validating Assumptions
 Customer Segments & Value Propositions
 Marketing and Sales – Right on Target
 Customer Relationships & Channels
 Operations – Pathway to Success
 Key Activities, Key Resources & Key Partners
 Financial Management – In the Black
 Cost Structure and Revenue Streams
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