Understanding Business Model Canvas and How to Use
In a business, whatever its form, there must be some people who operate so that business activities continue. To ensure business runs smoothly, appropriate strategies, management and systems are needed.
This strategy must be able to facilitate the people in it to work effectively and in accordance with the goals of the company. One business model that is proven effective and is often applied is the business model canvas (BMC).
WHAT IS BUSINESS MODEL CANVAS?
The business model canvas is a tool in management strategy to translate concepts, consumers, infrastructure and corporate finance in the form of visual elements.
The business model canvas concept relies on drawing ideas so that everyone has the same and real understanding of their types of consumers, expenses, company work and so on.
WHAT ARE THE BENEFITS OF THE COMPANY APPLYING CANVAS MODEL BUSINESS?
Many people may ask, is that any guarantee to be success by implementing business model canvas? Closely understand, the business model of canvas divides important things into clear focus. This makes it easy for business people in various aspects and can be applied by companies both large and small scale.
These advantages make many business people learn about this business model canvas and apply it. Although there is no guarantee of success with this business model, but this business model has proven to be more effective for many companies.
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APPLYING CANVAS MODEL BUSINESS IN THE COMPANY
In the business model canvas, there are 9 important elements which will be discussed one by one below. These 9 guidelines are important to direct you in determining the company's work system as well as checking whether the company's activities are running according to the system.
Here the Elements of the business model canvas
1. VALUE PROPOSITION
Simply put, a value proposition is the selling value of your product / service so that consumers choose your company over competitors. Before determining anything else, a value proposition is crucial to know that your business sells what consumers really need and ensures that your company sells solutions to their problems.
Here are some questions that can help you:
What causes the problem to occur?
Why do consumers want the problem to disappear?
What are the benefits of my business for consumers?
2. CUSTOMER SEGMENTS
Value propositions are closely related to your consumer segmentation. Target consumers can be divided into various segments according to needs, for example, based on age, gender, hobbies and the level of consumerism.
Then, how to find out specifically our target consumers?
Some of the questions below can be used to determine your target customers!
To whom does your solution have the most positive impact?
Is your solution suitable for individuals or other businesses?
What about the character of individuals or businesses?
Your solution is suitable for men or women? Or both?
How old are they?
3. CUSTOMER RELATIONSHIP
So, before we have determined Value Proposition and consumer segmentation. Next is understanding your customers and "approaching" them.
There are many ways to approach consumers, both personally, by phone, and so on.
In customer relationships, you can find out what are the most effective ways to interact with consumers and potential customers. Let's say you have an online business that sells hair accessories products with a target age of 18-25 years. Surely your target consumers are women who like to dress up or look neat. Then how to make them want to buy your hair accessories product? By providing information about hair care, hair binding tips, and so on.
The easiest way to reach millennial consumers is by interacting through channels that "are often visited by your target customers", communicating according to their language (millennial style for example) and providing content relevant to their interests.
Being closed with your customers according to their language and interests are very important. Now is the time you really meet and talk them. The following questions can help you identify which places are ideal for meeting them.
Where are your customers?
Are they actively using social media?
Do they like to listen to the radio or music applications?
Do they like to attend events or seminars?
Do they watch TV?
This can determine where you should put the advertisement. Whether on billboards, on Instagram, in newspapers and so on.
5. KEY ACTIVITIES
Key activities are your business activities that are carried out daily in order to achieve a value proposition. Some guide questions you need to answer:
What business activities can be implemented in a company to help you satisfy consumers?
What about the distribution of your product / service?
Do you have the expertise to carry out daily company activities?
6. KEY RESOURCES
To stay competitive in the business industry that you are in, you need the right resources because these are the assets you have to support the company's activities. Some simple examples of key resources are computers, workspaces, employees, vehicles, electricity, and so on.
7. KEY PARTNERS
In a business, it requires partners who support your company. If until now you have not found the uniqueness of your product / service due to lack of networking, you need a work partner who can help you achieve a value proposition.
If you open a bakery shop, you need a supplier of baking ingredients that are close so that the ingredients sent are always fresh. Well, that supplier is your key partner in doing business so that you can always maintain the quality of the bread you sell. Find them and maintain best relation.
8. COST STRUCTURES
A cost structure is a financial scheme that finances your company's operations. How much money must be spent to carry out company activities per day? What is the cost for the resources used? What is the price of marketing the product?
9. REVENUE STREAMS
Every company needs a revenue stream to continue to be able to carry out its daily activities. Revenue stream is a source of company revenue from various sources, such as sales, dividends and so on. This will keep your business run well.
Business model canvas is an effective technique to be applied in a company because it can help map your business in a structured way. You can use this business model to turn your ideas into concrete things. Interested to try it?