My Business Model

Introduction
 

National Bank's My Business Model tool can help you turn your business ideas into reality, whether you're looking to start up a business, take over an existing business, or reevaluate aspects of your current business. 
 

You want to create value for your clients, to deliver your product or service to them and generate value for your business. Our business model canvas maps out in a simple and comprehensive way how any business operates. It will help you ask the right questions to determine whether your product or service is innovative enough to make you stand out from your competitors. It will also help you pinpoint the reasons your clients choose your product or service over others. Not only will it help you effectively articulate your plan, this canvas is an amazing tool that will transform your business by making it easier to think strategically, exchange ideas, make decisions, and work as a team. 
 

Each of the following clips presents one of nine building blocks:
 

• The value proposition
• Customers segments
• Channels
• Customer relationships
• Key resources
• Key activities
• Key partners
• Revenue streams
• And cost structure
   

Remember, each block is interconnected with the other blocks and influences the business model structure. For example, if you have an online business, your clientele may be different than if you have a brick-and-mortar business. You would therefore need to mobilise different resources.
 

Try it out for yourself. For each building block, focus on doing something innovative to stand out from your competitors' conventional business models. That will make your product or service unique and difficult to copy and make entry into your target market harder for others. 
 

It's easy, all you need is some post-its, pencils, and creativity. You can draw pictures, use colors or arrows to highlight the relationships between the blocks. You can work on a wall, or on a table. Whatever you like as long as you keep it short and to the point. 
 

Now you're ready to start working. 
 

Welcome to the world of creative can-do entrepreneurs. 
 

Value Proposition
 

The value proposition refers to the bundles of products and services that create value for a target client segment or segments. You have an idea. You've identified a need and you can turn it into a business opportunity. Now you need to find out whether the solution you propose is the best, and whether your product or service will be profitable, feasible, and what people want.
 

The value proposition defines the advantages offered by your product or service. It's what will make it unique and stand out from your competitor's offering. In other words, it defines the added value of your product or service for a target client segment. Determine what needs or problems your product or service addresses.
 

• What value does it create? 
• What are you actually giving your clients? 
• What are the features of your product or service? 
• What are the advantages of your offering? 
• Is your product new, more powerful, accessible, convenient, or attractive? 
   

Now it's time to focus on what your business has to offer and what makes it stand out in the market. Ask yourself whether the customers you are targeting are really interested in your value proposition. For example, imagine that you own a well-established shop. What would happen if you were to decide to change the merchandise you carry? Would your regular customers be happy? What new customers could you attract? See how closely your offering is tied to your customers. Test and validate your choices regularly to make sure there is a good fit between these two building blocks.
 

You've now defined your value proposition. 
 

Next, think about how you'll reach out to your clients and deliver your products or services to them. 
 

Customer Segments
 

Customer segments represent the different groups of individuals or organizations targeted by your business on the market. Customers have varied needs. It's easier to understand what they're looking for if you categorize them into different segments. Here's a tip: use a different color for each client segment you identify.
 

Ask yourself questions to understand who you want to create value for.
 

• Who are your target and biggest customers? 
• What are their needs and problems? 
• Are you marketing your product or service to the general public? 
• Will it only meet the needs of a small group? 
   

You could develop specialized expertise geared to a small group of clients looking for something very specific. Niche markets can be very profitable. 
 

Determine your clients profile by doing research on their lifestyle and their purchasing behavior. Then you'll be able to visualize a typical client for each segment. Put yourself in the client's shoes and try to think like him. The profile of your clientele will start to take shape. 
 

A word of advice: because your customers needs are constantly changing, be sure to re-evaluate them regularly. 
 

You're ready for the next building block. 
 

Channels
 

Once you've established the type of relationship you want to develop with your clients, you'll have to decide on the most efficient way to reach them. First, ask yourself the right questions:
 

• What communication and distribution channels will reach your clients? 
• Are you planning to sell your products or services through direct or indirect channels?
   

There are many different types of communication and distribution channels. Think of all the touch points through which you interact and deliver to your clients: your website, your online store, your salesforce. Even if your product or service is similar to that offered by a competitor, you could be innovative in terms of channels and distribute your product or service differently, for example by using drones to deliver your orders. Alternatively, you could give your clients the opportunity to take out a monthly subscription on your service. It could be renewed automatically and combined with a rewards plan. The sky's the limit.
 

You should also ask yourself what would be the best way to build a virtual salesforce. Will you use online shopping, emailing, or social media strategies? Your initiatives need to be geared to your target clientele. If your business model targets consumers and is based on retail sales, will you operate your own store or a warehouse? If your company is based on a B2B model, will you be signing partnership agreements with wholesalers?
 

The channels must be suited to your value proposition and target customer segments. Keep in mind that they can change over time, and that you'll have to reevaluate them regularly.
 

You're ready to move on to another building block of the business model canvas.
 

Customer Relationships
 

After you identify your target clientele, you'll need to determine the type of relationship to maintain and the type of customer service to provide. Will you be there for them on site or online? You could start by being close to your clients and benefiting from word of mouth endorsements. What tools and strategies will you use to attract them, earn their loyalty, and build a unique relationship with them? Do you plan to offer personalized service? Will it be dedicated or automated? Decide what option will work best for the type of relationship your clients are expecting. Will your clients be involved in the process of co-creating your value proposition? With this type of approach, users can, for example, post videos and even share content or reviews with others.
 

Remember that the most important thing is keeping communications open with your clients. Do that and you'll be sure to offer impeccable service. The true challenge lies in making each satisfied client an ambassador of your brand. Once you've added your client relationships to the model, be sure to re-evaluate your communication and distribution channels, and check that they're still relevant.
 

Make the most of the canvas. Post it on the wall during your next brainstorming session. 
 

You're now ready to move on to another building block. 
 

Key Resources
 

Identifying your key resources is essential for carrying out your key activities. They represent all the assets you have that help you run your business smoothly. Ask yourself: aside from financing and partners, what do you need to deliver your value proposition?
 

Your resources can be physical, intellectual, human, or financial. They can include your skilled personnel, tools, assets, copyrights and patents, know-how, experience, even your reputation. Your corporate culture is another key resource for the success of your business. It can drive innovation in production processes, or it can encourage personnel to focus on clients and keep their interests top of mind. Here's another example of making innovative use of key resources: a communication business that plans to use softwares and the internet instead of relying on conventional telecommunication networks. Just imagine how much it can save on infrastructure costs.
 

Remember that an innovative business model also depends on using your resources wisely. Your key activities and key resources are closely tied and should be developed together. Once you've managed to identify the different resources that are crucial to developing your business model. You've completed a major step. 
 

You're now ready to move on to another building block.
 

Key Activities 
 

Your key activities help you deliver your value proposition and bring your product or service to market. It's what makes you stand out from your competitors or get closer to your target clientele. Ask yourself what you need to do to make good on your value proposition. The activities of a company that manufactures products will be different from those of a company that offers services. But both will have the same objective: to operate efficiently and be innovative. For a manufacturer, this could mean developing an efficient production method that reduces design errors. In the case of a firm of professionals, it could mean designing and patenting a problem resolution method that sets them apart from their peers. A business can also stand out by breaking new ground and innovating.
 

Showcase your talents and make the most of your resources and time. There are many different ways of running your business in today's world. It's up to you to find what works best for your project.
 

Use rolls of craft paper to create large templates and have each member of the team contribute.
 

Once you've identified the key activities required for your value proposition, you'll have to keep in mind that these activities will also have an impact on your value proposition and cost structure.
 

It's time to discover a new building block and continue exploring your business model canvas.
 

Now choose your next video.
 

Key Partners
 

Starting up a business and making sure it's profitable means building effective and lasting alliances with suppliers, subcontractors, distributors, and any other partners you rely on to deliver your value proposition. You need to determine the type of partnership you want to build: a strategic alliance, cooperative competition, an exclusive relationship with single supplier, or a joint venture. 
 

Ask yourself which partners and suppliers are vital for your business. Partnerships can benefit you in many ways: they can lead to higher profits, economies of scale, and lower risks. They can also help you acquire new resources needed to grow your business. You could also outsource production of a very specialized product or service to a third party to reduce your labor and operating costs. 
 

The canvas is an excellent tool for explaining your business model and capturing the attention of potential partners and investors. Tell an inspiring story and negotiate the conditions you need to succeed in your sector of activity.

Keep developing, building on, and adapting your business model using the canvas available online. 
 

Watch the video clips again for answers to any questions that may arise. 
 

Revenue Streams
 

Your revenues are a very important aspect for your investors and for the profitability of your business. You have to start thinking in terms of revenue streams and pricing strategy. Do your revenues come from professional fees, packages subscriptions, lending, renting or leasing fees, licensing fees, product sales, usage fees, brokerage fees, or other sources. When setting your pricing, keep in mind the value that your clients assigned to the product or service you're selling and the amount they're prepared to pay for it. The value you determine will have an impact on your projection and will be used in your financial charts, your business plan, and your market study and analysis. A fair estimate allows you to adapt your business model to your external environment by adjusting certain aspects, such as your client segments, your value proposition, your pricing, and your key activities. By reflecting on your revenue streams, build up your value proposition and multiply the ways you generate revenues. For example, you could round out your value proposition with additional products or services. Your clients will see this as added value. Draw up a list of all potential revenue sources on the business model canvas. Put one idea per post-it to keep it simple. This will help you adjust your business model to your external environment and the other building blocks of the canvas based on the most promising revenue sources. We've already seen that there are many different revenue streams. Taking the time to properly identify them will definitely pay off. 
 

Ready for another block? Click on any of the videos. 
 

Cost Structure
 

Let's now look at the costs related to your business project. You should begin by itemizing all the costs related to your business. Highlight the biggest ones, like the costs related to your resources, your staff, and their training. Also include expenses related to research and development, your relationship with your partners, distribution, operations, dividends, income taxes, sales, and so on. 
 

It pays off to innovate in terms of your cost structure so that you are no longer dependent on resources and activities that eat into your profits. For example, you could design your product using recycled materials, reduce the number of intermediaries, or even hire subcontractors. Your understanding of costs and ability to adjust them will help you earn the trust of your investors. 
 

All the elements of the business model canvas are interconnected. By strategically re-evaluating your key activities, key resources, and partnerships, you'll be able to control the cost structure. 
 

Feel free to watch some of the clips over again if you need to refresh your memory.