How to Complete a Business Model Canvas?
A wise man once said to fail to plan is to plan to fail. As you build and grow your business, this saying will save you countless mistakes and lost money over time. You might be wondering what new venture to take in your new business. You might want to add an app to your business model.
But does it make sense for your business? To best answer that question you will need the help of a valuable tool, the business model canvas.
Don’t worry if you don’t know what that is or how it can help you. We will show you everything you need to make the most from this tool to assess each new business venture to ensure it is the right decision for you and your business.
What Is the Business Model Canvas?
Before we jump into the business model canvas, let’s define some key terms to ensure that we’re all on the same page. You might be wondering what is a business model? At the simplest level, a business model is your company’s strategy for making money.
So, to ensure that you are turning a profit you must evaluate every decision and new venture based on whether or not it makes sense financially. One great tool you can use to evaluate new business ideas is the business model canvas (BMC).
The business model canvas is quick, easy to fill out, and then assess your idea. You and your business partners should be able to fill in the business model canvas in a short afternoon brainstorming session. You don’t have weeks or months to spend filing out a new business model to determine whether or not you should add an app to your business plan.
So move away from the traditional business plans you might have created when you first started your business. And block off a few hours one day this week to meet with the key partners in your business to decide whether or not it is advantageous to pursue creating an app for your business.
First, you start with one sheet of paper with the canvas showing you the nine boxes to fill in for your new idea. Let’s dive into what questions to ask and see how they can help assess your new idea.
The Right Questions Will Help You Fill in Your BMC
There are nine boxes in the BMC but it can be confusing knowing what to put in each section if you’ve never filled one out before. We will map out each section and give you the right questions so you don’t waste any time validating your app idea. To outline a business model canvas you will begin from left to right with the following sections:
1. Customer Segments
Who are you serving in your business? Who are you helping by creating this app? Hopefully, as you work on your business you already have detailed customer personas mapped out for your business.
If not, take the time to quickly jot down some bullet points identifying your ideal customer.
2. Value Proposition
What are you offering your customers with your new app? What does creating an app bring to the table in your business? How can this new app bring value to your customers’ lives?
If you can show that you can bring value this helps validate your new idea.
3. Distribution Channels
How will you connect with your customers? In marketing this might mean social media or your website, however, with an app, this will include which operating platform you will choose to disseminate your app.
4. Customer Relationships
How do you find, get, and keep customers in your business? You will need to have a multi-faceted and multi-step answer to this question. So, take the time to flesh out how you will get your app in front of your customers. And then map out how your app will entertain, delight, and help your customers so they want to keep using your app.
5. Revenue Streams
The last box on the right half of the canvas is at the bottom and will be where you will outline your revenue streams. This question is usually phrased in terms of the products you’re selling and what your customers are willing to pay for your product or service. However, with an app, you will determine your revenue streams differently.
The majority of businesses will offer their app for free on the app store and then earn their revenue on the back end. So, how will your business use a new app to increase your revenue?
Will you send push notifications to previous customers for sales or to schedule an appointment with you? Will you offer coupons or discounts to those who have your app downloaded? You need to answer these questions so you can then assess if creating an app makes good business sense.
6. Key Resources
What resources do I need to create an app? Are you already a computer programmer who can do it yourself? Or will you need to outsource this step to an expert? Knowing what you need now will help you answer the questions in the next section. So be sure to establish what resources you will need to feasibly create a successful app for your business.
7. Key Activities
What steps will you need to take to make this new business venture a success? What are the key activities you will need to complete to finish this project? This should also include the procedural and operational tasks to maintain your app over time. Additionally, think about what promotional activities you will need to complete to continue to promote your app to current and future customers.
8. Key Partners
You don’t have to do everything yourself. Just as you don’t have to finance everything yourself, consider who you will partner with to create your app and get it in the hands of your current and future customers.
We mentioned outsourcing the development of the app, but how will you create a buzz around downloading it once it’s created? Think about what relationships you need to start building now so that when it’s time to launch you have the key partners in place to help you launch your new app.
9. Cost Structure
Before you can jump into the app arena you will need to assess the costs you will incur when creating an app for your business. Not only will you need to determine how much it will cost you to build your app, but also research what your ongoing costs will be.
Maintenance and server costs can add up over time, so be sure to know what your ongoing costs will be so that you can ensure that creating an app will be fiscally feasible for your business in the long run.
How Can It Help You Validate Your App?
You filled in your business model canvas from right to left, but to assess it, you will look at it in reverse order. Start at the bottom and then analyze it left to right.
What is the cost analysis? Does it make sense fiscally? If not, you aren’t going to get too far off the starting block, so perhaps you should choose another lane to swim in. However, if creating an app for your business makes sense then it can be a great way to connect with your customers and build long-term relationships with them.
But, make sure you’re solving the right problem. Did someone tell you that you have to have an app and so you’re ready to jump in? Or have you taken the time to map out how an app will add value to both your business and your customers?
The beauty of the BMC is not only its simplicity but also the fact that it is customer-centric. You need to start with your customers. How will an app help them connect to your business? How will it add value to their lives? Without this, your new app will never see long-term success no matter how great it is.
Validate Your Ideas and Make Your Decision
Now you’ve learned what the business model canvas is and how it can help you vet your new business ideas. Take the time to answer these questions so you can make the best decision for your business today.
Creating an app for your business can be a great way to reach your current customers and find new customers. Using this canvas you can ensure you’re asking the right questions to determine if an app makes sense for your business.
So, if you’re ready to add a mobile app to your business model, then reach out to us today. We help business owners just like you to take your business to the next level and reach your customers. And adding an app to your tech stack could be just what your business needs to reach your customers these days.