everything you need to know to create your own (GUIDE) – WAU
We have prepared for you a complete guide with everything you need to know to develop your own business model and leverage your success.
Many first-time entrepreneurs, or even some with more experience, have doubts about the first steps at the time of entrepreneurship, and end up focusing on what they find most urgent.
The priorities end up being established by the most practical activities and this, in the long run, can mean big problems for your company.
One of the first fundamental and indispensable steps when starting a business is the development of a business model. Why?
The Business Model is who will shape what your company will do! It is from there that all the main actions of your business will be observed and documented.
It will even help you understand the main aspects of your business and ensure that they are all aligned to perform all tasks in the best possible way.
Because it is a relatively new concept, many people are still confused about what it is or how to develop a Business Model. And, as we already understand that it is decisive for your company, you need to understand not only what it is, but the whole process around a successful Business Model!
After all, what is a business model
The business model is how your company generates and delivers value to your customers. Or, in a more practical way, it is the structuring of the elements and steps that make up the way your company does what it does.
In this document, the entrepreneur must quote and describe all the main actions of the company and their relations with each other. This will make it easier for them to understand exactly how the business is going to work and what are the strengths and weaknesses of what they are doing.
This macro view of your company will be essential to strategically evaluate how to deliver to your customer the best product or service in the most practical and profitable way for you, in the short, medium and long term!
Perhaps this explanation seems very abstract at first. But, with some examples, you will realize how simple and fundamental the structuring of a Business Model is.
Difference: Model and Business Plan
Many people relate to the Business Model and Plan. It is important to understand that these two processes are different!
a Business Plan is a fully detailed document which serves to understand the viability of your business, through market, economic and procedural analyzes. This is the document that, for example, must be delivered to an investor, when applicable.
The Business Model is the process prior to a Business Plan, which will help you to see all the steps that should be included in your Business Plan, but in a less detailed, more practical and visual way.
In other words: should I have a model and a business plan? Yes!
The difference is that Business Plan is structured “what” you do it in the most detailed way possible. Costs, revenue, processes, structure, etc.
They are long and structured, take time to develop and are also the result of a lot of work, after all, no detail of your business can be left out.
It’s the Business Model is the mapping of the “how” you do: how you generate revenue, how you generate value for the customer, how you work with your deliveries and how all these steps are related. They are quick and simple to understand.
In other words: from it, it will be much easier to think about all the essential elements for a complete Business Plan.
Business Model Generation
Business Model Generation is a book, written by entrepreneurs Alex Osterwalder and Yves Pigneur, that revolutionized the way companies around the world understand their business. So he is a must read for any entrepreneur.
In it, the concept of Business Model was consolidated and a simple and practical way to elaborate it emerged: Business Model Canvas.
O Canvas it’s a picture divided into 9 steps so that any entrepreneur can elaborate and clearly visualize their business model without any difficulty.
In addition to the topics, in each tab of the board the steps are detailed with key questions that must be answered in each part of the board, making it even simpler to fill it out!
The steps for preparing a business model using Canvas, which ideally should be completed in that order, are:
At that point, fill in the box listing who your ideal customers are. It is important to define a profile, or better yet, a persona, with all the main information about that person so that he is never forgotten either by you or your team.
All activities must be planned around this field, after all, it is who you want to reach and therefore it must be at the center of your planning.
This is a very important part of your Canvas: what is the solution that your company wants to deliver? What are the differentials of this delivery for customers?
This picture determines not only your activity, but how it differs from other companies that do the same as you. It is essential to have this clear to the entire team, as this will be the aspect that will determine a customer’s decision for your company and not for any competitor.
Your customer buys your product. How will this product get to him? Always think about the best channel for your customer profile and document to avoid possible mistakes by the team throughout the sales processes.
What channels and how does your company intend to maintain a relationship with customers? That should be the question answered in this table.
In it, define the communication channels both before that person effectively becomes a customer and also in maintaining that relationship. They can happen online, point of sale, etc.
Source of income
In this excerpt, list everything that represents entry to your business: customers, marketing strategies, etc. Detail how much and how your customer is willing to pay for what you offer, after all, this is the end for which your business exists: profit!
They are defined, obviously, after determining the key activities of the company. In this step, describe what is necessary for your company to execute this value proposition to customers.
For example: essential equipment, human capital and place of production, when applicable.
In this table, write down what are the main activities responsible for the value delivered to your customers by your company.
They should always be thought of as the solution to any problem to your ideal customer.
In this block should be listed the partnerships that contribute to the delivery of the company, such as outsourcing, suppliers (when the material supplied is a fundamental part of the delivery), alliances etc.
It is important to determine these companies, as they will directly contribute to the quality of the deliveries and services offered, and must be thought out strategically.
What are the costs necessary to carry out and maintain your activities? List all of them in the “Cost Structure” field.
They will even help you to determine the price to be charged for your product or service without prejudice to you in the short or long term.
At this point, you should pay attention to the most important costs, not the details, and also list what are the most expensive activities related to your deliveries.
As you can see, this chart makes it even easier to structure the mapping of your Business Model, without forgetting the most relevant parts.
All of them must be filled in, always thinking about the value delivered to customers, after all, this is the end of every Business Model.
And, if you still have doubts, watch a Canvas mounted and the filling will be clearer in your mind.
Below, as an example, we have one of the most famous Canvas to date: the Apple Ipod. Yes, the company structures, in addition to a Canvas of the activities, one for each new product, as in each of them a new value is thought to be delivered to customers.
This applies to them taking into account the size of the company and its sales. But, in general, a single Business Model applies to the vast majority of companies.
The interesting thing is to observe what were the criteria for filling the chart in this case to guide you when creating your own.
Notice how the boxes were filled out, what the most relevant information was and this will be your guide when it comes to structuring yours. And notice that the tables are hypothetically filled with sticky notes.
After all, during the development of your business, possibly these fields will change many times, and should be reviewed from time to time to ensure that the business is meeting its initial objective.
If you liked this innovative and practical way of developing your business model, on the official website of the book you can access the framework for free and in excellent resolution, so that you can really have your structured and accessible to all involved in your business.
The website is English and, consequently, the table is also. If this is not your strong point, you can use the one at the beginning of this post, or search for Canvas on Google. You will find countless models and all basically with the same format.
Business Models and Innovation
Business and innovation models are directly related! After all, it describes the way you deliver value to your customer, and this must be a different criterion!
If your company has a generic and common business model in relation to its competitors, you may not stand out for it. So he always present your differential in relation to the others and how it will reflect in your deliveries.
This innovation can be related to any of the steps described in Canvas: in the value proposition, in the channels, in the relationship with the customer or in the activity.
The key is to think outside the box and find a “why” that makes you stand out and makes your future customers see it as clearly as possible in you, as a “plus” when choosing who to hire or who to hire. who to buy.
You can even adapt a business model that already exists, that is, the “how to generate value” of other companies or types of business similar to yours, that have developed a functional model, but that makes sense for both your company and the client, even if this example model is not your industry.
Types of Business Model
There are some Business Models that have many similarities and, therefore, are separated into large groups. This is because the “way of being” of some businesses works very well for a category of companies. Here are some examples:
The franchise model (or franchising) is a system in which a company expands through marketing the use of the brand and consequently the Business Model to other entrepreneurs.
This strategy allows entrepreneurs to start already with a solid and recognized structure, and tested and standardized processes, reducing the chances of error in many cases. The best known in the country are the international Subway and McDonald’s.
However, in contrast, the freedom of operations and actions is restricted to the approval of the franchisor (brand owner), which often limits the franchisee’s possibilities.
In this way, the Franchise Business Model, in general, has many common characteristics, such as channels and revenue flow.
If you are on the other side and have the desire to open a company that will be franchised in the future, O Business model should be further structured and tested, to ensure that franchisors are successful and, consequently, your brand as well.
In general, the model will have many common features with which other franchises –, but its differential should not be overlooked.
The subscription business model has gained prominence in recent years, especially regarding online businesses.
It is possible to pay monthly to receive products in various categories, from drinks, to personal care products, cosmetics and books. For example the ClubeW of signature wines, Wine and Glambox of beauty products.
The idea guarantees a recurring revenue for the company, which helps in maintaining and guaranteeing activities in certain periods, giving certain tranquility to the entrepreneurs who choose this model.
However, on the other hand, the great difficulty of the model is usually associated with the cost structure, usually high, and the loyalty of the niche, which can interrupt the subscription at a certain moment when the news or interest in those products run out.
In this case, the differentials are usually in the delivery method and in the news and exclusives associated with the subscription.
SaaS or Software as a Service it is the business model that offers the customer access to a platform through a monthly charge.
They are closely associated with the subscription model, but in this case delivery is made online and all maintenance is the company’s responsibility. Good examples of this model are Spotify and Netflix.
The problem with this model is usually associated with the need for quality internet on the part of the buyer to ensure that the platform or software works efficiently. And, as in the case of subscriptions, the product must have a really relevant differential to guarantee customer loyalty.
Startups and the Business Model
Many people have doubts about the concept of Startups and it has a direct connection with the concept of Business Model.
One of the criteria for a Startup to be classified as such is precisely to have a Innovative, scalable and replicable business model. Let’s understand each of these characteristics
A Startup Business Model must be innovative because only in this way will it fit as scalable and replicable.
It is very difficult for an enterprise to do something that other companies already do and the way they already do has a significant exponential growth, after all, there is no differential that contributes to it being chosen over its competitors.
Scalable because the difference of a Startup is very fast growth with low subsistence costs. Therefore, when thinking about a business model and seeing if it fits into a Startup, the Cost Structure and Revenue Source tabs tend to be quite different from traditional companies.
Finally, it must be replicable, as we mentioned, proving that the methodology or the “way of being” of this Startup can be applied to other businesses and yet it will be synonymous with success.
In other words: if you have doubts between opening a traditional company or a Startup, the first points to be taken into account are when filling out the Canvas.
Where to start
To start a Business Model, whether for a new company or if yours already exists but has not yet documented that strategy, the first step is to keep your idea in mind.
Not just superficially, but with all the possible information about the viability of this idea, so that you can begin to understand how people react to it.
Right then, imagine who the ideal buyer is and do a market researchto see if people are really interested in what you want to offer and, mainly, if they are willing to pay for it.
Without real data about the market you will possibly have difficulties to develop a really applicable and functional Business Model, since it is from your customer segment that all other tabs will be filled.
With research in hand, and data from potential real consumers, assess whether this idea is really plausible and can generate profits. Pivot as many times as necessary, and adapt to better serve and generate value for your future customers.
Then, have Canvas ready, either online or in print. And complete each of the steps, in the order we described before, but never definitively! Possibly along the way you will change several things several times, so the sticky notes or online filling allow you to start over.
Tip: An optimized way to fill the Canvas is to use these adhesive notes from different colors for different deliveries. So you can classify your services (when there are more than 1) and view the processes.
Remember that the idea is to understand your Business Model as simply and clearly as possible.
The elaboration of a Business Model is one of the first steps of the entrepreneur to understand in a visual and simple way the general context of a company, as well as the relevant factors for its applicability.
And it has never been easier to structure and have access whenever necessary to a Business Model that through Canvas, which in addition to having all the main points for structuring a model, is still didactic so that you, the entrepreneur, do not forget any of the key points during the creation process.
If you already have a company and do not yet have a Business Model, it is always time to start.
Its elaboration will be facilitated, since you already have the customers you need to take the first step in filling out your Canvas, and it can still help you to observe the strengths and weaknesses of your enterprise, being a fundamental ally when it comes to carrying out improvements and restructuring.
But remember that the Business Model does not replace a Business Plan. They are, in fact, two important parts of an enterprise: one to give a macro view of the value delivered to customers and the other to document structurally and in detail everything that concerns your company.
And, whenever one of these documents is changed, the other must be revised to ensure that over time your team’s objectives remain aligned with your “purpose of being”, that the value is really being delivered to customers and that nothing was lost along the way.
Another excellent tool that can be your company’s next step is to make a SWOT analysis of your enterprise. Want to know more about it? Read our article and understand how to put this strategy into practice.
Download our presentation template for SWOT Analysis
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