What is a business environment and why does every startup need it?

Starting a business means putting together a puzzle that ultimately leads to the right picture. But even the most complex puzzles were not messed up from the beginning. A puzzle can only be solved if we have already seen the complete picture. The same is true for any business, startup or business. The drawing board is the same as looking at the completed image before re-arranging the puzzle. Without it, you do not work, you just spin around. Because you do not know what the purpose is and what the story is about. In this article, we will look together to design a business canvas or design board; Something that everyone with any business needs.

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Henry David Toro, poet, philosopher and historian

This world is a canvas for our imaginations.

What is a Business Canvas?

” Alexander Astrvaldr ” in “The People’s Business Model ” Ecology is defined as: ” Boom Business, a common language to describe, visualize, evaluate and change business models that are used. »

How to build a business canvas?

Making anything requires raw materials. From vegetable crumbs to the production of enriched uranium, they do not work without raw materials. The business canvas is no exception. Each canvas consists of 9 components, the accompaniment of which eventually leads to the big picture. In Creating a Business Model, Yves Pigniver introduces these nine components as follows:

Customer sections
Suggested values
channels
Customer relationship
Revenue streams
Key Resources
Key activities
Key contributions
Cost structure

Puzzle One: Customer Sections

Customer, this is the first puzzle word. Do you know your customer? Have you identified your target group? What group, organization and even community are introduced as your target market? This decision is a big part of your business canvas .

Customer sections are made up of several different types. Alexander Strawalder defines them as follows:

Mass market

When your business targets a very large group of consumers, you are in fact moving to the mass market. In this market, customers are looked at from a much greater distance. Hence, there are more commonalities. This view is something like watching the earth from the moon. Because in that case, other colors, races, ages and even the lines of the countries lose their importance. In the mass market, the same attitude prevails. When a product is produced for the mass market, it includes everything from a Tehranian to an individual from the Amazon. Among the products that are included in this market, we can mention beverages such as carbonated beverages and a large part of the food industry in general. Although the mass market means targeting a very large group of people, it still does not include all people. Remember, a product that is made for everyone does not benefit anyone.

Corner market

The market includes the corners of a very specific segment of customers. In this market, all products and services and all marketing plans are set up only to provide services to this group of customers. The continuity of your business depends on their existence. In fact, your business is seen as a complement to these customers. For example, manufacturers of specific raw materials for companies that sell certain products fall into this cycle. Without that company and the need for that particular group of raw materials, your business will be destroyed.

Peter Drucker

The goal of any business is to create a customer.

Segmented

Sometimes your business has the ability to respond to specific groups of customers. Let us illustrate this point with an example. Imagine that you have a workshop that produces a type of parts that meets the needs of three groups: pumping, steelmaking, and computer parts. In this case, you have to divide your workshop into three separate sections. Because despite the commonalities, there are still fundamental differences in the final product in many respects. Then define a separate business canvas for each, all of which, of course, fit in the customer section of your main business canvas or parent.

Diverse

When you have the ability to respond to two very different segments of customers because of the potential that exists in your work, you fall into this group. Imagine that you have an online carpet store and many online marketers provide services to your carpet buyers. If you set up a marketing and business consulting website next to your online store and make the most of your marketers’ powerful potential, then you are covering two very different groups of customers.

Multifaceted platforms (multimodal markets)

When your customers have a lot in common and complement each other, then your customer base covers multifaceted markets. Note that the customer segment of multidimensional platforms is quite different from the “corner market” segment. In the corner market, your business was seen as complementary to another business, but here your customers complement each other. For example, online advertising sites are one of these multifaceted markets. As the owner of this business, you should have a comprehensive database of information – including contact numbers and emails – visitors to your website and a comprehensive database of information of advertising companies. Without visitors, there will be no advertisers. Because of this, both customers are necessary to each other.

Puzzle Two: Suggested Values

Value proposition is the next piece of your business canvas . Everything in this world has its own value. You are also actually creating value when producing products or providing services. The customer does not buy the product but its value. He or she will compare your value proposition with the rest of your competitors when purchasing or receiving services. If you can get the most value out of it, you will win the customer decision field. There are many types of values. Factors such as product novelty, performance style, customization, price, product design, brand, etc., are included in this circle. Think for yourself. What value does your product offer to its customers with what quality? Which group of customers is your value attractive to?

Warren Buffett

Price is what you pay for. Value is what you get.

Puzzle 3: Channels

Channels are the way you communicate with your customers. The channel is your ambassador’s first encounter with customers (ie your product or service). If this connection is created with pleasant memories, the created channel will provide a lot of capability for the constant movement of the customer. Sometimes you have to combine several different channels to make a constructive connection. For example, the combination of direct communication channels – for example site – and indirect – for example wholesale – is one of these common combinations.

Yves Pigniver believes that each channel consists of five separate phases, or rather five separate questions. Each channel can include some or all of these phases. These phases include the following:

Awareness

How do we increase customer awareness of our products and services?

Assessment

How do we help customers evaluate the value proposition of the organization?

Buy

How do we make it possible for customers to buy our products and services?

Delivery

How do we deliver the value proposition to the customer?

After sales

How do we provide after-sales service for our customers?

Puzzle 4: Communication with the customer

The fourth part of your business canvas is customer relationship. Every business has its own reasons for connecting with its customers, but three motivations are common to all of them:

Customer attraction
Customer retention
Increase sales

The customer is a human being. This is a simple matter that sometimes even large companies forget. Your product or service will eventually reach a complex human being. As a result, even the voice of your representatives in the after-sales service sector plays a big role in keeping or fleeing your customers.

Alexander Strawalder believes that there are different types of customer relationships in a company’s relationship with a particular segment of customers. He gives examples in this regard:

Personal help

“Someone who only helps me personally” This is the concept of personal help in customer relations. When your company policy is customer retention and increasing average revenue per customer, you use this method to sell a product, service or support.

Dedicated personal assistance

If we do the personal help section with more flexibility and in a completely dedicated and sincere way, we will be included in this section.

Self service

The self-service model of restaurants is not limited to these places. When a company or organization has no direct relationship with the customer and instead anticipates all the necessary customer service and assembles them in one place, it is in fact creating self-service for its customers.

Automated service

A more complete form of self-service can be found in the Automated Services section. Automated services can best simulate personal communication.

societies

Communities, or associations, are gatherings to build a lasting relationship, not just between companies and customers, but between customers. One of the most powerful benefits of building a dedicated community is to directly see what customers think about your product or service and to find free solutions to product problems.

Joint creation

Creating together means turning the customer into a fan; That is, the displacement of places; That is, the customer should be by our side instead of facing us, and we should both look at the product or service together. You can see an example of this joint creation on the Digikala website. Customer Reviews section of this site has published a review workshop for each product by publishing a large part of the comments of buyers or customers of the products. Do you organize your customers? Can they talk to each other in a special environment and comment freely on your product or service?

Puzzle Five: Revenue Flows

Earning and recognizing the paths that flow to your business is one of the most important parts of your business environment. You need to ask yourself how the customer segments are willing to lose their money and for what value? Every business can have two types of revenue streams:

Transactional revenues

If a customer only uses your services once or buys your product, you have earned transaction revenue from that customer.

Repeatable income

If your customers buy your product or service multiple times, you will create a valuable recurring revenue stream in your business.

Jeff Bezos

If you build a great experience, customers will tell each other about it. Word of mouth is very powerful.

Yves Pignier defines seven different ways to generate revenue streams to a business:

Sale of assets

Sales of any physical product that your company produces fall into this category. For example, selling phones, laptops, books, etc.

The right to use

This revenue stream is directly related to the customer’s use of those services. This means that the more the customer uses your product or service, the more they have to pay. For example, the use of mobile services or the number of days spent in a hotel fall into this category.

Membership fee

In this method, the amount of access to the service or product is sold. For example, membership in educational sites or even membership in clubs are included in this type of revenue stream.

Lending, renting

This flow can greatly increase the usage times of a product. Car rental sites, driver rental sites, cell phone rental sites and even expensive branded clothing rental sites can be included in this category.

Granting royalties

Granting a franchise to a customer means that you are selling your intellectual property rights to someone. Despite buying the property right, the customer has to do a lot of things under your supervision. For example, companies that build restaurant chains around the country and even around the world are expanding their business by selling their franchises.

Brokerage wages

Intermediary is a fitting name for this revenue stream. For example, real estate consultants who act as an intermediary between us and the landlord will lift their commission if they enter into a contract and, in fact, receive a brokerage fee.

Do advertising

Advertising in any business can generate a good revenue stream. From selling advertising space on websites to creating video ads for the customer.

Puzzle Six: Key Resources

Completing a business canvas puzzle is impossible without this piece. Key resources allow any business to operate. These resources actually provide the same capital needed for production and movement.

Puzzle 7: Key Activities

Your business canvas is set in the seventh puzzle. In this puzzle you have to determine what kind of activity you need to do in each of the previous puzzles. Key activities also vary depending on the business model. Alexander Sterwalder categorizes key activities as follows:

manufacturing

If you have a manufacturing company, your activity is in the field of designing, manufacturing and presenting a large number of products with excellent quality.

Problem Solving

Key activities of this type are summarized in providing a practical solution to the customer. The simplest example of this is consulting firms.

Platform / Network

If your business operates on a single platform, then your main activity is to develop and improve service delivery within the network. Large online stores such as Amazon, eBay, Digikala and companies such as Microsoft are examples of this category.

Puzzle 8: Key Contributions

The eighth part of your business canvas is partnership. Companies enter into the partnership debate for a variety of reasons. For example, sometimes to expand and sometimes to raise capital, partners open their feet to their own business. In total, four different types of business partnerships are common:

Strategic agreements between companies that are not competitors.
Strategic partnerships between competing companies.
Joint ventures to create new businesses
Buyer-supplier relationships

Ken Blanchard

None of us alone can be as strong as when we are together.

Ninth Puzzle: Cost Structure

The last piece of your business canvas is the cost structure. It is impossible to step into any business without paying the costs of creating and surviving it. In the meantime, there may be businesses with the least cost, but there is nothing that can be done without cost. To calculate your cost structure, you need to correctly define the three puzzle pieces of key resources, key activities, and key contributions.

Your business canvas is ready!

The nine puzzle pieces we’ve covered above will help you get the complex part of getting started very simple and detailed. By consciously designing and completing this canvas, you will be halfway to success. Alexander Sterwalder and Yves Pigniur put the puzzles together and placed them in the table below. Draw this board on a large sheet of paper and place your puzzles in different sections. In this way, you will build your business plan in a few simple steps .

A summary of what we said together:

The business canvas is the design and construction of a larger, more informed image of your business. Take it seriously.
Each business model canvas consists of 9 separate sections. These include customer segments, value propositions, channels, customer relations, revenue streams, key resources, key activities, key partnerships, and cost structure.
By correctly defining each of these 9 sections, you can design your own business canvas .

A role on my tablet…

The design of the business canvas is something like the adage, “First war to last peace.” In fact, if we do not concentrate, we will end up not with war but with defeat. This canvas shows us what we really want, what we have and what we need to do. Its design may be time consuming but it is very instructive and simple. According to Richard Bach, the simplest things are usually the most real. So try real and right.

What is a Business Canvas?