If you are a migrant or refugee in Italy and you wish to open a business, the very first step is to take your idea out of your mind and put it on paper. One of the essential tools to start doing it is the Business Model Canvas.
You can use this article to learn how to develop your business project by using the Business Model Canvas (BMC).
What is the Business Model Canvas?
The Business Model Canvas is a one-sheet tool made up of 9 blocks useful for asking yourself the right questions, understanding what is the business model that governs your idea, what you need to do to create it, what costs you will have to incur, what revenue streams you will be able to get and how.
The 9 blocks that guide you through this path are:
- Customer segments
- Customer relationships
- Channels
- Value proposition
- Key activities
- Key resources
- Key partners
- Costs
- Revenue streams
Customer segments, customer relationships and channels
Always remember that without customers your business does not exist. Your business is created to satisfy the customers’ needs or desires, so you will always be the one who understands and adapts the business to the demands, and never the opposite. Even if your product or service is something innovative and disruptive which does not exist on the market, it has to satisfy a need that clearly exists.
The first step to build a business project is to get to know your target customers. The following questions may help you define who your target clients are: where they live, how old they are, what they read, how they get information, what their interests are, what their values are, where they go shopping, how they choose what to buy, what economic capacity they have, how much they are willing to spend to buy your product or service, and above all why they should decide to buy it.
Once you know your customers, you should understand what kind of strategies to use to build or improve the relationship with your customers, that is, how to make them consider buying your product or service (customer acquisition), suggesting your company to other people (customer growth), or coming back in order to buy from you again (customer retention).
Now that you know how to talk to your customers it is time to define what channels to use in order to reach them. You have to define which social media, partners, type of marketing, and means of communication is better to use and decide where your product or service has to be available for your client to buy it.
Value proposition
Once you have clarified who your customers are and what they want, focus on the value proposition. The process can also work the other way around, starting with the value proposition and then moving on to the customers. The value proposition is: the reason why your company exists, the value it offers to the customer, the way it enables them to achieve what they desire.
The elaboration of the value proposition is closely linked to your business idea, but now it is also time to identify your potential competitors, that is other businesses that already exist on the market that can answer or satisfy the same need that you want to respond to.
To do so, you should do some research, create a list and then ask yourself: how is your product or service better than that offered by your competitors and why should your customer choose yours instead of someone else’s? What makes your product or service unique?
Activities, resources and partnership
Once you understand why and for whom your product or service exists, it is time to understand how to settle in and remain on the market. This means that you will have to ask yourself what activities your business needs to perform in order to create your product or service, offer it on the market, reach your customers, build and maintain a relationship with them, increase your sales and/or customers, innovate your product or service, and generate revenues.
Once you have defined your list of activities, it is time to move on to resources you will need to launch and run your business. Resources can be: physical, intellectual, human and financial. In particular, focus on how many of the activities you need to perform are in line with your skills and abilities and which activities need competences you are lacking, and that you need to acquire from someone else. Always remember that an entrepreneur cannot do everything by himself. Therefore, surrounding yourself with people more competent than you in specific fields will increase your chances of success.
Finally, think about partnerships. Imagine which kind of partner might be useful for your business and who that partner might be and why, but most importantly, think of what you have to offer in return to the partnership. Consider partners as similar to a customer, therefore you must always offer and communicate your value to them.
Costs and revenues
It is the moment of truth. Every resource you indicated in the previous analysis has a cost that you will have to bear. Your business will only work if your revenues are sufficient to cover your costs.
Not all costs are equal: the first distinction you need to make is between fixed and variable costs. Fixed costs are all those costs whose amount will be exactly the same, regardless of whether you sell 1 or 100 products or services, e.g. the rent. Variable costs are those costs that increase or decrease as your sales increase or decrease and are therefore more closely linked to the product or service.
On the other hand, revenue streams are all the ways you can make your product or service earn you money. Once again, you need to think creatively and ask yourself in how many ways your business can satisfy your customers, what additional services you can sell, what different ways of benefiting from your product exist, and how, through the collaboration with partners, you can generate new revenue streams beyond just the selling of your product.
Now that your idea has moved from your head into your hands, it is time to take it out of your room and test it to see what works and what should be changed.
Learn more about: INVESTIGATION AND TESTING OF YOUR BUSINESS PROJECT