The recent Innes 48-hour business startup competition reeled in a host of star speakers. Among them was Cheryl Reynolds, chief executive of Waikato incubator SODA Inc.
Reynolds explained the concept of the Business Model Generation Template and why it's an essential tool when it comes to running companies: Understand your business on one page and be prepared to reinvent it.
Know your target markets and understand who your customers are. Think of them as people, give them names, try to think like them and generate experiences around the problem that your business is trying to solve for them.
Define what is it that your business does. What is the unique value proposition, and how is your business solving problems for your customers?
Define how customers access your products and services. Simulate how will it work. Think about alternatives and their costs and how this will affect the value proposition.
Think about how you can engage with customers on an emotional level. How can you communicate to them that the solution you have is exactly what they need to solve their problems? This will generate interest and desire to buy.
You do not operate in a vacuum, in an isolated world. There will be key suppliers and partners you will need to be able to develop relationships with in order for your business to succeed. Identify and analyse these partners, their value for your business and plan how you can best engage with them.
Your business will need to continuously keep executing tasks that are critical for the generation and delivery of value to our customers. Identify these key activities. You will need to cost them in order to see viability of your business. Do not forget that these include management and overhead time.
You have plotted what your business is about; now you need to cost it. Identify fixed and variable costs. Check the prices to come up with realistic rather than optimistic or pessimistic estimates.
Most important, understand how you will make money on your solution. How much will the customers buy, when and for what? How easy will it be to change prices? What effect will it have on your business?