If you an avid reader of our blog, you will know that Skill Build started last Thursday (20th). As part of this, we ran a session on how to come up with a business idea and how to scope it out. To run alongside the series of lectures, we are running a series of blogs where you can catch up with anything you have missed.
This is the second blog about session one. This blog will focus on the Business Model Canvas, which is a really useful tool in scoping out this business idea. In the last blog, using an ideas generation technique, we spoke about developing a ping pong ball that you put into kettles, which jiggles when the water is safe to drink. 50% of the profit goes to a cancer charity which provides wigs for patients.
So how does each segment affect the idea?
The Business Model Canvas is a tool that people use to help consider different parts of starting a business. So whether it is logistics or marketing, it is all covered. There are nine sections in total and my example of the ping pong ball should help you understand each section more clearly.
Customer Segments– Who are our customers? Our end users could be really busy people or people who have a personal connection with the charity. However, because the end user will be buying from stores, our customers, who will be supermarkets.
Value Proposition- What is the value of having this product? Well, it will reduce the time it takes to make a cup of tea whilst supporting a great cause
Key activities- what activities does our value proposition require? We need to do research to make sure the ping pong ball works and we need a well thought through marketing campaign to make this work
Key Resources- what are the key things that need to make the value proposition successful? In our case, we would need a product that worked; a good marketing campaign and a good distribution network so that people will be able to get them.
Key Partners- who do we need to help us make the project a success? Well, there are a number; we need a charity partner, a distributor and someone to produce the ping pong balls.
Customer Relationships- what type of relationship does each of our customer segments need? Well, we need to establish a good relationship with the supermarkets so that they will sell our products. In order to do this, we would need to make sure our suppliers would be getting our product to them when they need it.
Channels- How do we reach the customers? Well, we would need to reach our end users by using a marketing campaign that includes social media. However, our supermarkets would need to be reached through sending them information, samples etc in order for them to understand the product, the idea behind it as well as us as a business.
Cost Structures– What are the largest costs to the business? In our case, I think it will be production of the balls as well as the marketing of the business. Both of these things will decrease over time due to economies of scale (link)
Revenue Streams– This section talk about how much are our customers are willing to pay. Also, how do they pay? Well, according to my research, you can get 6x ping pong balls for £0.98 + delivery and a colour changing egg timer is £3.95. Therefore, I am looking at £2 per specialised Ping Pong Ball. I think they would buy in stores throughout the UK, therefore I will be dealing with these companies rather than directly to the end users
Through completing this business model canvas, I know what my product is, who I need to talk to make it work, what my unique selling point is and much much more. Hopefully, this has helped you understand more about the business model canvas but why not check out this Prezi which will give you more information. want to have a go- check out the following link.
For those of you who don’t know, Skill Build counts towards HEAR and the Sheffield Graduate Award. You need to attend five out of seven sessions and pass an assignment in order to get the Skill Build Award. There is still plenty of opportunity to get involved in Skill Build. Why not check out the Skill Build webpage to find out more and to register.
(Thanks to IceCario for image)