Starter company Renfrew County
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To get there:
Business model canvas
It ensures you have considered the fundamental components of your business model in order to ensure you have addressed them all.
It allows you to align with other internal stakeholders in your project to ensure you have a common view on your business model.
It gives you a baseline on which to consider future changes to your business model.
It ensures that you have considered all critical details before putting together a Marketing strategy
Validates that the business model is sustainable
BUSINESS MODEL CANVAS
Who are your key partnersWho are your key suppliersWhich key resources are your acquiring from partnersWhich key activities do partners perform
Motivations for partnerships
Optimization and economyReduction of risk and uncertaintyAcquisition of particular resources or expertise
What key activities does your value proposition requireDistribution channelsCustomer relationshipRevenue streams
What value do you deliver to the customerWhat problems are you solvingWhat bundles of products or services are you offering to each customer segmentWhat customer needs are you satisfying
CharacteristicsNewnessPerformanceCustomizationGetting the job doneDesignBrand statusPriceCost reductionRisk reductionAccessibilityConvenience usability
What type of relationship does each of your customers segments expect you to establish and maintainWhich ones have you establishedHow are they integrated with the rest of your business modelHow costly are they
ExamplesPersonal assistanceDedicated personal assistanceSelf service automated serviceCommunities Co-creation
For who are your creating valueWho are your most important customers
Mass market Niche marketSegmentedDiversified
Evaluate which market or markets you want to pursue.
How will you define your segments and which definitions best fit your business model.
Geographypertains either to your location or the location of your target customers, where your product or service will be used.
Demographicsare the statistical characteristics of your target market, such as age, gender, education level or household size.
Psychographicscharacterizes consumers by psychological or emotional traits, based on belief systems or personality types such as risk-taker versus risk-averse, or early adopters versus late-stage buyers.
Lifestyleis a behaviorally-based criterion, focusing on the activities your target participates in, from work to hobbies pursued or vacations favored.
Life stagecombines some of the demographic and psychographic characteristics that groups have in common to delineate where or when your targets are in their life cycle: college and career, young families, empty nesters and the like.
Qualify your chosen market or markets.
Once youve evaluated criteria to define your market and selected possible markets to pursue, assess the markets based on their potential for profitability to your business. Answer the following questions:
How large is the segment now? Is it large enough to support my business?
How easy or difficult will it be to reach the segment?
Will the segment grow or expand in the future? How far into the future may it grow?
Does this segment really fit with our business model? Can we immediately meet their needs or will it take a significant change in direction to meet demand?
How difficult will it be to get the data we need to fully understand this segment, to answer these questions?
Gather and analyze data on your selected market.As time and budget allow, use primary and secondary research sources.
Review your own sales data. Who purchases how much of what products or services? When do they buy? Where are they located? Who does the actual purchasing and for whom are they purchasing?
Cross-reference this sales data to industry-specific databases your trade association may publish or your Chamber of Commerce Book of Lists to get basic business demographic information, or US Census Bureau tables for general population data in your area or near where your area is that you are living
Mine information from free or low-cost syndicated reports produced by market research firms to dive more deeply into market segments and glean insights on motivations driving buyer habits.
Analyze the data youve gathered. Look for key similarities and differences among the general customer base, your overall population. Do certain groups bunch together or break apart from others based on geography, demographic breaks or behavior? This cluster analysis gives you more clearly delineated segments, helps you answer the qualification questions and sparks ideas on how to communicate with the target segments through your promotional efforts.
What key resources does your value proposition requireDistribution channelsCustomer relationshipsRevenue streams
Types of resources
Through which channels do your customers want to be reachedHow are you reaching them nowWhich ones work bestWhich ones are most cost efficientHow are you integrating them with customer routines
PhasesAwareness: How can your raise awareness about your products/servicesEvaluation: How do you help customers evaluate your company/value PropositionPurchase: How do you allow customers to purchase your product and servicesDelivery: How do you deliver the value proposition to customersAfter-sales: how do you provide post purchase customer support
TelemarketingSales forceDirect MarketingAdvertisingWeb siteSales promotionProduct PlacementSponsorshipBuzz MarketingPublic Relations
Available resourcesConsist of whatever you can afford
Align with your competitorsDo whatever you competitor(s) does
Percentage of salesDedicate a percentage of your revenue to marketing
Based on objectives Make plan with real objectives and assign a budget
What are the most important costs inherent to your business modelWhich key resources are most expensiveWhich key activities are most expensive
Is your business more:Cost driven: Lean cost structure, low price value proposition, max automation, max outsourcingValue driven: Focused on value creation, premium value proposition
Sample characteristicsFixed costsVariable costsEconomies of scaleEconomies of scope
Legal costsWeb site designStationeryBusiness cardsFurnitureLicencisingMarketing
Include things that you currently have/own and will be using for your business (cell phone, computer,vehicle, etc)
Other = 10%
Cost of Goods Sold
COGS is the cost of those goods associated with product sales. The cost of goods sold includes the costs of all items that are directly or indirectly associated with the production or purchase of goods that have been sold. The main categories of costs included in COGS are:
Direct materialsDirect laborFactory overheadProduction supplies
Or if reselling
Beginning Inventory + Purchases Ending Inventory
For what value are your customers really willing to payFor what do they currently payHow are they currently payingHow would they prefer to payHow much does each revenue stream contribute to total revenueTypesAsset salesUsage fees Subscription feesRenting/leasingLicensingBrokerageadvertisngFixed pricingList priceProduct feature dependantSegment dependantVolume dependantDynamic pricingNegotiation bargainingYield managementReal time market
Price setting limitsUpper limit = What the consumer is willing to payLower limit = production costYour product or services distinctiveness and subsequent demand help set the upper limit.
Costs help you set the lower limit
Skimming PriceSet your price high at launch to address early adopters. Price is lowered later to expand market. Penetration PriceSet your price low at launch to gain the largest market share possible as quickly as possible.
Odd PriceSet prices slightly lower than rounded 4.95$ instead of 5.00$
There is a definitive psychological effect. A perception that the odd price is significantly lowere than the rounded price.
Break even point
Price x quantityFixed costs + (variable costs x quantity)The point where you neither generate a profit or a loss. You simply cover your costs. equals
Sales Forecast for a new businessUnderstand and manage your fixed and variable expensesMarketing will likely be more than you thinkLegal, insurance licensing as wellKeep track of thing you do as labor expenses so you can plan for it later.
Forecast sales using both a conservative case and aggressive caseConservative: low price, two channels, no sales staff, Aggressive: higher price, 4 channels, two sales staff,
Keep track of your key performance indicatorsNumber of contactsConversion ratesSales cycleProfit margin
LOCATION BASED BUSINESS600 people come by your store every day1 out 10 will enter our shop (60 people per day)1 out 5 will buy something (12 sales per day)Average purchase is 30$ (360$ per day)Store is open 30 days per month (10,800$ per month)
BASED ON YOUR COMPETITIONCompanyCo. 1Co.2Co.3YouSales750k500k1,500k400k
Avg Price25k15k30k20kEst. Volume sold30335020Nb. Employ