Using the business model canvas for an online business or website helps you identify the key actions to take for your online business.
- Communicate Your Idea Clearly and Concisely
- Make sure that others understand your idea clearly so they can get behind it. – Lean Stack.
If you are dreaming of earning income through a website or online business, treat it like a business. Have a plan.
Implement the plan and adjust it where needed. Be ready to fail, but understand that failing fast is a good thing! It saves you time and money. If what you are offering doesn’t resonate with your target audience, better to learn that quickly then you can struggle on for months or years!
How to get started with using the business model canvas for an online business.
Eric Ries published “The Lean Startup” in 2010. This book changed how we think about bringing ideas to market: business and new product ideas.
Lots of great resources have emerged to help people apply lean methodologies and to develop online business models, including:
- The Lean Canvas
- The Business Model Canvas
- The Value Proposition Canvas
And here are some people have bee thought leaders in this area: Eric Ries, Steve Blank, Ash Maurya, Alexander Osterwalder.
Why have a business model canvas for your online business?
Lengthy business plans take time you may not want to invest when you have an initial idea and simply want to test and validate.
This is a key step before investing too much time and resources into an idea. Having said that, doing a business model canvas can be done both when:
A business model canvas also:
- Gives you focus and direction.
- Allows you to take prioritise and take the most important actions.
- Reduces risk.
A business model describes how you create, deliver, and capture value back from your customers. – Lean Stack
The Internet is full of broken dreams. Don’t let your idea and online business join them.
What are the key elements of the business model canvas?
You can use either the lean or the business model canvas. If you are a not for profit, the mission model canvas is designed for organisations where revenue isn’t a key focus.
You can just put the headings below in a word document and it will work, or you can use one of the many templates available through a Google search.
The business model canvas includes:
1. Unique value proposition — Your unique solution for a customer’s problem
2. Customer segments — People willing to pay money for the problem you are solving for them. (Segments represent different types. For e.g., Google has business customers and consumers)
3. Key Resources — Resources needed to run your startup (e.g., engineering team, Intellectual property, funding etc.)
4. Channels — How will we reach out to prospective customers (e.g., Retail, wholesale, reseller etc.)
5. Customer Relationships — How do you acquire customers, how do you retain them and how do you grow them.
6. Revenue Streams — How will your startup idea make money e.g. Subscription or freemium or pay-per-use
7. Key Activities — Activities that enable your business (Product development, sales, marketing etc.)
8. Key Partners — Outside resources that help your business model (e.g., vendors, strategic alliances etc.)
9. Cost Structure — Fixed, Variable and other costs you have to pay (e.g., rent, salaries etc.)
In conclusion
Doing a business plan or a business model canvas can help your online business at any stage. You can also revisit it any stage.
The Business model canvas is now the standard used not only by startups but also companies like Microsoft, GE, Mastercard. The goal is to look beyond spreadsheets, market research and financial projections.
It also helps in enhancing and focusing your business activities as the business evolves.