Hafa Adai and welcome to part 3 in the BMC series. Today we are going to be finishing off the nine components in the BMC.
Last week we discussed the revenue streams, channels, and key activities, all of which have to do with the operation of your business. Today’s final three components focus on expenses in not only money, but also time and relationships.
The last three components are cost structure, key resources, and key partnerships.
So, let’s dig in.
You can download the-business-model-canvas by clicking the link.
Key resources is the support that you and your business needs to run smoothly. Most obviously, if your starting up then you are probably going to need financial support. If you have a customer facing business, or even if you have a business to business model, you are probably going to need people that have great customer service (aka human capital).
What are the resources your business needs to operate? Do you need people from a specialized field? Do you need a specific piece of equipment? Do you need a certain type of space to work in?
Once you identify your key resources you will have a better understanding of some of your cost structure and can begin filling that in.
Cost structure is pretty simple. It is the costs or expenses that your business incurs before and during operation. This includes everything from a paperclip to that big piece of equipment you need. It includes one time costs and recurring costs.
What costs does your business incur? Is there a heavy startup cost? Are the recurring costs too high to continue operation once you’ve opened? What are the main costs that if not paid or anticipated will have your doors closed?
Once you’ve identified those factors you are ready to move on to Key Partnerships.
Key Partnerships are the people or businesses that your business wants or needs to align themselves with in order to be successful. I save this section for last because you can look over the rest of your BMC and pin point what relationships you would need to make the things you’ve identified happen.
What partnerships should you make from your value proposition? Do you need a partner? What about from your customer segments? Your customer relationships? Your revenue streams? Your channels? Your key activities? Your key resources? Your cost structure?
For example, if your targeting tourists, maybe you want or need to form a relationship with Guam Visitor’s Bureau (or your area’s visitor bureau). If you need financial support then you may need to partner with a bank or an investor.
Once you identify all of the partnerships that are essential to your business you will have a clear picture of what your business model is in front of your eyes.
Your Done. Now what?
Congratulations! We’ve finished the BMC and hopefully you have a more concrete version of your business model laid out in front of you. It’s important to note that this, by all means, does not mean that it has to stay the way it is. You can have multiple versions. You can test and evaluate your BMC and decide if its the best model for you. If not, change it. Nothing is set in stone.
In my next post, I’m going to try and accomplish two things. The first half will be how you can use your BMC to look at the world surrounding your business. The second half will be the BMC case study, where I will take a business that is pretty well known and dissect it into the BMC components.
Until next time.
Go forth and shine.