Being an entrepreneur sometimes feels as challenging as it feels amazing. Being an entrepreneur means always finding dozens of ideas running through your mind. The most helpful thing in all this process is to group all the relevant ideas and put them down somewhere: a blank paper, business model form, whiteboard, etc.
In the past, businessmen and entrepreneurs used to do so by creating a well-developed business plan over weeks or months. The problem with business plans is that they’re too time-consuming and useless during the initial stages of the business. Business plans are important and helpful but only at the right stage where your business is growing and expanding.
Therefore, entrepreneurs, today, usually turn to Lean Model Canvas, which is the upgraded version of Business Model Canvas, to group and jot down their business-related ideas and identify areas of weaknesses in the business model. This makes this communication to and understanding of ideas for the associated members of the business visual and helpful.
This is what a Lean Model Canvas looks like:
Let’s dig deeper into each of these sections of Lean Business Model.
Behind every business model is a problem that it claims to bring a solution for. Without figuring out any problem in the market, you cannot offer any product or service. In this first section of the Lean Model Canvas, you’re required to jot down the problem(s) in the market that your customer segment is facing. In other words, you have to list those problems that your business is trying to solve.
As discussed above, your business must be in the market to solve some problem. Here, in this section, list down the solution(s) you are bringing to the market for the problem(s) you mentioned in the previous section.
3. Key Metrics
Every business has some specific metrics that it uses to measure his success and or profitability. This may include anything ranging from tangible to intangible and from monetary value to non-monetary value. Some examples of key metrics are profits, employee happiness index, customer satisfaction, social media insights, and so forth.
4. Unique Value Proposition
UVP is best defined as the promise of delivering value. Your UVP should consist of 1-2 sentences describing why a prospect should buy from you and not anyone else. With your UVP, you have to convince the prospect how you are different and why they should invest their time and money in you rather than some other business. It is also known as the Elevator Pitch where you quickly yet effectively communicate the idea and concept of your product or service.
5. Unfair Advantage
This is the most important part of the business model and requires much of the brainstorming and innovative ideas. Unfair advantage is best described as that one aspect of your business that no one else in the market has. Or simply put, it is the competitive advantage of your business that allows you to do things more efficiently, uniquely, and profitably as compared to your competitors.
Channels are the means by which you’ll reach your customers or target market. At the initial stages of your business, focus on the channels that are cost-effective, give you more reach to your audience, and that you have knowledge about. That being said, your channels may include Facebook, Instagram, Twitter, LinkedIn, online blog, Word of Mouth, YouTube, TV, webinars, emails, or CPC ads, etc based on the nature of your business.
7. Customer Segments
This section of the Lean Model Canvas is the most detailed one. Try to define your customer segment in as much detail as possible. This may include their demographics, interests, or occupation. For example, you may say that your themed kids clothing brand targets both male and female kids aged up to 12 years old. Since it’s a themed clothing brand, you will further narrow down your target market to only those kids who love wearing comic, cartoon, or barbie costumes.
8. Cost Structure
In this section you will list down all the operational and marketing costs associated with getting your startup off the ground. This usually includes the costs of website development, rented office space if any, logistics such as telephone or other devices, office furniture if needed, advertisement costs, payroll costs if any, etc.
9. Revenue Streams
Here the canvas requires you to mention all the ways other than your primary product/service through which your business makes money. For example, you may offer consulting services in addition to your skincare products which adds another revenue stream to the already available one.
The Lean Model Canvas requires you to spend around 15 – 20 minutes filling this form. You may fill it as many times as you want and each time with improved ideas and thoughts. This will help you create a winning business model for your startup. It may sound like a huge task, but it is actually going to save you a lot of time, money, and energy.
Good luck with your activity!