Prepare your business for change – video transcript

In this video Prepare your business for change, we meet Penny, who runs a lemonade stand. Learn how she uses the business model canvas to explore how her business operates.

Three. Business model canvas.

Businesses around the world use the business model canvas to understand, change and improve their operations.

Regardless of the size or industry sector of your business, it provides a 1 page overview of how your business works.

To better understand this tool, let's look at how it works with a business example we can all understand.

This is Penny, and her business is a lemonade stand.

Penny knows that being open to change will build the resilience of her business, whether she's proactively changing or reacting to something unexpected.

Listening to her team and talking with them will help her develop better ideas on adapting her business.

Prepare your business for change by using the business model canvas.

This tool helps you capture how your business currently works, what changes might be needed, how these changes might impact your business model.

A business model is simply a plan for how your business makes money and how all the components of your business work together.

Let's understand Penny's current business model using the business model canvas.

The business model canvas is essentially a 1 page business plan. It's made up of 9 areas that describe who your customers are, how you provide products or services and how you create revenue.

Let's take a closer look at Penny's business.

First up, customer segments, which is a list of all the people or groups your business aims to reach and serve. In this case, neighbours, passers-by and friends.

The value proposition describes what value you provide to each of the customers you've identified. Penny's value proposition is refreshing lemonade.

Channels describe how customers access your products or services and how you deliver your value proposition. Penny sells to her customers using a booth or lemonade stand.

Customer relationship describes how your business establishes and maintains a lasting relationship with your customers. Penny plans to sell to passers by and personal contacts of her and her friends whom she's recruited to help her.

Revenue streams describe the way your business will make money. Penny's revenue stream is charging 1 dollar per cup of lemonade.

Key resources describe the most important assets you'll need to make your business work. Penny's got a lemon tree in the front yard, she's also got her dad's secret recipe. With a table and chairs, some cups and some friends, she's got the key resources she needs.

Key activities describe the most important things you must do to make your business model work. In other words, what do you do every day to run your business? Making lemonade is a key activity, so is operating the lemonade stand and putting up posters around the neighbourhood.

Key partners are the network of suppliers that make the business work. Key partners are other businesses that allow your business to do what it does without having to develop or own everything. For Penny, the sugar, ice and cups come from a supermarket.

Costs describe the underlying expenses to run your business, including the key resources, activities and partners. Penny gets free lemons from her tree, but will have to buy sugar, ice and cups, which is a cost. She will have to split her profits with her helpers.

Download and complete your business model canvas now. Consider each of the sections of the canvas and document how your business currently works.

Watch the video Prepare your business for change.