More on the Business Model Canvas tool
The Value Propositions building block
Today’s post author is Victor Oyervides, retail business specialist with FFED. He shares information about one of the tools that our Enterprise Development team uses to support Iowa’s entrepreneurs with business startups: the Business Model Canvas. This article is the second in a series.
The Business Model Canvas (BMC) is divided into nine individual segments named in our initial article. The pivotal building blocks in the Business Model Canvas consist of Value Propositions (VP) and Customer Segments (CS) working jointly. Our focus today is solely on the Value Propositions (VP) building block.
The VP is the motive behind why a customer chooses one business over another. It answers the essential question, “What is it that I am selling?”, a product, service or both. One must not become attached to the initial VP idea. Remember, it is not about me and why I like it, but, “What need or problem am I going to solve?” What value am I creating for my CS?
More questions to ask
Here are a couple more questions you must ask yourself in this segment. Why should CS buy a product or service from me? What makes it unique and stand out from my competitors? Initially, post all of your ideas onto the BMC. There are no bad ideas in this initial phase.
Now it is time to get out of the office and start investigating customer acceptance of the Value Propositions. It is a lot more economical to test your ideas before launching a product or service, or even establishing a physical location.
You may come to realize that you have the wrong customer base for the product or service, or that you have the correct customers but the wrong features in the product. In this phase, you can easily adapt and make any changes necessary. Remember, it is all about controlling costs.
It is key to always keep in mind that the Value Propositions and the Customer Segments work hand in hand. The relationship between these two segments is what make a business succeed or fail.
Watch for more information on Enterprise Development team tools in upcoming posts. If you have a question for Victor, you can reach him at this email, or call (515) 294-7517.