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Visualise your idea with a business model

Describe how you create and deliver a product or service that solves a problem, creating value for your customers and providing sustainable profits for your business

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One page

Capture your business idea on one page using Ash Maurya's Lean Canvas methodology

Clear

Clarify your idea so everyone can understand your model and buy into your vision

Succinct

Break your business model down into intuitive and easy to understand components

Effective

Use your model to explore different scenarios and how they will impact your business

Your business model describes how you solve a problem

When you decide to start a business, you need to make sure you have a problem worth solving. This solution to a real customer problem is the value your business provides.  

An effective business model creates value for your customers which they can then share with you.  By solving your customers' problem, you provide them with value - for example in the form of time or money saved. Your customers will then give some of this value back to you as revenue. For your business model to work, you need to create more value for your customers than you capture back (what you charge them).  

“Life's too short to build something nobody wants” Ash Maurya

Why you need a Business Model

Too often we see businesses that have created long, complicated business plans which are filed away and never used. In contrast, the one-page business model is an effective and easy-to-use solution - a practical and succinct way of explaining how a business creates value on a single page.

A one-page business model is a powerful tool that defines the key business, product, marketing and financial aspects of your business. We use the Lean Startup approach to create a business model that will set your business up for success.

“A business model describes how you create, deliver, and capture value from your customers” Saul Kaplan

What is a Business Model?

A business model explains how a business will generate profit. If you want your business to be profitable, you need a working business model. A good business model will explain how you will create value for your customers, and how that value will create revenue for your business. You can’t get to profit without revenue and you can’t get to revenue without value creation.

There are many ways to create and document a business model. Our favoured approach is the Lean Canvas, which is a methodology adapted by Ash Maurya from Alex Osterwalder’s Business Model Canvas and is used by businesses and startups worldwide to capture their business models. It deconstructs a business idea into assumptions and describes how it will create value, deliver value and capture value.

An effective business model will provide you with a roadmap and plan for your business and enable you to identify and manage the risks that your business will face. It's an iterative process that encourages you to get your product to market early to gain valuable feedback from your customers.

Creating a Business Model

The Lean Canvas business model allows you to deconstruct your idea into nine related components that underpin the key business activities of value creation, value delivery and value capture. Creating a business model using Lean concepts such as minimum viable product (MVP) and build-measure-learn cycles enables your business to deliver value to your customers early and learn from them.

Lean Canvas Business Model

Completing the nine components of the Lean Canvas is a quick and efficient way of defining your business in terms of its product and market. It's format encourages you to summarise your business clearly and succinctly.

Components

Problem - what problem are you trying to solve? This is not the problem that your product is solving, it is the problem that your customer market is experiencing.

Customer Segments - who has this problem and how do they describe the value of this problem going away?

Unique Value Proposition (UVP) - a succinct and compelling message that describes why a customer should buy your product.

Solution - what are you going to build and offer to your customers to make their problem go away and unlock value? 

Channels - how do you reach your customers to persuade them to buy your product?

Revenue streams - what's your business revenue model, eg transaction-based, subscription, or service revenue?

Cost structure - cost drivers such as cost of customer acquisition, distribution costs and people.

Key metrics - lead and lag measures reflecting key business activities

Unfair advantage - something that is difficult for your competitors to replicate

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Frequently asked questions

How long does it take to create a business model?
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It's much more efficient to create a one-page business model than a lengthy business plan document. We usually allow half a day with a business founder to create a Lean Canvas business model. This is not the end of the process - the model will benefit from regular iterations and updates as the business develops.

How does the business model link to financial model?
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The financial model builds on the business model - in effect it puts numbers to your business model and lets you know (among other things) what profit you can expect to make. Therefore we always advise our clients to focus on their business model before investing time and effort in creating a financial model.

How is the Lean Canvas different from the Business Model Canvas?
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In our opinion the Lean Canvas is simpler to use and more suitable for startups than the Business Model Canvas. Ash Maurya adapted the Lean Canvas from Alex Osterwalder's Business Model Canvas with startups in mind. In summary - the Lean Canvas is a practical tool which can be easily adopted by most startups, whereas the Business Model Canvas lends itself to strategic analysis of more mature businesses on a larger scale.

Have more questions?

Just reach out, we’re always around to answer any questions.