Business Model Canvas Bakery – A business model describes how a company creates, delivers, captures and defends value. Although this definition may sound complicated, defining and developing a business model does not have to be a daunting task. In this step-by-step guide, we’ll share with you a proven process to follow, as well as questions and checklists to help you avoid common pitfalls. As a tool we will use the Business Model Canvas from Strategyzer, which you can download from our template library. Let’s get started!
It all starts with your business idea. Your idea may be around a problem that people encounter in their daily lives and you believe you can solve it. Sometimes, your idea will be for a solution to a problem that is obvious to you, but that everyone else seems to be missing. In rare cases, your idea will be so unique that it can disrupt the industry. No need to write it down separately, it will be displayed on the Business Model Canvas (BMC). It is useful to give your business a provisional name and fill this in the appropriate fields at the top of the business model canvas.
Business Model Canvas Bakery
As a next step, you need to define who are the people who will pay to benefit from your idea and who are the people who will use the products and services related to your idea. These are called customer segments. Sometimes customers and users are the same people, e.g. the buyer of bread in a bakery. Sometimes customers and users are different. On social networks, for example, the users are the members, but the customers are the advertisers who want to reach those members. Write down a brief description of customers and users. Think about where they live, how much money they earn, what their daily lives look like, and their dreams and aspirations. Start with a short description and expand each time you learn more about them. You can use the Customer Personas canvas for this purpose.
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A value proposition (VP) is a statement that tells the customer and user why you are different and worth paying attention to. The key here is to focus first on the benefits you provide to customers and users. A good practice is to create a list of value propositions and then continue to work on refining them for the target segment. To get started, you may want to use the following template.
In the name of the company, we enable customer segments to achieve a list of benefits by offering a solution that solves their list of problems in a differentiated way compared to existing alternatives.
When talking to customers, you may want to dwell on the benefits. When talking to investors, you may need to use the full version.
If you want to go deeper into defining your value proposition, you can use the Value Proposition Canvas by Peter J. Thomson to help you structure your thinking. This canvas is optimized to capture the needs, wants and fears of the segment and allow you to determine how your features, benefits and experience address them.
Business Model Patterns
The customer’s willingness to pay is the ultimate confirmation of the strength of the value proposition, ie. is it a must-have (highly valuable) or a nice-to-have (less valuable). It is a well-known fact that the existence of competition is often confirmation that there is a market and revenue potential. So, research existing alternatives to get a reference view of potential revenue streams. Talk to potential customers and gauge their willingness to pay. If customers see the value proposition you offer as a must, it’s not uncommon for them to be willing to pre-order from you. Record how much, how often, and in what ways customers would be willing to pay and record it in this canvas block. Make sure you have enough indication from your research that customers see your value proposition as a must before you move forward.
Armed with the knowledge that customers are willing to pay for your value proposition, it is now time to decide on your initial channel approach, i.e. how you will reach these segments. You should already have ideas from your knowledge of how existing alternatives are reaching the market. Or you may want to rethink your marketing channels entirely. Whatever works for you, be sure to optimize your choice over time. Typically, you want to capture in this block the type of channel and all the resources, activities, and partners that will need to be present at every online and offline place where a customer comes into contact with your product or service. For this purpose you can use canvas to implement channels.
Depending on the experience you want to offer your customer segments, in this step you should define what type of relationship you want to build. Will you build a direct B2B or B2C relationship or indirect through resellers? Will your interaction with customers and users be human-centered, automated, or both? Note the related keywords to define the type of relationship for each customer segment, and if you used a channel implementation canvas, update it with additional information.
With your set of value propositions, chosen channels and customer relationships defined, you can now outline the key activities you will perform. The “key” qualification indicates those activities that are critical to creating the value proposition, delivering the product or service smoothly to market through the chosen channel, and establishing a strong relationship with customers. In conclusion, key activities, when done well, should result in a significant advantage or differentiation for your value proposition and business model. Decide which of those activities should be performed and managed by your staff and which could be outsourced.
Bakery Business Plan Template & Example [updated 2023]
Once you have identified the key activities, the next step is to identify the resources you will need to perform these activities. Such resources can be people, processes, tools, intellectual property rights, money, etc. Similar to key activities, decide which key resources should be owned and managed directly by your company, and which could be provided by third parties.
Key partners strengthen a company’s ability to create and deliver a value proposition and capture the associated revenue. Typical examples include hardware companies using key manufacturing partners to optimize production costs, national companies using international representatives to accelerate channel expansion, …etc. Note the partners you will use who can perform key activities and can provide the key resources your business model needs better than you can.
The cost structure primarily reflects the fixed and variable costs of running the company (General and Administration), creating the value proposition (Research and Development) and managing the channels to market (Sales and Marketing). A good practice is to create a financial plan to determine the amount of money needed per month to perform all these tasks (Burn Rate). Knowing your burn rate is a must in case you want to ask for an investment to be able to work for a defined period without depending on the income (runway). Better yet, determine the unit economics of your value proposition. It is an understanding of the income as well as the costs associated with the most basic sales object e.g. one item of physical product, monthly subscription, …, etc. With them you can easily determine: profit per unit, the number of units that need to be sold to reach positive cash flow (a state in which you are not eating into your company’s cash reserves), the number of units that need to reach break-even, etc. Give yourself some time to do this, and capture the economics of your unit in this block as well as the income stream block.
In this step-by-step guide, we’ve shared with you a proven process to follow to create your business model with the Business Model Canvas. Adopting our recommendations will help you avoid common pitfalls and progress faster on your entrepreneurial journey.
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