Strategy Tools for Business & Pivot Planning
Liz Feldman (00:00:03):
So today we’re, we’re going to talk a little bit about, um, the difference between a business plan and a business model and why, and when you really might use the business model, since that is the focus of today, but just to understand what the difference is, um, we’ll talk about the business model, canvas and its part. So, you know, what this particular model looks at and uses to help you plan your business. Uh, we’ll apply the business model canvas to a made up business, uh, and then they’ll cause really what the business model canvas does is it, it helps you assess what you’re already really good at and maybe what has changed and therefore what you may want to focus on going forward, because that, that already is your strength and you don’t have to be good at everything as a business, but you, you probably want to be really good at a couple things that make you stand out.
Liz Feldman (00:01:12):
Um, and then we’ll the goal is to help you understand how the business model canvas can help your existing business pivot or adjust. Um, so this could be during COVID, but it could be during any other major change. Um, right now COVID is happening. And so that is like the big major change, but potentially when the vaccine comes out or when some other new information comes in, we will be adjusting and strategizing again, just to, to talk briefly about a business plan. So here’s a definition from Investopedia. What is a business plan? A business plan is a written document that describes in detail how a business, usually a new one is going to achieve its goals. It lays out a written plan from a marketing financial and operational viewpoint. So often this is a piece of, of business language. So often when people refer to a business plan, they are referring to one of those longer written documents that a bank might need for financing that a potential, um, partner might want to read about your business, to know all about it.
Liz Feldman (00:02:43):
Um, but the word business plan gets used in a lot of different ways. So one of the ways I’ve, I’ve heard people think talk about a business plan is when you use a capital B and a capital P for your business plan, it actually means the written out version often used to get financing or alone or in a, um, more formal professional setting. But people also use the word business plan as a common language. A basic definition down below a business plan is the plan for your business. It’s just some way of understanding and communicating what you’re planning to do with your business.
Speaker 2 (00:03:30):
Liz Feldman (00:03:32):
Even with this very simple term, sometimes it can be confusing. And it’s always okay to clarify when someone talks about business plan, are you talking about that written document that people use for financing, or are you just talking about how to strategize for your business and make a plan of where you’re headed and what that will take?
Speaker 2 (00:03:56):
So a business model. Okay.
Liz Feldman (00:04:00):
Um, so the definition here also from Investopedia, um, the term business model refers to a company’s plan for making a profit. It identifies the products or services, the business plans to sell. It identifies the target market and any anticipated expenses. They’re important for both new and established businesses.
Speaker 2 (00:04:24):
So business models
Liz Feldman (00:04:28):
Really are talking about the money that’s going to come in and the money that’s going to go out and does that, what’s the plan for, for making money and making a profit. So for example, um, if I really want the world to love cats more, right? This is like what I want to happen in the world. There’s a lot of business models I could look at, right. I could look at, um, being a cat breeder and, and, um, selling cats, right? So that, that would be a business model. I could look at, um, making cute pictures of cats and selling pictures, right. And, or selling drawings. And that’s it, that’s a totally different business model, all with that same purpose of making people love cats. Um, there’s a lot of different things that I could do or things that I could sell with different expenses involved that would create that business model.
Liz Feldman (00:05:34):
Um, and often I think one of the, the questions are that sometimes I’ve used the word, uh, like a broken business model. And that’s when you are working with a business owner and we realize something like, Oh, I’m going to sell these hats, but the price that they wanted to sell the hats at when actually do the numbers, the cost per hat is more than the price that they were selling at. So when you realize that you realize it’s, let’s say a broken business model, and unless you can figure out either how to sell the hat for more money or to lower the costs, um, that business model doesn’t work. So there’s a difference in business model and business plan and trying to write it out in the most simple way. Um, the business model is about how the company generates a profit. Whereas the business plan, especially big B business plan, big P little business plan is that document that has strategy and financial performance and a lot of details around how you’re going to enact that business model. So you need to have your model, you need to have your plan of what you’re selling and understand what it costs in order to create the plan. So really simply put the business model canvas, which is just one way to look at your business model. Um, it’s a great tool that allows us to understand your business model and articulate what the key components of it are.
Liz Feldman (00:07:31):
You know, just to think about why even consider using a business model or the business model canvas, um, in general, they’re, they’re really easy and simple to understand fits all on one page. So it actually makes you be very focused, um, in what you put on there, kind of, kind of in that same way where, um, it’s sometimes hard to be concise, right? It’s easier to just talk a lot, but to really get down to the basics of what is, what are the key components. Sometimes those take some, some thought and time that’s flexible. Cause there’s only a few words in each section. You can, um, the read one part and change it really easily and then see how all the pieces affect each other. Uh it’s customer-focused so you always start with that section that is around your customer, your target market, your customer segment, and that affects the rest of your plan because as the world around us changes and the customer’s needs change, most likely your business model
Speaker 2 (00:08:46):
Liz Feldman (00:08:48):
Easily shows connections between, uh, the different key components of your business. And it’s really easy as a tool because it’s all in one page to look at it, to show someone else to talk through it. So those are just some reasons why it’s really nice versus one of those long, longer business plans that are written out. That could be 15 pages. It’s just harder sometimes to be able to see it all when it’s on 15 pages. So this is what the business model canvas looks like. And, uh, Colleen, we have, uh, we have this right now downloaded
Speaker 2 (00:09:28):
This, um, came from
Liz Feldman (00:09:30):
One of the websites that talks a lot about it. And calling if you would put the PDF,
Speaker 2 (00:09:38):
Um, I’ll ask her to do that throughout, um,
Liz Feldman (00:09:41):
Every so often. So you can have this PDF, but you can also download it from the internet very easily. Um, and you don’t need to download it right now. Um, but if you’d like to have something to fit a lot on or work on while we’re here today, feel free. So, um, the business model canvas has nine segments and I will kind of move my little cursor around and I believe you can see that as I move it around,
Speaker 2 (00:10:11):
Liz Feldman (00:10:14):
So it starts over there on the right with customer segments. And I’ll talk about each one,
Speaker 2 (00:10:19):
One, uh, in-depth after.
Liz Feldman (00:10:23):
So for now, I’ll just say it starts with customer segments. And then typically you go next to that one in the center value proposition, then it talks about the channel. So the way that the value is communicated to the customer and then the customer relationships. So how,
Speaker 2 (00:10:43):
Liz Feldman (00:10:45):
Maintaining, finding, managing those. And then it talks about the revenue stream. So where does the money actually come from? And then the key resources, what do you have that makes, that makes us business possible? The activities that you do, key activities, the key partners or partnerships,
Speaker 2 (00:11:07):
Uh, that exists that help your business and the cost structure, the major places that you spend money.
Liz Feldman (00:11:15):
So we’ll, we’ll kind of just talk about each of these sections,
Speaker 2 (00:11:20):
Um, a little bit more,
Liz Feldman (00:11:24):
The, the concept of this overall is simple. And sometimes the first time when you see
Speaker 2 (00:11:32):
Liz Feldman (00:11:34):
Sometimes it takes a little while to start to figure out which parts of your business go into each box. Uh, so today I’m going to spend a little time. I didn’t actually ask how many of you have used the business model canvas before, but I am going into this assuming that it’s, it’s pretty new for most folks and, um, coming in with the idea that I want you to understand the tool in order to then be able to use the tool in more interesting ways.
Speaker 2 (00:12:09):
Liz Feldman (00:12:10):
So this first segment is the customer segment. So this is the part where, um, you might have one group or two groups or three groups here, usually a couple words each. So it’s answering the question for whom are we creating value or who are the most important customers currently? So, um, you know, you might be as specific dependent thinking of some of the businesses who are here. So if you have a restaurant in the coli neighborhood, for example, maybe you have a, a customer segment that are, um, people within walking distance of the location. And maybe it’s even more specific if you know that a lot of those people are families or single people, right. Then you may have, um, another customer segment that would be, uh, someone willing to travel for great Mexican food who lives in the right. So, um, or maybe, um, a restaurant could have a customer segment of, I mean, previously it might’ve been corporate lunches. Uh, now I’m not sure how many of those are happening so that those are examples.
Speaker 2 (00:13:44):
Liz Feldman (00:13:45):
So the next section is value proposition. So what is the, the value that is delivered to the customer? And this is always an interesting one because the value that is delivered to the customer may not be
Speaker 2 (00:14:04):
The reason that you think you’re great. It’s the reason that they think you’re great.
Liz Feldman (00:14:09):
You might think you’re great because you love the quality or you, you know, that the quality of your food is amazing, but they might think you’re great because there’s outdoor seating, it’s walking distance and they’re just so thankful to have a place outside. Right. And the quality is good. So that makes, that makes them happy. But that might not actually be the reason that they’re choosing you. Um, so it solves a problem. They know they have, right? Uh, sometimes some examples of value propositions could be the convenience, which would be that walking distance piece. Um, maybe your brand is super well known. Um, I just put some ideas of what, what, um, maybe you have similar values and part of your, the mission of your business is, um, it was very similar to the, your customer segment and they would rather pay more or travel further to spend money, uh, with someone over that with a business that has aligned values.
Liz Feldman (00:15:17):
So the channels, um, describe how you reach the customers and, and you could use your own channels, uh, or you could use existing ones. So, um, if you’re on, I think they call them now the official word is third party apps. So those are things like door dash grub hub. Um, that’s a channel of how you reach customers that is, um, maybe not your own, but if that’s where a lot of your business is coming from, that would be considered a channel. Uh, sometimes it could be your, your phone, right? That’s how people make an order is through phone. Um, it could be through your website if they can make orders, uh, it could be through your retail store, if you have them, it could be through distributors. So it depends, depends on what your business is. How do you, how do people actually, how do you reach them and how do they
Speaker 2 (00:16:23):
No, how to pay you? What’s the way that they, that you get paid would be channels, customer relationships.
Liz Feldman (00:16:35):
This is the part of how do you get, keep and grow customers. Um, sometimes this one can be, uh, it’s almost like a mental exercise as a business owner to think through. How did it’s, it’s called a customer journey, right? So how did they, uh, how do customers normally search for your type of business? Um, where do they look once they found you, how do they purchase once they’ve purchased? How do you stay in contact with them to let them know of new opportunities or new ways to spend money with you? So maybe you have customer relationships managed partially through a newsletter. Maybe they’re finding you through Yelp. Maybe you have coupons, maybe there’s a referral program, but how, how are you? And this is a good part because I think some, sometimes this piece in particular business owners are so focused on providing great service or a great product.
Liz Feldman (00:17:45):
And, um, managing the relationships with customers, doesn’t always get as much attention. So this, this makes sure that you think about how am I managing that relationship with customers both before they buy, while they’re buying and after, and then revenue streams, where does, where does the money actually come from? It’s interesting. When I was looking up this business model canvas, which I’ve been working for with, for a while, and it was actually something that in a business school, they had us work with the business model canvas, way more than they had us work with business plans, like written out business plans, because this is the way to really assess ideas quickly, to be able to see it. And if you’re a visual person, like I am, and like many people are, you could put multiple of these canvases up on a wall and look at them.
Liz Feldman (00:18:39):
And, um, for me, that’s really helpful. So, you know, on online, there’s all these examples of, you know, how does Skype do it? How do all of these big companies, um, make their money, right? Especially the ones that have free services. Like most people use the free services of Skype, but there’s enough people that use it and then pay for the, uh, the, the, through the pricing structure that the company makes it right. So, um, I feel like with local, small businesses, often the revenue streams are more clear. Uh, so you might make, uh, money through direct sales, individual sales of the product. Um, maybe you let there be ads on your website. Maybe there are sales to distributors. Maybe you have both products and services that you make money on. Um, so you just want to write some of those words down. And I think before we move into the left side of the business model, canvas, it’s worth noting that all of these ones on the right side are customer focused. And that’s always where you start with all of these pieces that are customer focused, because if there aren’t people who are willing who see the value and are willing to pay, but you can reach and that you can maintain, or have these re relationships to make money, then it doesn’t really matter what the, the left side is more about the costs and the backend operations.
Speaker 2 (00:20:32):
Liz Feldman (00:20:34):
The sixth section is the key resources. So this section is about what you have as a business that is really, uh, important to your model. So maybe it’s the location, maybe it’s your trained staff, which took years to train. Um, but a new starting up business. They, they won’t have that. Um, maybe it’s intellectual, um, copyrights brand, um, patents, maybe it’s that you’ve been able to save a certain amount of money and you have financial resources, maybe it’s your amazing online platform. Um, every one of these boxes is really, uh, personalized for your business. And it’s important to like this business model. Canvas really gives you the opportunity to think through what does your business have that that makes it successful. And that’s what you have the word. And I will say, I use the word assets here. Oops, oops, go back. Um, I probably should have used the word, um, like strategic, uh, it could be assets. I just think sometimes the word asset gets confused with things that must have monetary value and be expensive that would show up on your balance sheet. So I don’t want it to get confused because some things that you may have may not be a financial asset, but it could be a business asset. So I might actually change that one for next time and try to think of a word that could be assets, but also could just be like the strengths of your business that help it run.
Liz Feldman (00:22:49):
Um, okay. So for the seventh key component is key activities. So this is really important because it’s what you actually do that makes the business work. There may be. Um, so, so maybe, uh, what, what your activities are that are really important is your amazing customer service. Um, maybe it’s that you make this great product, maybe it’s a service, not a product. Um, but it’s your ability to fill that out may be, um, your ability to train staff because you’re in the restaurant industry. And you know, that there’s a lot of turnover, but you’ve gotten really good at training staff. And so that’s, that’s one of your ex Tiki activities and what keeps your business going. So, um, I put a few ideas on the slide about what it could be, but it’s also really individualized to your business. What are the things that you do, um, or your business does that keeps that are what keep it going and really differentiated than others.
Liz Feldman (00:24:18):
And this is different than your key partners or key partnerships. Um, so these are the tasks or activities that are also really important, but that other people or organizations or platforms you use there’s, you don’t have to be good at everything. So, um, like even in the idea of a restaurant, maybe you don’t do delivery. Uh, you have a key partner that does delivery, right? Um, there are definitely manufacturing businesses that don’t actually manufacturer. They pay somebody else to do all the manufacturing. What they’re really good at is sales, but they’re key partners are doing almost everything on the backend. Uh, but the key activity for that business could be the sales piece. So it’s really good to think about what you’re not going to do so that you can be really good at your key activities. And I think this is actually, this is an interesting topic for small businesses because often you want to be the one-stop shop for everything. Um, and there’s a really fine balance because it’s hard to be really good at everything. And it’s hard to be really well known for everything, but you could be really well known for this one for, for your customer service. And that could be the reason that you get enough sales.
Liz Feldman (00:26:03):
And this last piece is cost structure. So where, where are the major costs, uh, for your business? So if it’s a restaurant, staff will probably be there, but if it’s a service business, um, really depends on what the service business is, but there maybe it’s your online platform because you make it really good and user-friendly, and that’s part of how you get people in, or maybe it’s your marketing is actually the biggest, um, the biggest costs. So, um, I’ll do I’ll show an example. And then, um, and then we’ll kind of take some questions. So, so here was just, this is a basic business model canvas. I made this up from a pretend restaurant downtown, and this is their 2019 business model canvas. There could be plenty of restaurants downtown, that would also be different than this. Um, but this could be, this could have been a functioning business model of a restaurant downtown. So we’ll start over, um, in the customer segments. And, um, so they had identified that there are three main customer segments. One were individuals working downtown, right, particularly getting lunches. Um, when I wrote this business lunches of like eight or more people, this would be like those corporate lunches, people that are better ordering for corporate lunches, they also did catered events.
Speaker 2 (00:27:44):
So those were
Liz Feldman (00:27:44):
The main, um, and catered events, um, for simplicity sake, you know, this could have been marriages, this could have been corporate events, um, but catered events. So then we move over to the value proposition and things, that reasons that people really liked this particular downtown business, it was easy, tasty and accessible, right? That worked really well for those individuals working downtown, uh, for the business. Lunchers they really liked the opportunity. Not only was it easy, tasty and accessible, um, but it showcased a PDX local business at a corporate lunch. And they liked having that as part of their mission. Um, and then also, um, dependable tasty and the brand was memorable. So that was, that could be for any of them, but it was also particularly for catering
Speaker 2 (00:28:44):
Events. People wanted to have very dependable foods.
Liz Feldman (00:28:49):
So then how did they reach their customers through these channels, um,
Speaker 2 (00:28:56):
Through third-party apps, through the phone, um, and people could come pick up their food,
Liz Feldman (00:29:05):
Um, how do they maintain customer relationships? Uh, they had a great, uh, following on Yelp, they were getting, say quite a few new customers per day through Yelp, through they had a referral program, uh, and they did coupons, right? How did they make money to individual meals, meals to go? And then for their catering events, it was food and rental equipment, um,
Speaker 2 (00:29:31):
Through their events,
Liz Feldman (00:29:34):
When they thought about what their key resources were, they had their commercial kitchen, they have their dying in space. They had great train staff and they had a strong brand. The main activities that they did were cooking. They could cook both in single, um, or larger portions may also have their own reservation in order system versus, um, using an external one, uh, their key partners, they use third party apps. So door dash was definitely helpful in those other, um, caviar, those other third party apps, uh, their suppliers bringing their food, and then they didn’t have their own, let’s say cleaning or bookkeeping. Um, in-house they hired out for cleaning bookkeeping and legal. So their main cost structure was around their food, their staff and their business services.
Liz Feldman (00:30:35):
So this is where they were from 2019. Um, and that, before we go into, I’m not sure which of these pages to stay on. I’d love to just open this up, uh, for questions or for ideas. Cause if you can’t see kind of where your business was, it’s hard to start changing this to adjust or pivot for the future. So, um, if anyone is struggling or if anyone is very clear on, Hey, I’m, I’m pretty sure, you know, one of my main customer segments is, uh, moms with kids under five or, uh, people who live, uh, 20 or 30, some who live within 10 blocks of my business, or you’re like, Oh, I have no idea what my customer segment would be. Um, just want to open this up a little, uh, just for any, either questions or comments before we, before we move on.
Speaker 2 (00:32:06):
I know that I like, um, the business model canvas, because it’s, it’s nice for brainstorming. Um, it’s definitely, definitely a nice first step for a business plan. And it’s not as intimidating since it’s just one page.
Liz Feldman (00:32:28):
Yeah. It’s, it’s a really great tool to like print out like six of them and write on them and then put them up on your wall, especially for those folks who would rather work, not in a computer when they’re brainstorming.
Speaker 2 (00:32:44):
Okay, well, we will,
Liz Feldman (00:32:45):
So we will continue on and I will continue to assume that this is still a really new tool for folks. Um, so, so hopefully the basic concepts are coming across.
Speaker 2 (00:32:59):
Okay. So the, the
Liz Feldman (00:33:06):
Piece about the BMC or the business model canvas is that it helps you articulate your business foundation. It helps you identify where you do and where you want to stand out, um, in that idea that you really can’t be great at everything, especially when you’re starting, but you can be really well known for one thing. And that can be enough of a reason for you to succeed. Um, that whole idea around how it’s pretty hard, um, for perfectionists to be business owners, because, um, you’re always going for what’s good enough, but there might be one area that you’re really going for. I want this to be, to be standout for the customers. Um, and then it helps you plan and respond when changes happen.
Speaker 2 (00:34:00):
Liz Feldman (00:34:03):
Um, for example, the big change that is happening right now is COVID and pandemic and, uh, racial issues and awareness and protests and, um, economic,
Speaker 2 (00:34:24):
Uh, recession. So,
Liz Feldman (00:34:28):
So, um, last week Emily was sharing that this was some of the most recent, uh, information about what is changing right now, or what has changed, um, in the world around us,
Speaker 2 (00:34:42):
Liz Feldman (00:34:46):
New information, and then seeing how that changes your business model is really important. So right now with COVID, um, online is exploding. 50% of customers are buying the majority of their items online. This is according to Google, right? So this is good information as a business owner, if you’ve never sold anything online and 50% of customers are buying online, this might, this is worth taking into account. Mobile matters. 76% of smartphone users are more likely to purchase from companies who have good mobile sites. So if you’ve never thought about, uh, how your platform looks on a phone, it could be this, this might be something that you would put energy and time into search data that spending trends, particularly for home improvement, gardening, cooking at home, crafting at home or workout equipment,
Speaker 2 (00:35:47):
Um, has increased.
Liz Feldman (00:35:49):
So that’s also really interesting, especially considering what a lot of us shared about what we appreciate or how we spend our weekend. Many of us just talked about various home improvement, gardening, cooking at home.
Speaker 2 (00:36:03):
Um, right. So this is real for, this is real for many of us. Um, and then this piece about filling a need.
Liz Feldman (00:36:13):
So nearly 40% of us shoppers say they can’t find the products they need or want to buy and have bought brands. They wouldn’t normally buy, um, cause they want something and they can’t find what they’re used to buying, which also,
Speaker 2 (00:36:28):
Liz Feldman (00:36:29):
The door for new entrance.
Speaker 2 (00:36:33):
Um, which is also exciting to think about.
Liz Feldman (00:36:37):
So that those are just a couple little pieces of information of what has changed about, um, life,
Speaker 2 (00:36:46):
Uh, during this time. So
Liz Feldman (00:36:49):
Let’s say you had already created your, this was my basic business model. I know what it is. So now you want to look at it and think about what changed, right? So starting over in the customer segments, there are still individuals out there who would buy your food, but they’re not working downtown anymore. They’re working at home, you know, you’ve lost your business lunches or the corporate lunches really aren’t happening. People are not getting together and you’ve lost your catered events, uh, because, um, there’s not these big hundred person weddings. Maybe there still are some like eight people weddings, but
Speaker 2 (00:37:29):
Liz Feldman (00:37:33):
Obviously what you thought of as a catered event is now gone.
Speaker 2 (00:37:36):
All right. Um, when you say,
Liz Feldman (00:37:38):
Think about what your value proposition could be, it still could be easy and tasty. Is it accessible? So that’s a good question. If previously you were accessible because people were downtown,
Speaker 2 (00:37:51):
Liz Feldman (00:37:52):
It’s also thinking about, is there a way to make it accessible? Uh, previously you were showcasing, um, PDX businesses at corporate lunches that that really may not be a thing anymore. Um, you still could be that dependable tasty brand that has memorable,
Speaker 2 (00:38:12):
Right? So, um, are there
Liz Feldman (00:38:16):
Things that might’ve changed, your suppliers might be having issues?
Speaker 2 (00:38:21):
Liz Feldman (00:38:22):
You might not be able to get some of the meat you previously got or the prices may have gone up. Oops. And then down here in your revenue streams. Well, you’re definitely at those, you’re not, so you’re not doing events. You definitely aren’t renting out rental equipment at the events, right? So just clearing some space for the things that no, no longer fit with this new information. And then also looking at, well, what are the things that I do still have? Like what might I leverage in a different way? Right. So I’m definitely still this dependable tasty brand Yelp is doing great. There’s still this opportunity probably for referral programs, maybe newsletters.
Speaker 2 (00:39:13):
Liz Feldman (00:39:16):
You still have your resources of this commercial kitchen, right? You still have, you’re still good at the same things of cooking and food. Those third party apps, they’re still, those are really taking off,
Speaker 2 (00:39:31):
Liz Feldman (00:39:33):
Which by the way, and I’ll make a plug since this just recently happened, but the city was basically lobbied to restrict the percentages that third party providers could,
Speaker 2 (00:39:46):
Could, um, have an, they used to charge,
Liz Feldman (00:39:51):
Well, they’re all a little bit different, but about 15% for takeout and twenty-five to 30% for delivery and Portland for the time of COVID has limited it to 5% for takeout and 10% for delivery. And I know that as of last week door, dash and caviar had changed those. So if you are food based businesses or restaurants, um, it is worth looking into this and checking and checking in with your third-party apps,
Speaker 2 (00:40:21):
Liz Feldman (00:40:22):
See if they are enforcing this, there’s, uh, a fine for them for every business. They don’t do it for, um, for every day, they don’t do it. So you want to make sure that you check,
Speaker 2 (00:40:33):
Liz Feldman (00:40:35):
See that the numbers have have changed. And they’re trying to keep more money in the,
Speaker 2 (00:40:41):
Um, the pockets of the, the food providers. Uh, and then the, you still have the,
Liz Feldman (00:40:49):
He’s probably the assets or the costs of foods,
Speaker 2 (00:40:52):
Staff, potentially business services. Okay. So
Liz Feldman (00:40:58):
As we move into now, having crossed off a whole bunch of things and looked at what do you still have that you may want to leverage in a different way, or you may want to get better at,
Speaker 2 (00:41:14):
This was one possible
Liz Feldman (00:41:17):
Future plan for this restaurant business,
Speaker 2 (00:41:22):
Right? So, um,
Liz Feldman (00:41:28):
Hanging on the values of the business owners and the mission of the business and
Speaker 2 (00:41:35):
Really the, um, the resources and the strengths, um,
Liz Feldman (00:41:42):
Could look very different for a lot of businesses. And I’ll, I’ll admit that I,
Speaker 2 (00:41:48):
Liz Feldman (00:41:50):
I really had to just focus in on what one business might do versus trying to do this for every business or put all of the ideas that a business that is arrested
Speaker 2 (00:42:00):
Could do. Um,
Liz Feldman (00:42:03):
So we’ll start with the customer segments. So, um, this business realized that lunches really are not the thing.
Speaker 2 (00:42:13):
Um, people are often
Liz Feldman (00:42:14):
Cooking their own meals at lunch. They decided to focus on family dinners,
Speaker 2 (00:42:20):
Liz Feldman (00:42:21):
That could do that, could be takeout or delivery. And then they, since they had been looking at the fact that they had a commercial kitchen,
Speaker 2 (00:42:29):
Um, they basically
Liz Feldman (00:42:30):
Weren’t using their kitchen in the morning anymore. And so they started, they decided they could rent it out, particularly to like some of those. There’s a lot of folks that are trying to start a business during a recession, because this is when innovation happens and people have lost their other revenue streams. So they’re going to rent out their kitchen, usually a couple of days before, uh, various farmer’s markets in the morning and allow other businesses to have the chance,
Speaker 2 (00:43:03):
Um, to make their products.
Liz Feldman (00:43:06):
And this will give them some revenue. So if we go over to the value proposition, it still can be easy and tasty and accessible for family dinners.
Speaker 2 (00:43:19):
Um, it’s still can be, Oh, sorry, wrong way.
Liz Feldman (00:43:23):
So it can be dependable tasty brand that’s memorable for family dinners and the value proposition for the startup food businesses is it’s affordable access to a commercial
Speaker 2 (00:43:33):
Liz Feldman (00:43:35):
Thing that this business decided to do was, um, they had a website before, but now they’re going to spend some of their financial resources to upgrade their website so that people can buy directly from their website. So there aren’t all those, um,
Speaker 2 (00:43:52):
Third party app charges. Um, but since this is
Liz Feldman (00:43:57):
Probably going to go on for a while, they thought it was worthwhile to really invest in their website. They will still use third party apps.
Speaker 2 (00:44:05):
People can still order from their phone. People can still pick up
Liz Feldman (00:44:09):
For customer relationships, you know, they can strengthen what’s on Yelp. They can ask for more reviews, they can continue the referral program. But one of the things they decided to do is start a membership program for family dinners. So families could sign up once a week, let’s say Tuesdays, right? So they might prepay, it could be a system and every Tuesday they get a meal delivered.
Speaker 2 (00:44:35):
Um, and, uh,
Liz Feldman (00:44:39):
So it’s, it’s a new system, so they don’t have to, so families don’t have to think about it, right? Because they were thinking sometimes people don’t want to have to think about what they want. They just want to know it’s going to be good food and they don’t want to cook their meal. So that was a new customer relationship.
Speaker 2 (00:44:56):
Liz Feldman (00:44:57):
As far as the revenue stream, it’s changed a little, they’re only doing takeout and delivery, but now they’re having a membership program as part of their revenue and they have kitchen rental as part of their revenue,
Speaker 2 (00:45:09):
Liz Feldman (00:45:13):
For key resources. So their commercial kitchen is definitely still a key resource. Um, right now they haven’t actually figured out what to do with their dine in space. So they have this space. They’re not really using it. Um, so I, I crossed it off, but it’s, it’s still something because they have it. They could think of, try to think of creative and innovative ways to use that. They still have their trained staff. Although I put an asterix because their training staff are probably working less hours and they still have their brand.
Speaker 2 (00:45:54):
Liz Feldman (00:45:55):
Key activities based still are cooking. They’re still prepping food, mostly in single servings or family servings, not in the larger portions for catering. They’re not doing reservations in their kitchen. They still take orders. But now one of their key activities is managing that kitchen for some of these other startup food businesses, and that’s new skills. Maybe they can have some of their staff learn some of these skills as well.
Speaker 2 (00:46:26):
Well, um, there
Liz Feldman (00:46:28):
Partners, right? So the third party apps door dash, et cetera, still a very key part of their model. And maybe what they’ve realized is one of their key partners is their landlord. Because when this all happened, they went and talked to their landlord, um, about how hard it was, especially at the beginning when sales went way down, um, during COVID and the landlord was actually willing to negotiate with them or have them pay less for X amount of months in a commercial lease, which is really the landlord’s choice. And they’ve realized that that is a key partner for them. And they want to really foster that relationship.
Speaker 2 (00:47:10):
Um, there’s still
Liz Feldman (00:47:10):
Working with their suppliers. They, they probably still have cleaning and, uh, bookkeeping and legal, but their, their cleaning services may be coming less often or have less time when they come since there aren’t customers coming into the space every day. So their cost structure, they still would be spending money on food staff, business services, but now this website upgrade, and maybe they’re putting more money into social media marketing because they’re really trying to reach more people. And, and one of the main ways that everyone who’s working from home is tied to a screen. So that is one possible future plan for this restaurant that was downtown. Um, we, I could have built this out in so many different ways. Um, they could have started canning or, or jarring like sauces. Um, they could start doing cooking videos, they could start. So all of these things we could have put in here, but you can’t do all of them all at once, right?
Liz Feldman (00:48:25):
So this is, this is what this business would have, would have done. Um, they could have started making partially made meals in those to go like, make it home, but it’s already partially made. There’s, there’s a lot of those type of boxes that you prep at home. Um, but it would include their sauce or include some of their ingredients. Um, does anyone have questions or comments about this possible future plan, which it’s also interesting to think of the word pivoting versus adjusting. So often a business pivot really be doing something totally different, um, you know, going from dance to therapy in your business, that is a major pivot, um, versus going from focusing on lunch to focusing on dinner, that’s more of an adjustment. Um, if we’re going to get picky about the words, but either way, um, this tool is really useful, um, whether it’s large changes or small changes.
Liz Feldman (00:49:43):
So, so putting it all together. And I think I have this slide up twice now in a little bit later. So it’s really useful to complete the business model canvas for your core business. Um, I think it’s most useful. So when I say core, um, I really mean like before COVID, um, which depending on your business, um, if it’s seasonal, you’re looking at all of 2019, um, or maybe, right. So whatever that means to you in your business, like what, what were you good at? What was working before COVID? And the reason that that’s useful is then you can really understand your business and you can focus on like what parts you were good at, right to know maybe what you’re going to leverage going forward. And then when you update the business model canvas for, for COVID could be adjustments or pivots, right? So w whatever is, you must change because things around you have changed, um, benefits are making your business more in line with what is actually happening around you and where the needs of your customers are.
Liz Feldman (00:51:07):
Um, making sure that the money that comes in more than covers the money that is going out, um, and it helps you stay focused on the key things you need to change that will be most helpful. So thinking about the process of using the business model canvas, um, I was trying to figure out how to say, like, it’s really useful to look at what you had and then cross out like what you’ve lost, and then look at your strengths and the things you do have to help you figure out what those new opportunities are that you,
Speaker 2 (00:51:50):
Liz Feldman (00:51:51):
Would assess and explore. So just because you make a business model, canvas doesn’t mean that that will be your business model, right? So you might, um, have put in that, uh, you were going to even, even with this kitchen, the last example of the renting out the kitchen, when you actually do some research and you realize what you can charge that feels appropriate and helpful, that it doesn’t cover the costs of the staff and the management of it. And so you might realize, Oh, okay, well that I explored it. That’s not going to be the way that I move forward and that’s really useful. Right. Then you can look at your, your business model canvas again, and try to think about something else, but it helps you just have it all in one place.
Speaker 2 (00:52:49):
Okay. So, um,
Liz Feldman (00:52:54):
Once again, uh, maybe Colleen, if you want to put the PDF of this business model canvas, uh, in the chat box, it’s there for folks. Um, we had talked about, uh, there weren’t that many people, um, people could actually take some time and work on this and ask questions. Um, this is also the type of thing that you can bring this to virtual business, advising and work on this with a business advisor, because if you’ve never worked on this before, sometimes it’s easier to you talk and someone else types. Um, if there’s anyone that’s super excited to try to work through this right now for their business, you are welcome. So this is that review of just how to think through this for yourself. Um, if you want to learn more about the business model canvas. So, um, one of the original books with the business model business model generation by Alexander Osterwalder, and, um, he’s not the only one, but his name always stands out in my mind.
Liz Feldman (00:54:11):
He’s also now written a whole bunch of other books on how to use the business model canvas to strategize, to pivot, to lead. So there, um, he’s coauthored a lot of books using this type of system, but the business model generation book has a lot of pictures. And just ways to think through what you might do pretty quickly, also online, you can Google business model, canvas, and find tons of information. And on YouTube, there is some great videos, um, of people talking through it and applying it to Google, Skype, like a lot of the bigger businesses, but it helps you also just think about, um, like how do some of these other businesses make their money and make a profit? Um, so it could be useful. And strategizer.com is one of the many places, but it’s where I got this particular template for the business model canvas itself.
Liz Feldman (00:55:23):
Um, this session is so there’s tools and resources around strategizing for your business. Um, today we focused on the business model canvas, um, but some other basic tools that can be really helpful around strategy and pivots and adjusting one. These were, um, Emily talked about them last week, uh, the SWAT analysis. So it’s looking at your strengths, weaknesses, opportunities, and threats, um, to help you determine what you want to work on, what you want to get better at what you’re already really good at, how to leverage what you’re really good at, um, as things that are out of your control happen. Um, and then financial projections are also just a wonderful tool to really play out the details of your plans to see how they work. So we will likely be having sessions on all of these things coming up. Uh, and you can also work individually with business advisors on any of these topics.
Speaker 2 (00:56:36):
Liz, we had a quick question before you get into the final slide, um, about, is the business model canvas useful for nonprofits as it is, or are there other considerations, um, changes that needed to be, you know, things to be added or updated to modify it for a nonprofit?
Liz Feldman (00:56:57):
That’s a really great question. Um, so I have not used it for a nonprofit. Um, I have done business plans for both like big, big B big P business plans have written out versions for both for-profit and nonprofit. And in those, most of it is the same, but there are a couple sections that are different. Um, when I think through a nonprofit, I mean, here, let’s just go back to here. So, uh, nonprofits, customer segments may be more about grants, or they could still be individuals. The value proposition, they’ll still be a value to the grantees or the grant or grant grant, grant tours, as well as individuals who might give theirs. You’re still going to think through the channels of how you would reach both the grants and the individuals. You would definitely be thinking about that customer relationship management for individuals and with the money that you you’ve got, the revenue streams would be there right somewhere, somewhere in the individuals, maybe memberships, um, maybe grants, um, the things that you do really well and key resources.
Liz Feldman (00:58:29):
Um, probably one of those things would be grant writing, uh, or finding, finding great grant writers, uh, as well as, uh, speaking your purpose, getting your, your brand across, right? So, I mean, really I’m, I’m going through this, but I think it could be very useful for a nonprofit. Um, I think the other key activity that would be there would be the, the money management, the grant management and communication. And if that wasn’t part of it, then you’d need a partner who was really good at that, because that would be a key, uh, partnership. It’s something that has to happen for a nonprofit, as well as whatever the service or information that you provide is, and then looking at your cost structure. So I could definitely see a nonprofit using, um,
Liz Feldman (00:59:26):
Yeah. Is there a better tool for a nonprofit? I, I’m not sure, but this, I think you could still get a really good glimpse and if you then realize something was missing, you could look at it, but I, I I’d definitely say why not start here. Yeah. Thanks. Thanks for asking the question. Any other questions? No more questions right now in the chat box. Okay. Um, Oh yeah. So, and before I move on, I’m calling, would you be willing to, so I just made a PDF of this PowerPoint, so we can attach that here in the chat box, if anyone would like the PowerPoint from today,