How to innovate your business (the easy way)
The Greater Philadelphia Hispanic Chamber of Commerce hosted a workshop on the Business Model Canvas, a tool that helps entrepreneurs foster new ideas.
Innovating your business doesn’t have to be rocket science. In fact, all you need is a single sheet of paper.
That was the message delivered to attendees at the latest master class from the Greater Philadelphia Hispanic Chamber of Commerce (GPHCC). The program, which was held on Tuesday, focused on ways you can innovate your business using the Business Model Canvas, a simple concept that challenges the notion that business plans must be in-depth, long-term and complex.
“It’s a one-pager that essentially captures all of the key details about a business,” explained Michelle Histand, the leader of the workshop.
Histand teaches creativity and organizational innovation at the Fox School of Business, specializing in helping students develop new ideas and realize their creative potential. She is also the Director of Innovation for Independence Blue Cross.
The Business Model Canvas breaks down what your business does into nine categories, designed to fit into boxes on a single page. Each category presents you with a different question associated with your market and/or your product/service:
1) Value Proposition: What do you do?
2) Customer Segments: Who do you do it for?
3) Customer Relationships: How do you interact with customers?
4) Channels: How do you reach them?
5) Revenue Streams: How do you make money?
6) Key Partners: Who will help you?
7) Key Activities: How will you do it?
8) Key Resources: What do you need?
9) Cost Structure: How much will you spend?
To illustrate how the Business Model Canvas can be used as a tool for innovation, Histand first led attendees in breaking down the business plan of a taxi business. Then, the group analyzed the cab industry's young, competitive cousin — Uber. By comparing the taxi company with its innovative offshoot, the exercise showed how the Business Model Canvas can create new ideas by allowing you to tweak aspects of your plan, giving you the freedom to brainstorm and experiment.
What do you do? You provide convenient and available transportation by hiring drivers.
Who do you do it for? Business people, tourists, short-distance commuters, non-drivers, drunk people, etc.
How do you interact with customers? In a transactional, impersonal way (generally).
How do you reach customers? By phone, taxi stands, hail from the street.
How do you make money? The meter: flat fee plus distance.
Who will help you? You form relationships with hotels, airports, repair shops, car dealerships, tourism bureau, etc.
How will you do it? You pick up clients, market yourself, maintain your vehicles.
What do you need? Gas, drivers, cars, dispatchers, booking system, licensing, insurance, repairs.
How much will it cost? Add it up.
What do you do? You provide convenient and available transportation by hiring civilian drivers. You accomplish this without cash transactions, allowing customers to order from their smartphones and track the status of their drivers.
Who do you do it for? People with smartphones: professionals, tourists, short-distance commuters, non-drivers, drunk people, etc.
How do you interact with customers? In a friendly way, establishing a human connection (generally). Give drivers and customers the ability to rate each other, and allow customers to see who is picking them up beforehand.
How do you reach customers? Smartphone app. Offer promotions using social media. Allow drivers and customers to refer each other for incentives and discounts.
How do you make money? Flat fee plus distance, but allow customers to see the cost of a ride beforehand.
Who will help you? Partner with civilian drivers, hiring them as independent contractors to keep costs low. Find promotional partners: stores, restaurants, charities, etc. Make arrangements with large social events like concerts and conventions.
How will you do it? Hire drivers, market yourself, find way to determine peak times for surge pricing.
What do you need? Develop and maintain the smartphone app.
How much will it cost? Add it up.
Reworking one small detail of your business plan can potentially lead to groundbreaking new ideas, and the Business Model Canvas provides entrepreneurs a flexible platform to foster that kind of innovation.