Defining a clear online business model is essential for a new startup online business to help create a sustainable business and communicate the features of their new business to partners and within the company.
Reviewing business models is also important for existing businesses thinking about options to refine their business model or add new services to their offerings in the light of new opportunities made possible by the Internet.
We’re big fans of simple frameworks to help communicate strategy at SmartInsights.com and we love the Business Model Canvas which is a valuable framework for summarizing strategy for online businesses. It was published as part of a co-creation creative commons project involving 470 practitioners from 45 countries. We feature it as part of our digital toolkit where we give an example in our online startup business model template. It’s also available as an app and downloadable templates on the Business Model Generation site. Of course, it can be used for all business models, but it is particularly suitable for online startups.
The business model canvas is also a valuable framework for summarizing strategy for online businesses for students, so it now features in my Digital business and Ecommerce Management and Digital Marketing books – to help spread the word! The main sections of the canvas in a logical order to consider them are:
As Guy Redmond pointed out in the comments, the day I published this, the Harvard Business review published A Better Way to Think About Your Business Model by Alexander Osterwalder, one of the lead authors.
It’s a great framework, but I always like to think what the missing elements of frameworks are since the summary can be misleading otherwise. The Business Model canvas is arguably missing a method of specifying Key Performance Indicators for evaluating the performance of the business model. I recommend adding these to the relevant sections, in particular for Revenue stream, cost structure, and key activities. It also doesn’t directly consider the impact of different forms of competitors. To help here, it’s also useful to think through how the canvas would look for successful companies already active in this market.
At Smart Insights, we’re big fans of one-page plan summaries for rapid discussion and explanation of strategies. We’re also big fans of PR Smiths SOSTAC® Planning framework defining a process for creating a marketing plan (See PR Smith’s site for more details (www.prsmith.org) or read my summary guide to using SOSTAC(R) for marketing plans.
Smart Insights Premium members can use our blank Word template and B2C example of a one page summary in this template. This simply takes each part of SOSTAC® and then you overlay specific digital marketing opportunities and challenges across each part of the Smart Insights RACE planning framework – by marketing them up with RACE (plus B, G, R, D for Branding, Governance, Resourcing, Data issues).
[Article and template originally created May 2013]