Question: What is the best way that I can learn about both the business and personal elements of an entrepreneurial start-up venture?
Answer: A good way to do this is to explore the business and personal model canvas for each model simultaneously. I have prepared a side by side comparison below
THE BUSINESS AND PERSONAL MODEL CANVAS COMPARED
Please follow the 4 step comparison below:
STEP 1-THE BUSINESS AND PERSONAL VALUE PROPOSITIONS
Business Model Value Proposition
What: We strive to create an understanding of customer needs through experimentation with product and service design that will enable us to provide viable solutions to the identified needs of our customers.
How: To do this we recruit and train engineering and production talent that can translate needs into viable products and services.
Personal Model Value Proposition
What: We provide value through innovation that enhances the customer experience through dedicated and empowered staff engaged in continuous personal and professional improvement.
How: To do this we encourage individual growth and training opportunities to build personal and professional competence through innovation and the commitment to the imperative of not only meeting but exceeding customer expectations.
STEP 2-THE ACTIVITIES, PARTNERS AND RESOURCES AND DELIVERY OF THE VALUE PROPOSITIONS
Business Model Activities, Partners and Resources
What: We need to undertake activities that help build our business, engage the help of partners and provide useful deployment of our resources.
How: To do this we assemble teams for financial, marketing, administrative and production expertise, engage the help of partners who provide assistance to us by way of advice, credit, information and other valued assistance while we plan for the effective deployment of our resources.
Personal Model Activities, Partners and Resources
What: We strive to create a culture of commitment to excellence in all our staff through continuous learning and growth via personal competence and organizational growth.
How: We do this through activities that enable personal development through ongoing training and providing opportunities for growth while encouraging the development of partnerships with an emphasis on personal development and providing the necessary resources for our people to learn and grow in their professional and personal lives.
STEP 3-THE CUSTOMER RELATIONSHIPS, MARKET SEGMENTS AND CHANNELS USED TO DELIVER BOTH THE BUSINESS & THE PERSONAL VALUE PROPOSITIONS
The Business Model Relationships, Segments and Channels
What: We strive to build Business Relationships that are built upon mutual benefits derived from attention devoted to certain market segments reached via channels that enable constant communication
How: We build ongoing relationships through seeking out and attending to the needs of our customers, particularly those customers whose market segment most nearly matches their needs with our capabilities. We utilize channels preferred by our customers and provide our value propositions through effective practice in those avenues of service.
The Personal Model Relationships, Segments, and Channels
What We strive to build both personal and business relationships that endure periodic stress and seek additional outlets for our services in differing market segments. We not only utilize existing channels of distribution and procurement but also seek to visualize and create new channels.
How: Through training and development we seek ever-increasing opportunities for the creation, development and maintenance of ongoing personal and business relationships that provide mutually valued benefits. We seek not only to expand our participation in any given market segment but to expand our personal and business reach into additional segments. We utilize channels not just for distribution and procurement but also to promote our business and personal missions.
STEP 4-COSTS AND REVENUE IN DELIVERING THE BUSINESS AND PERSONAL VALUE PROPOSITIONS
The Business Model Costs and Revenues
What: Costs are incurred as a business is set up and operated. Costs are considered as fixed or variable, the fixed component being overhead and other non variable expenses such as rent, utilities, office salaries and insurance. Variable costs are those incurred from production operations, normally consisting of labor and overhead. Management’s job in a profit seeking business is to minimize costs while increasing revenue
Revenue is normally earned through the sale and distribution of products and services. Revenue must exceed costs if the business is to be profitable. It is management’s job to build revenue while reducing costs.
How: Cost reduction is created through attention to all outgoing funds, both direct costs and indirect costs. Direct costs are reduced via increased productivity. Indirect costs are reduced through careful administration of overhead expenditures.
The Personal Model Costs and Revenues
What: We strive to limit both Personal costs in both their financial and non financial elements. The non financial are numerous, such as opportunity costs as well as the costs of organizational citizenship. They could also include the personal costs of de motivation due to a toxic organizational culture. Revenues are both financial and psychological in that financial revenues may be easily measured while psychological revenues may need to be measured as cost/benefit ratios. Management’s job is to increase both financial and non financial revenue while reducing financial and non financial costs.
How: Personal financial costs can include the original (and perhaps) ongoing investments that an owner makes in a business venture. But personal financial costs may have non financial elements such as stress and regret. Personal psychological costs must part of the calculus of total costs and addressed as a critical function of business operations. In the calculus of revenues received the financial are easily to measure but the personal side of revenue is equally important. Job Satisfaction, a commitment to the organization and self simultaneously, and constant enhancement of non financial benefits (psychological revenues) must be a regular task of management.
In this short paper we explored both the business and personal side of the development of a model to guide the initial structure, operating environment and financial impact of both. This work is based the consulting and entrepreneurial experience of the author and two books which are:
Business Model Generation by Alexander Osterwalder and Yves Pigneur
Business Model You by Tim Clark