With so many businesses temporarily closing and others experiencing dramatic declines in sales, many entrepreneurs are asking themselves the same question: ‘What should I work on now that my business is on pause?’
Yes, the pandemic has thrown businesses of all sizes into a turbulent atmosphere. However, this downtime might be an opportunity to focus your attention on some of the foundational elements of your business that are often overlooked, especially when operations are busy. The Lean Canvas is a useful tool that allows you to deconstruct your business model and critically analyze each component. Designed by Ash Maurya, the Lean Canvas takes all the ideas that go into creating a business plan and distills them down to a single page. The eight elements of the Lean Canvas are:
1. What is the problem you’re trying to solve?
2. What is your solution to that problem?
3. What is your unique value proposition?
4. Who are your customers?
5. What channels will you use to reach your customers?
6. What are your sources of revenue?
7. What is your cost structure?
8. What unfair advantage does your business have?
When starting out, founders should be able to answer all these questions and back up their thinking with data. Filling out a Lean Canvas forces you to question the key assumptions underlying your business model, resulting in a robust model built on validated hypotheses.
Although the Lean Canvas was designed for early-stage founders, entrepreneurs who have been in business for years can also benefit from reexamining their business models. Why? Nothing stays stagnant. Things evolve over time, and your business must evolve in order to stay current. Maybe the communication channels you were originally using to reach your customers no longer speak to people, or maybe a popular new channel has emerged since you first developed your business model. Maybe your customer segments have grown or evolved. Or maybe the external environment has changed (ahem, pandemic!) and you need to modify your service delivery, products, or another core business element. Understanding these changes and adapting can mean the difference between success and failure, which is why many experienced entrepreneurs evaluate their business models annually (or even more frequently).
Even if sales have slowed to a crawl, or if you’ve delayed your business launch date, try to make the most of this time and put some effort into closely examining your business model and testing your key assumptions. Want to learn more about filling out your own Lean Canvas? Your SA Entrepreneurship team members (Laura and Tania) are here to answer your questions and guide you along the way. We even have an online startup training platform we can share with you to walk you through the process. Reach out to us to request access!