Description:

In this lesson, students will begin developing a business model for the business they selected in Lesson 1- Getting Started. Entrepreneurs are successful when they have a plan for achieving their goals. That plan will almost always change and evolve, but it is important that you start with a plan. This lesson starts with an introduction to the concept of a business model and then students will learn how to visually map their business model using the Young Entrepreneur’s Business Model Canvas. The canvas framework is a great tool that enables lean startups to quickly design, discuss, and improve a business model.

 

Time Required:

45 min

 

Required Materials:

Internet connection, writing instrument, poster board, sticky notes, markers 

 

Prerequisites:

Lesson 8.1 – Getting Started

8.2.A – Review the following introduction to the concept of a business model [10 min]:

Activity:  Business Model Basics

A business model describes your business idea and provides an overall description of how your business functions. It is a high-level, easy to understand plan for your business. The business model should focus on the ways your business will create value. The business model will answer such questions as:

  • How will you create value for your customers?
  • How will you reach your customers?
  • How much will your product or service cost?
  • How much money do you plan to make?
  • What resources will you need to start your business?

A business model does not have to be overly detailed, but entrepreneurs should still outline their business goals and their plans for achieving those goals.

Successful entrepreneurs do three key things:

  1. Discover Opportunity – Entrepreneurs identify an unmet need or discover an opportunity to improve on the delivery an existing product or service. 
  2. Understand the Challenge – Once an opportunity has been discovered, entrepreneurs seek to understand the challenge of what it will take to capitalize on this opportunity.  The need to understand how their solution will create value for people and what resources they need to deliver their solution.
  3. Create Value – Entrepreneurs put their ideas into action and deliver value to their customers.

 

Entrepreneurs Discover Opportunity. They Understand the Challenge. They Create Value.

As you think through your business ideas as yourself: How DO U Create Value?

In the next part of this lesson, students will learn to visualize and map their business model using a tool called the business model canvas. A business model canvas allows you to quickly design, discuss, and improve your business model.

 

8.2.B – Watch and discuss the following video using the questions below to guide your discussion [10 min]:

Video:(Strategyzer, 2:19 min)

“A 2 minute overview of the Business Model Canvas, a tool for visionaries, game changers, and challengers. This method from the bestselling management book Business Model Generation is applied in leading organizations and start-ups worldwide.”

Teacher Tip: It may be helpful to write each of the nine building blocks on the board to facilitate class discussion.


Discussion Questions: Business Model Canvas Explained

1.  As discussed in the video, what are the 9 basic building blocks commonly used to describe a business model?

  1. Value Proposition(s): The explanation of how your business provides value in ways that distinguish your business from your competitors. Every section of your business model should relate back to your value proposition.
  2. Key Activities: The most important business activities required to create value and deliver your value proposition.
  3. Key Resources: The physical, financial, and human resources that are necessary to create value for your customer and operate your business.
  4. Partner Network: The relationships you develop and the strategic alliances you cultivate to optimize your business.
  5. Customer Segments: The customers you serve and the different needs your business addresses.
  6. Channels: The channels you reach your customer to deliver your value proposition.
  7. Customer Relationships: They type of relationship your business creates with your customer.
  8. Cost Structure: The costs of operating your business.
  9. Revenue Streams: The money you make from each customer segment.

 

2.  Why is the business model canvas a useful tool for creating your business model?

  1. The business model canvas is a tool that allows you to map out your entire business model in one image. This allows entrepreneurs to quickly describe and discuss their business.
  2. The business model canvas is also a useful tool for helping to invent new business models quickly.

8.2.C – Watch and discuss the following video using the questions below to guide your discussion [25 min]:

Activity:  Young Entrepreneur’s Business Model Canvas

Business theorist, Alexander Osterwalder, developed a business model canvas based on the 9 building blocks introduced in 8.2.B during the video titled.

Teacher Tip: For an interactive classroom activity, provide students with poster board, makers, and sticky notes.  Instruct students to create the outline of the business model canvas below. Students then can use the sticky notes to describe key aspects of their business, making changes quickly as they expand on their initial ideas.


Below is a simplified version of the business model canvas in a layout that enables young entrepreneurs to outline and summarize the key elements of their business.

Think deeply and creatively to answer the questions below for each section below. Each section of the business model canvas only needs a few words to describe the key aspects of your business.

8.2.D – Self-Study: Over the next few days, continue to revise your business model. Discuss drafts of your business model canvas with your parents, friends, and mentors. Students will present their business model canvas to the group as part of Lesson 5 for this module.

Teacher Tip: Instruct the students to spend time over the next few days developing their business model. They should discuss drafts of their model with parents, friends, and mentors. Students will present their business model canvas to the group as part of Lesson 5 for this module.

Lesson Recap

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  • Building a business is not easy, but success is possible if you take it one step at a time.

 

  • The Youth Entrepreneur’s Business Model Canvas is a simplified tool that allows you to map out your entire business model in one image. This allows entrepreneurs to quickly describe and discuss their business.

 

  • The business model canvas is also a useful tool for helping to invent new business models quickly.

 

  • Every section of your business model should relate back to your value proposition. How are your creating value?

 

  • Successful entrepreneurs Discover Opportunity. They Understand the Challenge. They Create Value. As you think through your business ideas as yourself: How DO U Create Value?

 

Additional Resources

Video:(Kauffman Foundation, 3:35 mins)

“Giles Shih, President and CEO of BioResource International, talks about his company’s origins including founding along with his father. Giles also advises entrepreneurs to get out there and learn as you go.”

 

Video:(Ash Maurya, 22:29 mins)

“If you are spending more than 20 minutes on your initial business model canvas, you are doing it wrong. This video will show you how to capture your core business model assumptions on a Lean Canvas in just 20 minutes.”

Last modified: Monday, October 19, 2020, 12:50 PM