Pricing mechanisms come in two principal forms: fixed and dynamic. Fixed pricing has predefined prices based on a static set of variables while dynamic pricing changes prices based on market conditions. Price mechanisms can affect both your revenue stream as well as your costs.
Many things have changed when it comes to business planning and the Business Model Canvas has emerged as a valuable tool especially for startup businesses. In this video, we discuss what has changed and why the business model canvas is something that businesses need to embrace as part of their business planning.
The Business Model Canvas Is A Great Tool to Discover Uncontested Markets for A New Product or Service.
How a crisis like the COVID-19 pandemic evolves will change from crisis to crisis, however, the five crisis stages of Resolve, Resilience, Return, Reimagination, and Reform will provide business owners a clearer path to navigate to the next normal.
When considering key partners, you must consider the following questions:
- Who are your key partners and who are your suppliers?
- Which key resources are you acquiring from key partners and suppliers?
- What key activities do your key partners and suppliers perform?
The ultimate goal when defining your key activities as part of your Business Model Canvas exercise, is to help you discover what activities you need to address in order to differentiate your product or service from your competition.
A company's key resources allow it to create and deliver its value proposition, reach its target market and maintain a quality customer relationship with them so that the business can earn revenue. For a company to produce a product or service, it needs access to physical resources, intellectual resources, human resources, and financial resources.
A company's cost structures represent the specific costs that the business will incur while operating under a particular business model. Through understanding the key resource, key activities, and its key partners, the business can determine its available cost structures. By choosing to be either Cost Driven or Value Driven and properly using Operating Leverage, the business can find its optimal cost structure.
When it comes to defining your revenue streams, especially when you are developing a business model canvas, there are many factors that you need to consider that affect your potential income source. Will you use a fixed or dynamic pricing mechanism, and is your revenue based on transactional and reoccurring sources of revenue?
One of the advantages of a small business is their ability to change direction quicker than larger corporations. Moreover, the rate of business change continues to accelerate which has given small business a leg up on larger corporations. However far too many small businesses continue to rely on business principles defined long ago when the rate of change was much slower. In this video discover that has changed and what you can do as a small business to be more responsive to change.