How to Build a Business Model using Canvas

One of the most rewarding experiences in business school is actually learning to use business creation tools like Canvas.  It goes hand in hand with the class textbook Business Model Generation, which I highly recommend to anyone who wants to learn about creating business models in a very methodical way.  The business model discussed in this post is the basic one we are using for Ashlee Lynn Designs, or rather our startup sign business.  We started the business almost 2 years ago now, first using free pallet wood and some weird “use an inkjet printer on wax paper to transfer texts and images to wood” tricks…it did not work if you were wondering.  However, after a few tries we worked out all of the kinks in our sign making operation and now we can make a sign out of any type of wood, rough or smooth in texture.

The video below shows the Canvas explained.

Our model is a simple one, we provide 2 different products, hand made wood signs and hand made pillows, both with various sayings.  Since starting the business a business model has never been generated to understand the full potential of our startup.  Last semester I took Operations Management and we had to create a process improvement paper (see below) for a process at our current job or another of our choosing, I choose to improve the process of making signs.  The Business Model Canvas takes that a step further by analyzing the steps needed to see the full picture of the business.

You are supposed to start with the customer segments and define the segments in which you have customers, for us that would be divided into groups like home decor, wedding presents or anniversary presents, but I found that to be a little bit of a broad topic, so I broke it down to several products we make and estimates of general numbers if we were to produce signs and pillows full time.  The rest of the canvas model was configured as the book and video demonstrates.

Taking a break from this project allowed me to develop some ideas about the market share problem.  I researched the market share of the home decor industry, which we would fit into more so than the sign manufacturing industry due to the type of products we make.  Using IBISWorld.com I was able to find information about the total market revenue, $52.4B and share of that market for home decor items, 15.1%.

 

 

 

We have a share of that market in the 200 products sold range per year, assuming we would be doing this more than part time but n full time.  Our percent of the $52.4B is a mere 0.000101%, giving us a revenue generation of $8,000.  Our costs total $2689, leaving $5311 for profit.  Manpower has not been taken out of the profit.  All numbers are based on selling 200 items with an average sales price of $40 per item.

Process Improvement Paper

How to Build a Business Model using Canvas