Market

Adding missing elements to the Business Model Canvas

Although the Business Model Canvas is a very useful tool for business modeling, it misses some crucial elements on meso and macro level, absolutely essential for your business plan:
  • you need to know your market, size, growth, trends and attractiveness
  • you need to know more about your customers especially with regards to buying reasons and trends in preferences
  • you need to know your competitors, in fact you should create a business model canvas for each of your competitors
  • you should think about alternatives. Doing nothing is usually the most relevant alternative but there are others and innovation creates new alternatives. If you don't think about alternatives, your competitors will and they might put you out of business
  • you need to look at the macro environment (DESTEP) to find threats and opportunities for you business and understand trends in you industry so you can keep ahead of the flock

Market Size and Market Share

Establishing market definition and market size is never easy. The information you need is hardly ever available. You need to be a Sherlock Holmes to do it right. Below you find some instructional videos that might be helpful, for the rest you need to use you imagination. It always starts with the definition of your market. For the financial paragraph in your business plan you need to figure out market attractiveness:
  • Market definition
  • Market size
  • Market growth
  • Market share of the main players in the market
  • Seasonal fluctuations
  • Average gross margin made in your market (this is an indication of barriers to entry, power of suppliers and customers and level of competition)