A business model is a description of how a business runs it operations and the value that a business has to offer to one or several segments of customers (Osterwalder & Pigneur, 2010). Having a business plan enables a business to strategically position itself in an attempt to achieve sustainability by preserving what is distinct about it. This means performing different activities from those being performed from rival companies or performing same activities but in a different way. Employees ought to be guided in achieving strategic position of a company rather than compromising it. Focusing on an innovative restaurant that’s based on the senior generation’s food and culture, a business plan is crucial based on the building blocks of the Business Model Canvas where the product differentiation will be on maintaining the heritage passed on from generations.
Customer value proposition offer solutions to customer’s problems by satisfying their needs with value propositions. This should persuade a prospective customer that your service or product would be of greater benefit to them than your competitor’s services (Osterwalder & Pigneur, 2010). A good value proposition will give an edge over rivals and is a way by which prospects measure a company’s brand. For many customers, the first thing they experience when testing your brand is your value proposition. So it’s crucial to have a straightforward, succinct value proposition for any business. For our restaurant business, values will be created in affordable prices, incredible speed of services where the waiting time is reasonable and great customer experience by improving service performance.
Customer segmentation categorizes customers in different groups or people or organization that a business seeks to offer their services or products to. Customers are very significant in any business model and without them no profits can be realized and no business can survive for long. Customer segmentation makes it possible for business advertisers to better target their marketing campaigns to different subsets of audiences (Osterwalder & Pigneur, 2010). In our restaurant business, the targeted markets are customers who love food and are seeking for authentic, and original ancient traditional and cultural food. A restaurant business focuses on tailoring specific products or services of individual customers while providing value and in our case, our customers are those looking for genuine food as compared to conventional options. Targeted customers are families, special event or a regular eating out event. As analytics indicated, our focus shall be on customers who are willing to spending more money on better services and are willing to pay for different aspects of our offers.
The channels building block illustrates how a business communicates to their customers and reaches their customer segmentation to deliver on value propositions. A business interface with customers entails communication, distribution, and sales channels and a customer’s experience is analyzed from their interactions with channels (Osterwalder & Pigneur, 2010). There are various channel phases which we shall apply in our restaurant business which include;
Customer relationship is established and maintained with customer segmentation and to succeed in business, it is extremely essential to treat customers well (Osterwalder & Pigneur, 2010). Customer relationships can be maintained by cost reduction where the customer saves on money and gets quality food. Risk reduction whereby customers don’t incur any risks when consuming our foods and the services provided to them are risk free. By ensuring our foods and services are available to our customers at any time they may need them, ensures that our relationship is maintained and value is created. Allowing our customers to order for food at the comfort of their homes using their mobile phones ensures that we have provided them with convenience thus creating value and making things easier for them. Our aim is mostly to build solid customer relations by providing a unique and cultural taste to our customers different from what other businesses offer in order to maintain long-term relations. Henceforth, customer relationship block is the most important and fundamental block in business canvas, and it differentiate us from other companies.
Above the graph indicates the viral loop. (Word press.) To keep a long term relationship with our customer we will be doing events, for example, special holiday edition food, décor, or event in the store, special discount; we will have loyalty program that customer can get.
Revenue streams building block identify cash earned by a business from each customer segment and the costs must be deducted from revenues to create earnings (Osterwalder & Pigneur, 2010). There are various ways in which revenue can be raised for a business which include auctioneering a percentage of the revenue of a product as a first price and also transforming the ownership interest from an illiquid asset into a liquid asset by permitting the security holder to trade it at a second price (Coleman & Heisler, 2012). This system allows us to raise financial capital for our business from investors without relinquishing any ownership stake in the company itself because it’s only a percentage of the revenue of a product that has been sold to an investor. From our business, a product like baked turkey can be sold and a percentage of revenue generated from its sales will be channeled to the investor.
Another way of raising revenue stream for our business is through the customer referral program and rewarding existing customers thus strengthening attitudinal and behavioral loyalty. The customer referral program is aimed at stimulating positive feedback by word of mouth from the existing clients’ base (Garnefeld, 2013). Our aim as a business will be to use the social connection between our existing clients to attract the noncustomers to our restaurant. This will be achieved by inviting the existing customers to participate in customer referral program and give their recommendation and if such a recommendation leads to acquisition of a new customer, then the existing client is rewarded. This is an efficient and cost-effective means of gaining a new client in our restaurant with profitability and growth of revenue for us.
Key resources building block is used to demonstrate the most important assets that are required for a business model to work. Such resources can be physical, intellectual, human or financial and allow businesses to reach markets, maintain customer’s segmentations, earn revenues and offer value propositions to their customers. Each business model requires a different key resource and in the restaurant business, the focus will be on human resource.
Key partnership describes the relationship between suppliers, vendors, creditors and other partners in a business model who are tasked in ensuring the business is a success. In a restaurant business, buyer-supplier relationship is crucial in delivery of reliable supplies and partnerships can be formed with other existing ventures to form a new business. Partnership is important in reducing risks, providing resources and optimizing business models (Osterwalder & Pigneur, 2010).
Key activities include production relating to designing, making a product with top notch quality. Key activities require knowledge management and training and for our restaurant business, solving customer’s problems and coming up with new solutions will be our main goal. Our business model will focus on networking, service provisioning and promoting our restaurant platform.
Cost structure describes the costs that are incurred in the daily operations of a business. This building block is very crucial for our restaurant business because our main focus will be on delivering high degree of personalized services to our customers by creating a value-driven business model (Osterwalder & Pigneur, 2010). Using economies of scope, we would ensure we cover a wide area of delivering food and our marketing activities and distribution channels to support various types of food products.