Are you familiar with Business Model Canvas (BMC), BossQ? If you want to make your MSMEs successful and able to develop, you definitely don't want to miss out on this.

Business Model Canvas is a framework that discusses business models in visual form in the form of a painting canvas, so that they can be understood and understood easily. This is a tool in business management strategy to explain concepts, consumers, infrastructure, target customers and company finances more clearly. Usually, this strategy is used by novice business actors in order to produce a mature business strategy. Previously, MSME players had not used this strategy too much, but with better access to information and increasingly fierce competition in the market, it is not surprising that MSMEs also need to use this strategy.

Reviewed by Liputan 6, recently Pertamina held Business Model Canvas training for 117 Micro, Small and Medium Enterprises (MSMEs) from various regions in Indonesia. Why is the Business Model Canvas important? According to a resource person from this training, MSMEs can use the Business Model Canvas to survive, because it can enable MSMEs to capture potential business opportunities that can be taken. Another training for Indonesian MSMEs which was reviewed in Warta Depok emphasized that the main reason why it is important to teach the Business Model Canvas further is because MSMEs need to improve their business strategy and competitiveness, so that they can later enter the market global.

Can this Business Model Canvas strategy only be done once before starting a business? A study by Anggraini (2020) was able to analyze a local MSME selling typical Baturaja food using the Business Model Canvas, and then found existing advantages and disadvantages as well as creating several new strategies that could improve the business. Another case study in the 2018 Binus Bangun Desa (BBD) Program also analyzed a local MSME silver craftsman using the Business Model Canvas. Through this concept, researchers can see the enormous potential and resources that business actors have, as well as the next steps needed to be able to develop their business further.

So, whether we are planning to start a business or are currently running it, the Business Model Canvas concept can really help design and evaluate the strategies used in the business, so that every choice and step taken can have a maximum positive impact on the business.

Business Model Canvas Elements to Guide Business Strategy Formation

Source: RevGenApps

In its application, the Business Model Canvas has 9 elements that need to be considered. A lot huh? Don't worry, in fact, this element is already familiar to us as MSME players on a daily basis, only made clearer so that we can implement the right strategy to manage every aspect of the business more optimally.

Value Benefits (Value Proposition)

Of course, when starting a business, we determine what our product is superior to, right? What we offer needs to have benefits for the target market segment, but also have differentiating power. This strategy needs to be determined and written clearly in the Business Model Canvas, so that customers can feel interested in the product and at the same time be motivated to choose and use it. These advantages can be very diverse. It could be that our product has never existed before, or offers a competitive price and is more efficient. It could be that our products bring comfort and convenience to customers. It is also possible that this product can be modified according to the needs of each customer, providing artistic value beyond just its function, or even providing a better social status for its users. Ask yourself, what are the advantages and disadvantages of our MSME products compared to existing competitors?

Market Segments (Customer Segments)

In running an MSME, it is very important to determine the market segment that will be the target. Business actors need to clearly recognize consumers and their characteristics and needs, so that the products they offer can be presented to the right people and become a solution for them. Every form of food, daily necessities or clothing business certainly has a certain market group that they target. Is the target market teenagers, young middle class families, or perhaps a specific group of food enthusiasts? There are several market segment categories that can make it easier for you to determine the appropriate ones based on priorities before writing them into the Business Model Canvas, namely:

  • Mass Market: broad market segment with the same types of needs and problems.

  • Niche Market: a specific market segment.

  • Segmented: market segments that have different needs but within one category.

  • Diversified: market segments that have very different needs or problems.

  • Multi-sided Platform: serves two or more interdependent market segments.

Customer Relationship (Customer Relationship)

What makes customers come back to buy our products repeatedly? Quality product? Of course, but the element that plays a role is the relationship established with customers. Yes, large businesses and MSMEs need to think about this carefully. After all, our efforts exist to meet customer needs. The right strategy is needed in determining interactions and maintaining customer loyalty so that they do not turn to other business actors. There are various communication strategies that can be used: it can be transactional or buy-in, it can maintain long-term relationships with customers, it can create a customer community, it can be served by friendly sales representatives, or even provide promotions or discounts to customers.

Main Business Activities (Key Activities)

This element of the Business Model Canvas refers to all activities related to business productivity related to a product, so that a product with a specified benefit value (value proposition) can be created and present on the market. This means that the main business activities are mandatory activities in the business, such as product design, production and processing processes, business operations, delivery of goods, etc.

Sources of Business Income (Revenue Streams)

One of the main goals of a business is to make a profit, right? The source of business income from customer transactions is clearly the most important part. Without this, MSMEs will not be able to survive, let alone develop and generate profits. Therefore, this element must be managed as optimally as possible, especially by utilizing every resource optimally in order to increase business income. In essence, this element is a business actor's strategy to make money depending on each activity and thing offered through the business, for example product sales, service sales, subscription fees, or even loan fees.

Channels (Channels)

Channels (channels) are a way for us as business actors to reach the market and deliver products on target. With the right channels, we can convey the value of the benefits of MSME products offered to the target market segment. This Business Model Canvas element is also very important and is not only limited to product distribution, but also every process that plays a role in the meeting between our business and customers. Will we sell products in stores directly, use social media and e-commerce, or leave products in partner stores? What is our strategy to make the market aware of our product? What methods can customers use to make purchases? How do we help customers evaluate the products they use and support other needs after the transaction?

Resources (Key Resources)

Every product we produce comes from basic materials or resources. In an effort to create products that are valuable, useful and attractive in the eyes of the market, we need to plan every type of resource needed, starting from raw materials, human resources, to business operational processes. This element is important to support the main activities in the business so that business products can be realized as expected. Some asset categories related to this are:

  • Physical Assets: factory facilities, buildings, land, vehicles, or equipment.

  • Intellectual Assets: brand, patents, copyrights, confidential company information.

  • Human Assets: workforce.

  • Financial Assets: business cash, credit, bonds or business shares.

Collaboration (Key Partnership)

Collaboration shows which partners will support our business so that we can compete and carry out business activities effectively. The goals can be various, it can be to reduce risks in competition in the market, or to seek resources and carry out business activities more optimally. The forms of cooperation can also vary, for example cooperation limited to buyers and sellers, with businesses that are not similar, or also cooperation to form a new business. For example, we work with suppliers of raw materials for production needs or shop owners for similar goods that are larger. In essence, good relationships with various parties are always useful for creating smooth business processes that meet expectations.

Cost Structure (Cost Structure)

There is income, there are also costs that must be incurred. This cost structure is a breakdown of the factors that play a role in forming costs to support business activities. Usually, elements of the Business Model Canvas include things such as raw material costs, marketing costs, production costs, packaging and distribution costs, and employee salaries. When business finances and financing are managed with a good strategy, the business can run more economically, efficiently, and even with minimal risk of loss. The cost structure of one MSME and another is not necessarily the same, because there are businesses that are cost-driven or sensitive to the price of raw materials, but there are also those that are value-driven, or don't think too much about the price of production/raw materials because what is being sold is value/art/status/lifestyle. Usually, the categories contained in this business cost structure include:

  • Fixed Cost: fixed costs that arise that do not depend on the amount of production.

  • Variable Cost: costs that vary according to the quantity produced.

In this last element, of course proper financial reports are needed to be able to calculate the required costs accurately. With the presence of current technology, we can easily do this using various applications, one of which is point of sales Qasir. In just one application, we can record sales, manage products, monitor stock, and even monitor transaction reports that occur in the business. Not only is it practical, but it's also free! Interested in trying this Qasir feature? Just download via your Android device here.

The most useful knowledge is knowledge that is not only understood, but also tried and applied. Now, because we understand more about strategy and key elements in business, we can use the existing Business Model Canvas table as material for business preparation and evaluation. Come on, together make our MSMEs stronger and able to compete!

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