Your Personal Business Model has tremendous Value to offer. If only you could reach the Customers who need it, YOU would be rolling in cash flow. Business Model Channels are there to create access to prospects as well as deliver Value to Customers.
In developing the Business Model using the Business Model YOU guidelines, a lot of effort is placed on defining personal Key Resources. This same thinking naturally extends to placing similar effort into personal Key Activities and Key Partners. A useful approach is to now take this understanding and use that to develop more Business Model Channels.
Business Model Channels fundamentals
A "rookie" mistake made by those new to the Business Model canvas is to use the Channels and Customer Relationships they desire. Those working with Personal Business Models are especially suseptable because they have just spent considerable time exploring who they are and what they might become. This makes us a bit introspective. Canvas Channels and Customer Relationships should correctly be those the Customer Segments desire, not you. Consider how YOU want to be contacted in your business relationships as a starting point. From there, start to consider how your potential Customers might feel. How would they like to be prospected? It's never out of place to ask your Customers for feedback to be sure you're getting this critical area correct.
A second mistake is to not realize that these are plural terms. We are really looking for the best mix of Business Model Channels, not trying to find the best one.
Types of Business Model Channels
Business Model Generation classifies Channels as Owned and Partnered. For example, you can do your own selling, or pay a commission to a Key Partner to do it for you. This is an elegant way to look at someone else's business model Channels.
For your own model, I would like to offer an alternative approach as well. Your Channels frequently directly relate to your Key Resources, Key Activities, and Key Partners. In the example, your own selling is a Key Activity and the commission sales a contribution of a Key Partner.
This gives us 3 sources of Personal Business Model Channels - Resource Channels, Activity Channels, and Partner Channels.
Key Resource Channels
These are by far the most desirable (and generally most costly) Channels for a Personal Business model. I see that all the time as a business broker. Entrepreneurs frequently contact us to purchase an established business in order to own more Channels. Examples of Key Resource Channels are an established reputation or brand, a popular location, satisfied past customers, internet pages with high page authority, and a sales force in place. You can "own" these Channels, so they are easier to manage and keep healthy.
Key Activity Channels
The opposite of Key Resource Channels are Key Activity Channels. These are typically the least costly because they tend to be "do it yourself selling". Examples are types of Direct Selling which include mail (and email) campaigns, personal and telephone cold calling, and internet blogging. There are also Indirect selling approaches which include networking organizations, public speaking, publishing, workshops, and events. They may be low cost to initiate; however, these are the Channels that also do not scale well (or sell very well when it comes time to exit your model). There is a commonly held belief that any new career must start here and over time develop Key Resources. All it takes is courage. While courage is essential, if customers are not willing to pay more than cost for your value as you present it, courage only leads to financial losses. You will frequently find this misleading message embedded in career and business development advice.
Key Partner Channels
A practical alternative strategy is to work together with Key Partners. These Channels can be both cost effective and scalable; however, they will require you be a good Key Partner in return. Key Partner Channels can be VARS, Distributors, Retailers, Professional Referral partners, even Customers who are now "fans" and enjoy being able to recommend you to their contacts. Actively looking to promote Key Partner relationships into Key Partner Channels may launch a new Personal Business Model more easily than a Customer Discovery/Validation process.
Finding Your Channel mix
Your model is based on a mix of Resources, Activities, and Partners (RAP). The development of a corresponding mix of Channels from them should feel natural, even inviting. If it doesn't, the problem may be your RAP is insufficient for the model's Value Proposition or Customer Segments and needs to be adjusted. In the end, a good business model should just make good sense.
In developing the Business Model using the Business Model YOU guidelines, a lot of effort is placed on defining personal Key Resources. This same thinking naturally extends to placing similar effort into personal Key Activities and Key Partners. A useful approach is to now take this understanding and use that to develop more Business Model Channels.
Business Model Channels fundamentals
A "rookie" mistake made by those new to the Business Model canvas is to use the Channels and Customer Relationships they desire. Those working with Personal Business Models are especially suseptable because they have just spent considerable time exploring who they are and what they might become. This makes us a bit introspective. Canvas Channels and Customer Relationships should correctly be those the Customer Segments desire, not you. Consider how YOU want to be contacted in your business relationships as a starting point. From there, start to consider how your potential Customers might feel. How would they like to be prospected? It's never out of place to ask your Customers for feedback to be sure you're getting this critical area correct.
A second mistake is to not realize that these are plural terms. We are really looking for the best mix of Business Model Channels, not trying to find the best one.
Types of Business Model Channels
Business Model Generation classifies Channels as Owned and Partnered. For example, you can do your own selling, or pay a commission to a Key Partner to do it for you. This is an elegant way to look at someone else's business model Channels.
For your own model, I would like to offer an alternative approach as well. Your Channels frequently directly relate to your Key Resources, Key Activities, and Key Partners. In the example, your own selling is a Key Activity and the commission sales a contribution of a Key Partner.
This gives us 3 sources of Personal Business Model Channels - Resource Channels, Activity Channels, and Partner Channels.
Key Resource Channels
These are by far the most desirable (and generally most costly) Channels for a Personal Business model. I see that all the time as a business broker. Entrepreneurs frequently contact us to purchase an established business in order to own more Channels. Examples of Key Resource Channels are an established reputation or brand, a popular location, satisfied past customers, internet pages with high page authority, and a sales force in place. You can "own" these Channels, so they are easier to manage and keep healthy.
Key Activity Channels
The opposite of Key Resource Channels are Key Activity Channels. These are typically the least costly because they tend to be "do it yourself selling". Examples are types of Direct Selling which include mail (and email) campaigns, personal and telephone cold calling, and internet blogging. There are also Indirect selling approaches which include networking organizations, public speaking, publishing, workshops, and events. They may be low cost to initiate; however, these are the Channels that also do not scale well (or sell very well when it comes time to exit your model). There is a commonly held belief that any new career must start here and over time develop Key Resources. All it takes is courage. While courage is essential, if customers are not willing to pay more than cost for your value as you present it, courage only leads to financial losses. You will frequently find this misleading message embedded in career and business development advice.
Key Partner Channels
A practical alternative strategy is to work together with Key Partners. These Channels can be both cost effective and scalable; however, they will require you be a good Key Partner in return. Key Partner Channels can be VARS, Distributors, Retailers, Professional Referral partners, even Customers who are now "fans" and enjoy being able to recommend you to their contacts. Actively looking to promote Key Partner relationships into Key Partner Channels may launch a new Personal Business Model more easily than a Customer Discovery/Validation process.
Finding Your Channel mix
Your model is based on a mix of Resources, Activities, and Partners (RAP). The development of a corresponding mix of Channels from them should feel natural, even inviting. If it doesn't, the problem may be your RAP is insufficient for the model's Value Proposition or Customer Segments and needs to be adjusted. In the end, a good business model should just make good sense.
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