4 Business Considerations
Section Overview
| Duration | Slides | Materials | Key Points |
|---|---|---|---|
| 120 min | 32-70 | Case Study information, New business video, NBS BMC |
This section is the longest section of the Explorer Training Programme. It is essentially a crash course in business in which your participants will learn the basics of how to run a business. You will have to introduce a lot of new terms and explain them in depth before letting everybody try to use them in various exercises. Make sure to adapt the pace of the workshop to your audience.
The goal of the Restoration Explorer is to start businesses that can use private capital to protect and improve nature. That means the businesses need to be viable. This section covers the basics of how to achieve this.
4.1 Starting a new business
The video introduces a lot of new terms and even a tool: The Business Model Canvas.
A version, specially designed for Nature Based Solutions, exists as well. The important difference to the general Canvas is that it starts with the business model instead of with the financial flow, broadens the value proposition to more stakeholders, and helps bridge the communication gap between conservation and finance.
- Stakeholder
- People or groups who have an interest or involvement in the success or activities of a business or project. This includes employees, customers, investors, and the local community.
4.1.1 Enter an existing market or create a new product?
There are two main strategies this training covers to create a new business. Creating a new product and entering an existing market. Neither is inherently better than the other. So the goal is to collect and work out some pros and cons of each approach. Before revealing the answers, it can be a nice interaction to let your participants think for a second and then name a few pros and cons in the group.
This question sets up the following topics. At the end of the business section, you will revisit the question if participants should enter a market. By then the participants should be equipped to carry out a first comparative analysis to help their decision.
4.2 Business Purpose
This is an exercise for the participants to think about their business’s purpose.
Present the questions on the slide and then give sufficient time for your participants to think about their businesses. While their are no perfect answers, try to make sure that the answers are as detailed as possible. The clearer the answers are to the participants of the Restoration Explorer, the better they can communicate them with stakeholders.
4.3 Target Customers and Willingess to Pay
One of the most difficult parts of building a business is finding customers and determining what they should pay for what the business is selling.
4.3.1 Identifying your Customers
To support participants in finding their customers give everybody 15 minutes of time to answer the questions on the slide. Based on experience, it helps to have your participants discuss their answers with others either in pairs of small groups, to ensure that all questions are answered. Then run through the case study to show how an existing business identified its customers.
4.3.2 Willingness to Pay
- Willingness to Pay (WTP)
- The highest amount a customer is willing to spend or pay for a product or service.
Getting the price right is one of the most difficult aspects of running a business. Many different strategies exist to determine how much a business should charge for its products and services, here the slide notes introduce three of the most available options:
- Research the competition
- Research customers
- Survey customers
The categories of pricing shows what different price levels signal to customers.
4.4 Value Proposition
Pricing needs to correpsond with the value proposition of a business’ products and services.
- Value Proposition
- The unique set of benefits and value that a product or service offers to its customers, differentiating it from competitors and addressing the needs and preferences of the target market.
The slide shows a section inspired by the Business Model Canvas. On the left, in the box, are Products & Services, Gain Creators and Pain Relievers. This is what the business provides. In the circle on the right, is the customer profile. It contains what the identified target customer experiences: the jobs, pains and gains. Jobs are things the target customer would like to do, or has to do. They include not only work related task, but might even include hopes and wishes such as: being able to relax in a natural environment with friends and family. Pains refer to undesirable outcomes that customers seek to avoid, such as dissatisfaction with existing solutions, frustrations, obstacles, or risks encountered when attempting to accomplish a task. Lastly, gains represent the indicators of success for customers in accomplishing a job well-done. These gains encompass positive outcomes, tangible results, benefits, and aspirations that customers aspire to achieve. This map becomes clearer the more one learns about ones customer.
Getting the fit right between how a business’ products and services create gain and relieve pain for customers and how customers experience pains and gains related to their jobs is possibly the central challenge. Without a strong product-market fit, it will be difficult to grow a business. Creating product-market fit is not a one-and-done affair either. Instead, as the products and services or the customers of a business change, so will the fit between product and market. Ensuring a strong value proposition is therefore a recurring exericse for any entrepreneur, the more they learn about their offers and their customers, the better they will be able to formulate and communicate a their value proposition.
Sources for insight into the target customer come from research into existing customers of competitors or from research about customers in new market segments that are yet to be created.
- Product-Market Fit
- Product-market fit refers to the alignment between a product or service and the needs, preferences, and demands of a specific target market. It indicates that the product addresses a genuine problem or pain point faced by customers and delivers unique value that resonates with them. Achieving product-market fit is crucial for sustainable business growth and market success, as it indicates that the offering meets market demand and has the potential for widespread adoption.
The example slide shows how to identify pains and gains the target customer experiences from existing solutions and the entrepreneurs offering.
The slides “Customer’s Pains and Gains” needs to be tailored with a custom case study.
The section on value propositions closes with an exercise where trainees fill in their own problem solution fit.