From idea to business idea

The main principle for social enterprises is real value creation: in the interests of sustainability, it is important that they are created to serve real market needs in addition to the social goal (for example, the employment of people with disabilities) and offer quality, competitive products and services.

Competences addressed/ learning outcomes expand_more

After completing this Learning resource participants will be able to:  
- To be able to identify the CANVAS elements
- To know the steps to build up the CANVAS (does and don’ts from social enterprise perspective)
- To create a CANVAS business plan


The objectives of this learning resource can be summarised as below:
-  To present various details and good advice to consider before starting a business
-  To describe the benefits customers can expect from your products and services 
-  To present a business tool that makes clear how your products and services create value
-  Creating a business plan (describe what to include in a business plan)

Theoretical background expand_more

There is no uniform language and understanding around the idea of social enterprise. Many definitions exist and a wide variety of organisational forms are adopted by social enterprises around the world.

Generally speaking, “social enterprise” means using business tools to address a social need.

The Organisation for Economic Co-operation and Development (OECD) defines social enterprises as “any private activity conducted in the public interest, organised with an entrepreneurial strategy, but whose main purpose is not the maximisation of profit but the attainment of certain economic and social goals, and which has the capacity for bringing innovative solutions to the problems of social exclusion and unemployment” (OECD, 1999).

The main principle for social enterprises is real value creation: in the interests of sustainability, it is important that they are created to serve real market needs in addition to the social goal (for example, the employment of people with disabilities) and offer quality, competitive products and services.

The basis of any successful business is careful business planning, the end product of which is a business concept. This applies to social enterprises as well: in addition to seeking to alleviate and solve a social problem, it is essential for the success of a social enterprise that it operates in a financially sustainable way like any other enterprise.

But what is needed to start a social enterprise?

The elements listed below are just as important conditions for starting a social enterprise as they are for starting any other business.
1. An IDEA is needed that satisfies/addresses demand, which results in economically measurable, profitable activity, and can be operated commercially sustainably and can gradually become independent of state resources.
2. A LEADER is needed who is able to plan the activity, and find partners (founding members, memberships, etc.) who can carry out the tasks related to the planned activity, and can motivate those involved in the task.
3. Must have RESOURCES which provide liquidity until the first income of the social enterprise, creates the financial background for the operation – investments, fixed and varying operating costs, taxes, etc.
4. A COMMUNITY is needed that wants to collaborate, from people who recognize the potential of social enterprises, who are willing to work within a social enterprise for common goals.
5. A PROFESSIONAL SUPPORT BACKGROUND is needed in the phase of establishing and operating a social enterprise, as well as in building relationships and markets, cooperation, advocacy, marketing in the phase of effective economic growth and market access.

The Business Model Canvas helps you think over these issues in a structured way.


Entrepreneurs usually base their business ideas on their capacity to create value in one or another sector of activity. They use their skills and resources to present a valuable offer on the market. 

Formulating a business idea is the first step towards fulfilling your dream of becoming an entrepreneur. Your business plan presents your idea of which type of products or services you are going to sell or offer. The business plan also describes important strategies on how you will reach your customers and who you will reach with your products or services.

A Business Model Canvas is a visual representation of an organization’s business model. As you may guess, it describes the way the company creates, delivers and captures value. Based on a visual language, the Canvas enables anyone to understand pillars and key components of a certain business model.


The nine building blocks of the Business Model Canvas: 
1. Customer Segments. The different groups of people or organizations an enterprise aims to reach and serve.  
2. Value Proposition. The bundle of products and services that create value for a specific Customer Segment. Value may be quantitative (e.g. price, speed of service) or qualitative (e.g. design, customer experience). 
3. Channels. How a company communicates with and reaches its Customer Segments to deliver a Value Proposition. Communication, distribution and sales Channels comprise a company’s interface with customers. Channels can be direct or indirect, owned or partner channels. 
4. Customer Relationships. The types of relationships a company establishes with specific Customer Segments. 
5. Revenue Streams. The cash a company generates from each Customer Segment. 
6. Key Resources. The most important assets required to make business model work. These resources allow an enterprise to create and offer a Value Proposition, reach markets, maintain relationships with Customer Segments, and earn revenues. Key resources can be physical, financial, intellectual, or human. They can be owned or leased by the enterprise or acquired from key partners. 
7. Key Activities. The most important things a company must do to make its business model work. They are the actions that are required to create and offer a Value Proposition, reach markets, maintain Customer Relationships and earn revenues. 
8. Key Partnerships. The network of suppliers and partners that make the business model work. 
9. Cost Structure. All costs incurred to operate a business model.

The idea is converted into a business model based on the Business Model Canvas. This model is a one sheet business plan the elements of which can be taken in whatever order.  

Step-by-step implementation expand_more

How to get started using Canvas?

The easiest way to fill the one sheet business model out, is to print the Canvas in a nice large size, sit around it and fill it with content by brainstorming. 
TIP: Instead of writing directly on the CANVAS, use sticky notes. In this way you won’t waste too much paper, and your CANVAS will also look much cleaner.

You can make the most of it by thinking about each element within the framework of a workshop. There are online versions as well, so whoever is more comfortable with filling it out electronically, can do so. 

After presenting the theoretical part of the Canvas model and its components, with your learners, identify a group with which the group can associate with and thinks that would be beneficial to have some solutions to their needs. For this purpose use the stakeholder mapping technique and watch the video here, for a brief presentation of it. Make sure that real situations are being addressed for which the CANVAS model can be used. 

Following the brainstorming session and identifying the stakeholder group, ask learners to form groups of 4-5 people. Within the groups, they should come up with a goal of a possible problem to be solved.
Let learners know that they will be working to fill in the Canvas. Hand out the model with the questions and the post-it notes. Ensure constant assitance throughout the working phase.

Step by step
While completing a CANVAS, in the process of thinking, it is worth to follow the numbered order. 
TIP: Determine the Social problem
 In the case of a social enterprise, the first to be determined is what social problem we are responding to in connection with our business. Encourage your learners to be as specific and concise as possible, not mentioning general issues but goals as specific as possible, while at the same time being ambitious.
After setting the problem to be addressed, turn to your business ideas and formulate who your value proposition is for, to whom you plan to offer your products and services.
The nine pillars of the CANVAS model cover the four main areas of business, customer, offer, infrastructure and financial viability. Find their brief description below. You can also prepare handouts or watch the video about what the groups should be thinking of.
1. Social problem
In the case of a social enterprise, as mentioned above, the first to be determined is what social problem we are responding to in connection with our business. 
Next, turn to the formulated business ideas and define who the value proposition is for, and to whom they offer their products and services.
2. Customer groups
Start the thinking process by getting to know the customer: determine who can be receptive to the product or service we provide. The first basic rule of marketing is known to all by now perhaps, namely that customers should be grouped, one cannot sell to every single person. If one wants to sell to everyone, they won’t sell to anyone! Form homogeneous groups of customers with similar characteristics, describe their characteristics, and also highlight how you create value for them. If you define more than one customer group, highlight who the most important customers are. When defining customers, our job is to identify the medium that is not too narrow, but not too broad, who may be receptive to what we offer. Further think through who might be the first to use and distribute the product, pay for the service.
3. Value proposition
It is the set of products and services that serve the customers’ needs. In this subsection, we rethink what the real value will be to the customer from our products and services. This sets us apart from our competitors. It can include anything – quality, customizability, design, brand, price, cost reduction, availability and usability. If not all, but we will need one or two of these for a successful business. How will we be better, more efficient, cheaper and more attractive than the products and services already available on the market? How does our offer fit into the world of the customer? How can we help our customer achieve their goal?
4. Sales channels
Once we know for whom and what we offer, we shall determine how – through what channel we can reach our consumers. To put it simply, let us collect the platforms where our consumer can buy our product. Therefore, it is immeasurably important to have as much information as possible about our customers. Where do they find information, where do they shop, what channels are available, etc.? Let us not derive from our own desires, but from the habits and behaviour of our customers. Get to the forums, platforms and places that they frequent, where they shop anyway, where we have a chance to present our product and service to them.
5. Customer relations
Different consumer segments may require different sales (or marketing) strategies. In this section, let us explain the contact with our customers in as much detail as possible. It can be automated or personal, personalized, self-service, but it can also be community-based or constructed together. Thinking about and analysing the specifics of the customer target group and sales channels can help. In general, the larger the number of customers, the more impersonal our relationships are, while with smaller numbers of sales, we can afford more personal advice and handling.
6. Sources of revenue
We can now think through the volume of sales we expect through each sales channel, and how much revenue we expect from it. Naturally, in order to do this, we need to price our product or service as we need to know how much revenue the sale of a unit means. At this section as well, many design flaws can be noticed. If our production capacities only provide small series production, we cannot plan to sell larger volumes. Due to the low level of mechanization, we may not be able to be competitive in terms of price, in which case we need to focus on our other competitive advantage and apply pricing that reflects the quality of the product. It is important to understand that price is an integral part of a product; if we want to convince consumers of its quality, we need to use appropriate pricing. Finally, in addition to the itemized listing of revenue sources, it is worth examining the relative proportions of each revenue channel. This is important because it helps us see the proportion of the weight of a source of income and, if the situation in which it is lost presents itself, what would the results be in relation to the profitability of the company.
7. Key partners
In this section we list the most important partners and suppliers. It is worth mentioning here those who are critical in terms of value creation. List here also the partners from whom we obtain key resources or outsource our key activities. It is worth thinking as carefully as possible about which partners will be crucial to our success. Their unreliability or poor quality of service can be a serious competitive disadvantage.
8. Key resources
As a critical resource, we look at the assets of the enterprise that possess the enterprise’s ability to provide a competitive advantage. By their nature, these resources can be physical, immaterial, and financial, so we include: people, capital, physical and intellectual products. The lower the level of entry into a given business, the more difficult it will be to secure our competitive advantage, thus the more aware we need to be about it. Rare, valuable, hard-to-copy, and well-embedded resources in an organization are a huge business benefit. What is sure is that we need to find a resource in some area that can secure our competitive advantage.
9. Key activities
Consumer value creation takes place through processes within the business. In this case, it is worth highlighting those activities that directly contribute to our competitive advantage and the creation of consumer value: so no frills, just the most important, without which customers feel that they did not receive anything. This is one of the most important factors that separate companies, whether there is an activity within the company that adds to the value of a product / service, or increases its uniqueness. If so, this can be called a competitive advantage. In this element, the activities that ensure this will play a key role in our business success.
10. Cost structures
We have now arrived at business efficiency planning. We now calculate and describe our costs incurred, within which it is worth distinguishing between fixed and variable costs. At this point, it will be revealed what and how much we will spend, and the pricing methodology will also become clear. Comparing planned costs with revenue sources, we can already see clearly whether our business vision will be sustainable and whether we will be able to sell at a volume that can ensure reaching the break-even point. If not, what changes are needed to achieve this? The volume of production needs to be increased, we have to sell at a higher price, but then our target group can change as well!

11. Social impact measurement
Finally, let us determine with what success indicators and other indicators we will be able to present our social impact, and that as a social enterprise we “do good – we represent an important cause”, and what analyses, methods and tools we will need to examine them. Let us make ourselves visible!

The business model is an easily understandable, ideal and practical tool – it helps to make the business idea a reality. We can make the most of it by rethinking each element within the framework of an expert-led professional workshop. Suggested steps for the model that can be completed in a few hours:
1. Work together in a group by brainstorming. Before moving on to each element, define the mission of the business, since that is the reason to conduct business.
2. It is worth starting with the right-hand side; suggested order in pairs: value proposition – customer segment; relationship – channel; partners – key activities – resources; revenue – costs. In the case of social enterprises, this is complemented by a presentation of the social problem and social impact.
3. Discuss the elements of the model, ask questions, so that subsequently the canvas will be ready to be able to be filled out with post-it or markers.
4. Look at the finished filled out Canvas to see if it forms a logical unit in its context. After filling out the Canvas, check the content of its elements again and again.
5. Follow and manage the changes, update the canvas.

One of the biggest advantages of the model is that the order can be changed freely.

After the CANVAS models are completed, make sure to have a debrief session where all the groups can present their work and reflect on the working process. 

Make sure you take a look at the related contents to this material, that is:
Communication for Entrepreneurial Skills
Business management for social entrepreneurs
Forecasting for investing

Time needed and group sizeexpand_more

TIME: 3 hours (60 minutes for exercise about filling in the CANVAS, divided in Groups)
GROUP SIZE: 15-20 learners that can be separated into groups of 4-5 (to make sure different persona mappings are made)

Materials needed for implementationexpand_more

Computer to show links and videos, post-it notes
Stakeholder mapping template prepared in advance
Printed Business Model Canvas (if possible A3) for each group 
Handouts with the steps to follow
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