All business models call for you to perform a number of key activities. In Business Model Canvas, key activities are item number SEVEN in building out your canvas. These are the key activities you must DO in order to be able to deliver your value propositions, access your customer segments, maintain relationships and ultimately earn money.
In this article, we take a look at how to determine your key activities list for Business Model Canvas (BMC) and how they might differ depending upon your industry.
Know Your Business Category
With Business Model Canvas, key activities include critical tasks your business must perform to support your value propositions. This of course will largely be driven by the type of business and industry you are in. So the first step is to take a look at the type of business you have.
1. Production or Creation of Goods
Is your business built around goods? If you are producing, creating, or constructing a physical product, then yes. These key activities usually involve sourcing raw materials and manufacturing. Some of the key activities might therefore be involve quality and cost control. Employees will process them and distribute the final product. Here are some examples:
A farmer that focuses on growing vegetables.
A mobile phone manufacturer that makes phones.
Any business where your customers pay for manufactured, produced, or grown goods.
If the production process is the main building block of your business, then you are in the “production or creation of goods” category. Companies like Samsung and Tesla are famous examples of such businesses.
2. Problem Solving
If you’re focused on individual customer problems and developing new solutions for those problems, then you have a “problem solving” business. Examples of problem-solving businesses include hospitals, consultancies and often service organizations.
According to BMC, problem-solving businesses are very knowledge intensive. Some of the key activities might therefore be for your research and development department. Knowledge management and continuous training may be typical key activities for such a business.
3. Platforms and Networks
You may have a platform or network business if you provide software, a matchmaking service, or some form of a platform that allows people to conduct transactions. Platforms often connect businesses to customers, enabling buyers to find goods and services. Business Model Canvas even lists “brands” as a type of platform.
eBay is an example of a platform and eBay‘s key activities would include maintaining its platform. Visa provides a credit card transaction platform for merchants, customers and banks. Their platform management activities include maintaining the security and operations required for transaction processing. Meta, LinkedIn and other social networking utilities are examples. Platforms like Zoom have almost become networks in their own right.
Support Your Value Proposition
Now that you have clarified your business category, you can see how you are delivering value to your customers. So, with your value proposition in mind (item number TWO in building your BMC), write down the key activities required to make your business model possible. Hint: also go through each of the SIX proceeding building blocks of your business model.
You have promised your customers something. How can you ensure you deliver it? Articulate the exact steps needed to support each customer segment. Draw your key activities from this list. Here are some example questions:
What actions are integral to building your platform, product, or service?
What do you need to DO to distribute your product or service?
What activities will allow us to acquire key resources?
What activities allow us to maintain good customer relationships?
What activities are mandatory for ensuring revenue streams? How often do you need to do these tasks?
The key activities you need to perform will again vary depending upon your industry, your niche, and your business model.
Example key activities for a production/goods business
In this example we will assume you are a supplements manufacturer. Key activities might be:
Do market research on quality ingredients plus studies that back them up.
Use the studies to promote your products via influencers.
Find a quality factory to make your ______________.
Find a delivery channel that reduces % of goods damaged during transit (and the number of returns)
Create a dunning system for your supplement subscribers.
Example key activities for a problem solving business
In this example we will assume you are a hospital. Key activities might be:
Analyze significant quantities of supplies required due to COVID-19
Research upcoming viral trends and increased staffing requirements
Provide staff training on new procedures per CDA requirements
Create post visit follow up program to improve patient outcomes
Apply for government assistance program to bolster revenue streams
Example key activities for a platform/network business
Next let’s look at network related key activities for a social media company:
Analyze social media trends and collect data on them for specific business niches.
Understand each social media platform’s algorithm and stay on top of updates.
Build an account on each social media platform you plan to manage for your clients.
Effectively convert social media engagement to sales on your social media accounts. Use as proof of work, market your firm, and showcase a portfolio of expected or proven results.
Create a referral system loop
Use Daily Tasks to Brainstorm Key Activities
Create a list of daily activities. This will help you decipher what a key activity is and what it is not a key activity. These activities are integral to the success of your business.
If you run a grocery store, you must take stock and restock daily. Your customers will expect goods on the shelves. If these goods are missing, then your grocery store will fail. An online mentorship and coaching business would have different daily tasks. These could be morning check-ins with each client, sending individualized to-do lists, and scheduling meetings with each client. It depends upon your business model.
Here are example daily question you might ask yourself if you are running a bakery:
Are the bakers baking any pastries or cakes?
Have the ingredients that needed restocking arrived, or is shopping pending?
Have customers been notified they can pick up their orders? Will they receive a delivery today?
Are there orders on social media pages or from your website order form?
Are there big client orders that move the bottom line?
Resulting key activities
From these questions, your key activities might center around:
Baking (integral to building)
Stock taking and shopping (key resource)
Pickup/delivery update (distribution channels)
Social media and website management (customer relationships)
Research key partners like events companies (key partners & revenue streams)
Now it’s time to vet your list. Is each key activity helping you maintain customer relationships? How are you delivering on the customer experience?
Additional Tips for Deciding Key Activities
SMB vs. enterprise key activities
Small and mid-sized businesses will usually have tasks or processes as key activities. When a larger corporation is working on business models, it will list out key activities with a higher level of abstraction. The process for mapping these key activities in a Business Model Canvas is the same. The difference is scale. At a larger scale, you will become increasingly abstract with your list.
Small businesses will also have fewer key activities. Each key activity takes up time and money from a startup’s small workforce and limited resources. Do not overcomplicate key activities. Good business models create simplicity.
Less is more
Having many key activities sounds exciting and productive, but this will impact your ability to focus on the necessary tasks to best deliver on your value proposition. Concentrate on a few essential chores to get a competitive edge. That doesn’t mean you only do the key activities of course or your business would shut down. It simply means you focus more of your attention on these key activities because you recognize they are growth levers.
Are you struggling to narrow down your typical key activities? Try imagining you are the only one running the business. As an understaffed business, what needs to get done? How can your customers still get quality products or services from you, even as a one-person team? The necessary tasks to make that possible are your key tasks.
Key activities must change
Your key activities block will change as your business grows because your goals will change. You may need sales support from a sales team. You may need inventory control in anticipation of an expected increase in demand for your products. Make sure to update your key activities as you grow and your goals change.
Key activities may need to change over time as markets shift, causing your goals to shift. The flip side to this is understanding that changing your key activities is a great way to drive innovation and create business transformation. It’s a lever that (somewhat) works both ways.
Correctly identifying your key activities is essential to building your Business Model Canvas. Do not go overboard and overcomplicate the processes. Instead, focus on finding tasks that ease the delivery of your value proposition. Your business will grow as you deliver on your promises, and your key activities need to evolve to match. And if you haven’t already, please go back and check out our section on key resources.