This is Episode 3 in Part I of the Microgreens World series, “Starting a Microgreens Business: What You Need to Know.” It is also #3 in Part I, “Understanding the Market and Business Model.” If you missed the earlier posts, explore them here: “Microgreens Business.”
In 2018, my friend Stephen and I quit our corporate roles and embarked on an exciting journey to start our own microgreens business, JPure Farms. We began in Steven’s house’s basement, armed with only a one-page business model canvas [1] and a shared passion for sustainable agriculture. The canvas was our roadmap, outlining our customer segments, value proposition, distribution channels, customer relationships, revenue streams, key resources, key activities, partner network, and cost structure. It was a simple tool, but it held the blueprint for our venture.
Creating a microgreens business model canvas involves defining nine key components: customer segments, value proposition, distribution channels, customer relationships, revenue streams, key resources, key activities, partner network, and cost structure. It is vital to regularly update the canvas to reflect evolving business strategies and market conditions. This tool is a dynamic blueprint for your microgreens venture, guiding decision-making and strategic planning.
We faced numerous challenges, from sourcing high-quality seeds to navigating the complexities of distribution. Yet, with each hurdle, our business model canvas (BMC) guided us, helping us refine our strategies and stay focused on our goals. JPure Farms grew into a thriving microgreens business, and we owe much of our success to the solid foundation laid by our business model canvas.
If you’re considering starting a microgreens business, I can’t stress enough the importance of a well-crafted business model canvas. It’s more than just a document; it’s a strategic tool that can set your venture on the path to success.
So, join me as we delve into the intricacies of crafting a winning business model for your microgreens venture.
QUICK READS
Crafting a Winning Business Model for Your Microgreens Business
Value Proposition: The Heart of Your Microgreens Business
Customer Segments: Knowing Your Microgreens Market
Channels: Reaching Your Microgreens Customers
Customer Relationships: Building Trust and Loyalty
Revenue Streams: Monetizing Your Microgreens Value Proposition
Key Resources: The Backbone of Your Microgreens Business
Key Activities: The Operations That Drive Your Microgreens Business
Key Partnerships: Leveraging Collaborations for Business Success
Cost Structure: Understanding Your Financials
Key Takeaways: Bringing It All Together for Your Microgreens Business Success
Related Questions
Share The Guide
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MICROGREENS BUSINESS MODEL CANVAS
Crafting a Winning Business Model for Your Microgreens Business
It is a strategic process requiring a deep understanding of your business and market to draw up the winning business model for your microgreens business.
At JPure Farms, we started with a clear vision – to provide fresh, locally grown microgreens to our community. But a vision alone wasn’t enough. We needed a plan and roadmap to guide our decisions and actions. That’s where the business model canvas came in.
The business model canvas is a chart with nine elements detailing a company’s value proposition, infrastructure, customers, and finances. It’s a great tool to articulate your business idea and make it tangible. For JPure Farms, it helped us identify our unique value proposition – offering a variety of high-quality, nutrient-dense microgreens grown using sustainable practices.
Our first business model, and yours, should be a “SWAG,” American slang for “Scientific Wild-Ass Guess.” Since we knew very little about the microgreens market at the time, our first business model canvas was a WAG!
We defined our customer segments, understanding who would benefit most from our products – local restaurants looking for fresh produce, health-conscious consumers, and local markets. We identified the best channels to reach our customers, such as health food coaches, nutritionists, farmers’ markets, direct sales to restaurants, and online sales.
We also outlined our key resources, activities, and partners. Our resources included our growing space, seeds, and our dedicated team. Our key activities involved growing, harvesting, packaging, and delivering our microgreens. As for partners, we collaborated with local restaurants and markets, which helped us reach more customers.
We detailed our revenue streams and cost structure, ensuring our business could be profitable and sustainable. This involved pricing our products to cover costs while providing value to our customers.
The business model canvas isn’t a one-time activity. It’s a living document that evolves with your business. As JPure Farms grew, we revisited and revised our canvas to reflect business and market changes. It was an invaluable tool in our journey, helping us navigate the exciting world of microgreens farming.
“We finally can define a startup: A startup is a temporary organization designed to search for a repeatable and scalable business model.” – Steve Blank, Stanford University and Entrepreneur.
The Business Model Canvas is a strategic management tool that allows you to visualize, design, and reinvent your business model. Alexander Osterwalder and Yves Pigneur developed it, and it has been used by established companies big and small and startups worldwide, including JPure Farms, to map out and understand their business models.
The canvas has nine building blocks, which represent the most fundamental aspects of a business:
| 1. Customer Segments | It’s the diverse set of people or organizations your company wants to attract and serve. For JPure Farms, our primary customer segments include local restaurants, health-conscious consumers, and local markets. |
| 2. Value Propositions | This is why customers turn to your company over another. It solves a problem or satisfies a need. At JPure Farms, our value proposition offers various high-quality, nutrient-dense microgreens grown using sustainable practices. |
| 3. Channels | As a result, your firm is communicating with and reaching out to its customer segments to achieve this value proposition. Our channels include farmers’ markets, direct sales to restaurants, and online sales. |
| 4. Customer Relationships | These are the types of relationships a company establishes with specific customer segments. We sought to maintain a strong relationship with our clients. We provided their customers with the personal assistance and support they deserved. |
| 5. Revenue Streams | This is where the money comes from. It represents the cash a company generates from each customer segment. Our revenue streams came from the sale of our microgreens. |
| 6. Key Resources | These are the assets required to offer and deliver the previously described elements. Our key resources included our growing space, seeds, and dedicated team. |
| 7. Key Activities | These are the most important things a company must do to make its business model work. Our key activities involved growing, harvesting, packaging, and delivering our microgreens. |
| 8. Key Partnerships | These are the network of suppliers and partners that make the business model work. Our key partners include local restaurants and markets. |
| 9. Cost Structure | This is the description of all costs involved in functioning a business model. This involves the cost of seeds, growing space, labor, and delivery. |
JPure Farms created a successful and sustainable microgreens business by understanding and applying the Business Model Canvas. So can you.
Value Proposition: The Heart of Your Microgreens Business
The value proposition is the unique combination of products and services that differentiate your business from competitors and make it attractive to a specific target audience. It’s the heart of your business model. That’s why it sits in the center of the canvas and is a critical element in driving customer interest and loyalty.
At JPure Farms, Steven and I identified our unique selling points (USPs) that set us apart in the crowded microgreens market. Our USPs include:
| Quality | We grow specifically nutrient-rich varieties of microgreens using organic practices, ensuring the highest quality and nutrient density. |
| Sustainability | We’re committed to sustainable farming practices, using minimal water and no synthetic fertilizers or pesticides. Our customers appreciated our commitment to the environment. |
| Local | We’re a local farm, and we emphasize this in our marketing. Our customers loved that they were supporting local agriculture and reducing their carbon footprint when they bought from us. |
| Education | We didn’t just sell microgreens; we educated our customers about their health benefits and how to use them in their meals. This added value beyond just the product itself. |
Aligning our value proposition with customer needs was critical to our success. We did this by listening to our customers, understanding their needs and preferences, and delivering products and services that meet them.
For example, we learned that our customers value sustainability, making that a cornerstone of our farming practices. We also discovered that many customers needed help using microgreens, so we began offering recipes and cooking tips on the microgreens company website.
Your value proposition is more than just your microgreens but the total experience you provide your customers. It’s about delivering quality, promoting sustainability, supporting local agriculture, and educating customers [5]. This comprehensive approach helped us stand out in the local microgreens market and build a loyal customer base.
Customer Segments: Knowing Your Microgreens Market
Understanding your market is crucial for the success of your microgreens business. At JPure Farms, we’ve spent considerable time and effort defining our target customers and understanding their preferences and buying behavior.
Our target customers are health-conscious consumers who value fresh, locally-grown, organic produce. They range from young professionals to older adults interested in maintaining a healthy lifestyle. We also found a niche market in caterers keen on offering fresh and unique ingredients in their dishes.
Understanding our customers’ preferences and buying behavior was vital in tailoring our offerings. We learned that our customers prefer a variety of microgreens, so we grew everything from arugula and beet greens to radish and sunflower greens. They also valued the freshness of our products, so we harvested and delivered our microgreens on the same day.
We also noticed that seasonal changes influence our customers. For instance, during the holiday season, there was increased demand for our microgreens as people sought unique and healthy options for their festive meals. Recognizing this trend, we were able to plan our planting schedule accordingly to meet this seasonal demand.
Knowing your market is instrumental in shaping your business model. It will help you identify your customers, what they want, and how to best meet their needs. This customer-centric approach has helped us build strong relationships with our customers and drive the growth of JPure Farms.
Channels: Reaching Your Microgreens Customers
Effectively reaching your customers is a vital aspect of your microgreens business model. At JPure Farms, we leveraged online and offline channels to connect with our customers and market our products.
Our primary distribution channel was local farmers’ markets. These markets allowed us to interact directly with our customers, answer their questions, and build personal relationships. We also offered samples of our microgreens, which often led to immediate sales and repeat customers.
In addition to farmers’ markets, we established partnerships with a handful of local health food stores and restaurants. These partnerships expanded our distribution channels and increased our visibility in the local community.
We built a simple website where customers could learn more about our microgreens, farming practices, and where to find our products. We mainly used social media platforms like Instagram and Facebook to engage with customers, share updates, and promote our products. We found that sharing behind-the-scenes photos of our farming process and posting recipes using our microgreens were particularly popular with our followers.
Email marketing is another online channel we found compelling. We sent out a weekly newsletter with updates, recipes, and sometimes special promotions. This kept our customers engaged and encouraged repeat purchases.
Selecting the proper channels to reach our customers was crucial in growing JPure Farms. It’s about being where your customers are, both physically and digitally, and providing them with value beyond just your products.
Customer Relationships: Building Trust and Loyalty
Building trust and loyalty with our customers has been a cornerstone of our success at JPure Farms. We believe that our relationships with our customers extend beyond the point of sale, and we implemented several strategies to foster strong customer relationships.
One of our key strategies for customer retention and engagement was providing exceptional customer service. We strived to be responsive, helpful, and friendly in all our customer interactions, whether answering questions at the farmers’ market, responding to comments on social media, or handling customer inquiries via email. We found that customers appreciated our personal approach and were likelier to become repeat customers when they felt valued and respected.
We also engaged our customers through our weekly newsletter. We shared updates about our farm, new product announcements, and recipes featuring our microgreens. This kept our customers informed and helped us build a community around our brand.
Additionally, we implemented a customer loyalty program. The customer earned points for every purchase and used them to receive discounts on future purchases. This program encouraged repeat business and rewarded our most loyal customers. This is easy to do.
Building customer trust and loyalty is more than selling quality microgreens. It’s about creating positive customer experiences, providing value beyond your products, and building a community around your brand. These efforts were instrumental in the growth and success of JPure Farms.
Revenue Streams: Monetizing Your Microgreens Value Proposition
At JPure Farms, we learned that a successful microgreens business requires a thoughtful approach to monetizing our value proposition. Our revenue streams were not just about selling microgreens but about delivering value to our customers sustainably and profitably for our business.
Our primary revenue stream comes from the sale of our microgreens. We’ve developed a pricing strategy that considers our production costs, the market rate for microgreens, and the perceived value of our products. We strived to price our microgreens competitively while ensuring we covered our costs and made a reasonable profit.
However, we also recognized the importance of diversifying our revenue streams. We offered workshops and classes on growing and using microgreens, which proved to be a popular and profitable addition to our business. We also sold growing kits and supplies for customers who wanted to try growing their own microgreens at home.
Additionally, we explored partnerships with local restaurants and health food stores, offering our microgreens as a premium ingredient for their dishes or products. These partnerships provided an additional revenue stream and helped increase the visibility and reputation of our brand.
Monetizing your value proposition is more than just selling a product. It’s about understanding your customer’s needs and finding creative ways to meet them while generating revenue for your business. This multi-faceted approach was vital to the financial sustainability and success of JPure Farms.
Key Resources: The Backbone of Your Microgreens Business
Every business needs resources, and a microgreens business is no exception, probably more so. At JPure Farms, we identified several key resources essential to our operations.
First and foremost, we needed high-quality seeds and growing mediums to produce our microgreens. We sought to establish relationships with reliable suppliers to ensure we always have access to these critical inputs.
We also needed space to grow our microgreens, and we invested in a dedicated growing area (about 10,000 cubic feet) in Steven’s basement that provided the right conditions for our crops.
Another key resource was our knowledge and expertise in growing microgreens. We spent countless hours researching, experimenting, and learning the best practices for growing microgreens. Stephen and I also took a course that helped us. This knowledge was invaluable and formed the basis of our operations.
We cover this in Part III, Product Development and Pricing, Episode 8. How to Choose the Right Microgreens for Your Business.
Finally, our customers were a crucial resource. Without them, as Peter Drucker reminds us, we had no business. We invested time and effort into building relationships with our customers, understanding their needs, and ensuring we provided them with the best products and services.
Efficiently managing these resources is crucial to your success. You must constantly monitor your supply levels, adjust your growing practices based on your learnings, and actively seek customer feedback to improve your offerings. You can operate a successful and sustainable microgreens business by effectively managing your resources.
Key Activities: The Operations That Drive Your Microgreens Business
Running a microgreens business involves a lot of key activities that keep the operation humming. At JPure Farms, our core activities included sourcing high-quality seeds, preparing the growing medium, planting the seeds, and nurturing the microgreens until they’re ready for harvest. Once harvested, we packaged our microgreens and distributed them to our customers. Simple right?
But our activities continued beyond there. We were constantly monitoring the health of our crops, adjusting our growing conditions as needed, and troubleshooting any issues that arose. We also maintained our growing area, cleaned and sanitized our equipment, and restocked our supplies.
In addition to these operational activities, we also engaged in other essential business activities. We marketed our products, engaged with our customers, managed our finances, and planned for the future of our business.
Streamlining these activities was crucial to our efficiency and profitability. We implemented systems and processes to automate tasks where possible, and we continually looked for ways to improve our operations. For example, we set up a regular delivery schedule with our suppliers to ensure we always had the necessary supplies. We also developed a routine for our daily tasks, which helped us stay organized and manage our time effectively.
You can run a successful and sustainable microgreens business by focusing on your key activities and constantly striving to improve.
Key Partnerships: Leveraging Collaborations for Business Success
In the microgreens industry, strategic partnerships can be a game-changer. At JPure Farms, we built relationships with various partners crucial to our success. These included our seed suppliers, who provided us with the high-quality seeds we needed to grow our microgreens, and our distribution partners, who helped us get our products into the hands of our customers.
We also collaborated with local restaurants and health food stores, who purchased our microgreens for their dishes and shelves. These partnerships ensured a stable revenue stream, helped us access more customers, and raised our brand’s visibility.
But our partnerships were about more than just business. We also teamed up with local schools, senior centers, and community organizations to promote healthy eating and educate people about the benefits of microgreens. These collaborations allowed us to give back to our community and aligned our business with a positive social impact.
The benefits of these partnerships were manifold. They allowed us to share resources, tap into new markets, and build a stronger brand. They also provided us with opportunities for learning and innovation as we exchanged ideas and insights with our partners.
In the microgreens business, as in any business, you can’t do it alone. Building strategic partnerships is vital to leveraging your resources, expanding your reach, and achieving long-term success.
Cost Structure: Understanding Your Financials
Understanding the cost structure of your microgreens business is crucial for financial sustainability. At JPure Farms, we identified several major cost drivers. These included the cost of seeds, growing medium, equipment, labor, and overheads such as utilities and rent.
Seeds and growing medium were recurring variable costs that directly affected our production capacity. We optimized these costs by sourcing high-quality, cost-effective suppliers and buying bulk. Equipment costs, on the other hand, were largely upfront fixed investments. We invested in efficient, durable equipment that minimized maintenance costs and maximized productivity.
Labor costs were another significant expense. To manage these costs, we implemented efficient farming practices that minimized labor hours and continually invested in training to improve productivity. Overheads like utilities and rent are fixed costs that we managed to reduce by optimizing our use of space and resources.
However, cost optimization wasn’t just about cutting costs. It was about spending wisely to maximize value. For instance, investing in high-quality seeds and growing medium increased yield, product quality, sales, and profits. Similarly, we invested in employee training to boost productivity and reduce costly mistakes.
We explore this more in Part II, Essential Financial Strategies, Episode 6. Cash Flow Management for Your Microgreens Business: Avoiding Common Pitfalls.
Understanding your cost structure and implementing cost optimization strategies is critical to running a profitable microgreens business. It allows you to price your products competitively, make informed investment decisions, and ensure the financial health of your business.
Build A Commercial Microgreens Startup
In this free 10-lesson email course, we explain why you shouldn’t create a “business plan.”
From there, we take you on a journey of discovery that has been trekked by tens of thousands of other entrepreneurs just like you.
We respect your privacy. Unsubscribe at any time.
Key Takeaways: Bringing It All Together for Your Microgreens Business Success
Crafting a winning business model for your microgreens business is a journey that requires a deep understanding of each component of your business. At JPure Farms, we leveraged the Business Model Canvas as a tool to visualize and strategize our business operations.
Our value proposition was rooted in delivering high-quality, sustainably grown microgreens. We identified our target customers and their preferences and chose the proper distribution channels to reach them. We built strong customer relationships through engagement and excellent customer service.
We diversified our revenue streams using different microgreens varieties and sales channels. We identified our essential resources and streamlined our key activities for efficiency. We also built strategic partnerships that added value to our business.
Understanding our cost structure was crucial in pricing our products competitively and ensuring our business’s financial sustainability. We identified our major cost drivers and implemented strategies to optimize these costs.
Creating a successful business model for your microgreens business is continuous learning, adapting, and optimizing processes. It’s about understanding your market, delivering value to your customers, and managing your resources efficiently. It’s about building a business that is not only profitable but also sustainable and rewarding.
We hope our journey at JPure Farms inspires you to start your own microgreens business. Remember, every successful business started as an idea. With the right tools, knowledge, and passion, you, too, can turn your microgreens business idea into a thriving venture.
Related Questions
What is a microgreens business model canvas?
A microgreens business model canvas is a strategic tool that outlines the critical components of your microgreens business, including your customer segments, value proposition, distribution channels, customer relationships, revenue streams, key resources, key activities, partner network, and cost structure. It provides a visual overview of your business model, helping you to identify potential opportunities and challenges.
Why is a business model canvas important for a microgreens business?
A business model canvas is crucial for a microgreens business as it helps to clarify your business’s key elements, such as your target customers, value proposition, and revenue streams. It allows you to strategize and plan effectively, ensuring that all aspects of your business are aligned toward achieving your goals.
How can I create a microgreens business model canvas?
Creating a microgreens business model canvas involves identifying and defining the nine key components of your business model. You can start by outlining your value proposition, customer segments, and channels. Then, you can detail your customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure. It’s essential to be thorough and consider all aspects of your business.
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- Discover more business tips in the post, “13 Solutions to Mastering the Challenges of Your Microgreens Business Journey.”
- For a wealth of knowledge, read the post “Harnessing Technology for a Greener Future: A Guide for Microgreens Entrepreneurs.”
- Discover how to grow microgreens. Read this post, “Beyond the Windowsill: Growing Microgreens on Your Balcony or Patio.“
- Interested in nutrition and health? “The Beginner’s Nutritional Guide to Incredible Microgreens” to explore more about microgreens.
Build A Commercial Microgreens Startup
In this free 10-lesson email course, we explain why you shouldn’t create a “business plan.”
From there, we take you on a journey of discovery that has been trekked by tens of thousands of other entrepreneurs just like you.
We respect your privacy. Unsubscribe at any time.
Sources
Authoritative sources that provide scientific support for the post:
- Strategyzer AG. “Strategyzer | Canvases.” Strategyzer.com, 2019, https://www.strategyzer.com/books.
- Osterwalder, Alex. “Alex Osterwalder.” Www.alexosterwalder.com, 2021, www.alexosterwalder.com/.
- Locating Value in Artisan Cheese: Reverse Engineering Terroir for New-World Landscapes https://oa.mg/work/10.1111/j.1548-1433.2010.01251.x by Heather Paxson, 2010. This paper discusses the concept of terroir and how artisan cheesemakers in the United States adapt it to distinguish their products from commodity production.
- The second green revolution: Innovative urban agriculture’s contribution to food security and sustainability – A review https://oa.mg/work/10.1016/j.gfs.2019.08.002 by Dian Triastari Armanda, Jeroen B. Guinée, and Arnold Tukker, 2019. This review discusses the role of innovative urban agriculture in meeting current and future food demand.
- “Terroir Hospitality.” Terroir Hospitality, www.terroirtalk.org/. Accessed 2 Aug. 2023.
- Strategies to improve the productivity, product diversity, and profitability of urban agriculture https://oa.mg/work/10.1016/j.agsy.2019.05.007 by Cathryn A. O’Sullivan, G. D. Bonnett, C. L. McIntyre, Zvi Hochman, and Anton Wasson, 2019. This paper discusses strategies to improve urban agriculture’s productivity, product diversity, and profitability.
