Business model Canvas is a way to think about your business in a visual and intuitive way. In just 1 page, you can get your entire business represented. It is a cool way to think about your business.
In 2010, Alex Osterwalder and Yves Pigneur penned Business Model Generation. In that book, they introduced the Business Model Canvas along with how it works and different strategies that can be employed. Then, they outline different design strategies and wrap up the book by talking about how to evaluate a business model.
It is an evaluation tool that reminds you to look at nine key factors that could impact a venture.
The 9 Key elements of the Business Model Canvas
- Customer Segments.
- Channels (Marketing Channels that are how you reach the customers).
- Customer Relationships.
- Value Propositions (Unique Value Proposition, that is what the customer actually gets).
- Key Resources (What do you need).
- Key Activities (what you guys do to give the customer value).
- Key Partners.
- Revenue Streams (in what ways you make money).
- Cost Structure (what are your costs and how much do you need to charge).
It may seem easy to derive a business model using a business model canvas if you see it as a mere template to fill. Do not fall into that trap where you fill in with inputs straight from your mind. Work on each block of the Business Model Canvas, generate hypotheses, understand assumptions, brainstorm, and deliberate before settling on inputs for each block. Do not do the exercise from the comforts of your room but get to the field, interact with target customers, prospective partners, and experts in the field and observe customers in action, where possible. Build, test, iterate, learn, then build.
How can a Business model canvas make a Business Stronger?
A business model canvas is a tool that allows you to paint a picture of how your business will work, including how the money will flow, what the product or service will look like, what the target audience is, and how you will position yourself as an expert in your field.
The purpose of a business model canvas is to make sure that you have thought about every aspect of your idea and that it has no holes. It also helps you see if there are areas in which people have tried similar ideas but failed so that you know where to focus your efforts.
A start-up that has clarity on its business model can design a business for success. It makes a more visual interpretation of your strengths and ways to achieve your goal. The process of creating a business plan itself is intimidating for a new entrant to the start-up world. The process of filling the business model canvas thereby gives a clear vision for the entrepreneur of the ideas that he has to flow as a picture.
Business Model Canvas ensures you have considered the fundamental components of your business model in order to ensure you have addressed them all.
Business Model Canvas allows you to align with other internal stakeholders in your project to ensure you have a common view of your business model.
Purpose of a Business Model Canvas
- Used for Validation.
- Used for building culture.
- Used for Team building.
The best business model canvas for startups is the Miro Business Model Canvas template as it is focused on startups and is good for established organizations also.
Is a business model canvas really helpful?
By laying out your business on the canvas, you can rapidly see if there are any shortcomings in your plan. Creating your canvas can be very quick and it definitively makes things clearer for you than going over assumptions in your head. And since it’s very easy to see every idea in one glance, it’s much easier to go over it and change things or explain it in more than 100 pages of the business plan.
The purpose of a business model canvas is to help you develop and map out a sustainable and profitable business model. By mapping out all of the key components of your business model, you can more easily identify areas that need improvement or further development. Additionally, the process of creating a business model canvas can help to stimulate new ideas and creativity for your business.
A business model canvas is a quick way to get an impression of whether you and your company would be able to execute that business model. Such a canvas can tell you a lot.
It gives you a baseline on which to consider future changes to your business model.
What are the advantages of using a business model canvas?
- It is visual and intuitive. This makes it easier to communicate ideas.
- It is easy to create and maintain. This makes the business models very agile that can be constantly adapted to be in sync with the business realities.
- It forces you to think of your business in a more scientific and formal way.
- It reduces your business model into a set of assumptions that you can then test to either be validated or rejected.
- The overall design and layout force you to think about the various key aspects of the business. When you see one part of the canvas empty, you know where you need to put more effort.
To conclude, the Business Model Canvas is exceptionally useful as a way of quickly and succinctly documenting a business model for a startup using the Lean Startup with Customer Development approach, and especially to track how the hypotheses change during validation. and it provides a comprehensive description of the jobs customers want to get done, and how startups products or services can help increase gains and relieve pains in getting those jobs done
