When setting up a business, one of the first things you need to know is what kind of company you want to create and what business model you are going to adopt. If you were wondering what the Business Model Canvas is, it is a tool that helps you to create different business models in a simplified way.
What is the Business Model Canvas?
To understand what the Business Model Canvas is, we start from the premise that it is a model comprising nine blocks corresponding to the characteristics of a business: market segments, value proposition, distribution channel, customer relationship, revenue sources, key resources, key activities, key stakeholders and cost structure. The entrepreneur with a business idea must be able to fill in these blocks. If you cannot do this, it is probably a sign that your idea is not yet mature enough.
How the Model Canvas is applied
There are many successful examples of the Model Canvas, as it has been used for all kinds of business planning for more than a decade. In these cases, a template is usually used in which the nine blocks are clearly shown, because the more visual the information is, the better you will be able to process it. If several people are going to participate in the business project, each one should give his/her opinion on each of the blocks. If you are acting alone, you can put different ideas in each of the blocks. It’s like brainstorming. Annotations can be deleted, moved from one box to another, rewritten, etc. The premise is that the information presented will lead to a debate from which the definitive business model will emerge.
Benefits of applying the Model Canvas to your online business
The model Canvas was developed by Alexander Osterwalder and is already being used all over the world because of the wide range of benefits it provides.
- As it is a very visual tool, it makes it easier for the information to be understood.
- It allows for analysing the business idea from many different points of view
- At a glance, you can see what all the key elements of the business will be, so it also serves as a strategic analysis tool, letting you detect weaknesses and strengths.
- It is a methodology that is easy to use and within the reach of all entrepreneurs.
- It works whether there is a team behind the business idea, or just one entrepreneur.
- It fosters innovation in the business environment while strengthening creativity and analysis.
Blocks of the Business Model Canvas
The structure of this model is based on dividing the ideas into the following blocks:
In this section, you can establish the partnerships that will help you boost your business, whatever they may be.
The activities that will define your business and that will be key to conveying to users so that they will be able to easily recognise what you offer them, and what kind of problems you will provide solutions to.
The resources of any kind (human, technical, etc.) that you will need to efficiently carry out your activity.
What makes you stand out from your competitors? Why should users choose your product or service and not others similar to it? You should answer these questions clearly and concisely in this section.
Relationships with customers
It is very important to have a clear idea as to the type of relationship your customers will expect: Personalised service? Technical support? Sales meetings? It is a good idea to have this set out in advance so that everyone involved in your business knows how these relationships with customers and potential customers should be maintained.
The channels (physical or online, or both) that you will use to advertise your product or service and reach your customers.
It is of the utmost importance that you are aware of who your target customers are, and you must put them in this section.
Here the different costs (fixed, variable, etc.) must be taken into account, as well as the best way to reduce and optimise them.
Source of revenue
Last but not least, are you sure about what your sources of income will be, to make your business viable?
Business Model Canvas template
The easiest way to define your business with this Canvas model is to use a template and fill in all its sections so that all the information is clear. You can download this Business Model Canvas template in PDF format by clicking on this link. Now that you know what the Business Model Canvas is, we recommend putting it into practice if you are thinking of setting up a business or want to launch a new line of products or services. You will be taken aback by the results you will obtain. In fact, if you apply this model well after having designed your block chart, you could spot business opportunities that you had not thought of until now.