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Can you sum up your business model, or the Business Model Canvas of your business? If not, don’t worry, we are going to see how.
This is the best way to explain to a group of people or investors what your business idea or project is about.
What is the Business Model Canvas?
El Business Model Canvas or Canvas Model gives you an overall view of the business model based on 9 areas that are related to each other.
This methodology was first named in the book “Business Model Generation” in 2010 by the authors Alex Osterwalder and Yves Pigneur.
The book talks about how to create a business model, based on strategic management for creating projects and developing the business.
In short, the model is summed up in certain elements, which are:
- Customer segments
- Value propositions
- Channels
- Customer relationships
- Revenue streams
- Resources
- Activities
- Key partners
- Costs
With these elements well defined, you get a clear positioning in your sector.
Benefits of the Business Model Canvas for an online business
The Canvas Model is widely used for the growth, expansion and development of a business, to detect all the possibilities that make it possible.
This is currently the most used methodology by entrepreneurs, international businesses and companies to create a strategic management system for projects. Its advantages are:
- Simplicity: It shows the elements and results quickly and concisely, which makes it possible to see the actions to take into account.
- Visual: Ease of showing relevant ideas graphically.
- Adaptable: It can be used for any type of project or business, at any stage of the business.
- Interactive: It shows the elements within the context of a project, so the people on the team can contribute.
- Global: It lets you see 360º of the most important parts of the business.
What elements do you need to create a Business Model Canvas?
The elements needed to create the Canvas Model are similar to a business plan.
1. Segments
The center of every business is always the consumers or customers of the product or business in the market.
The Business Model Canvas gives priority to customers, since they make the business work and run. It is important to know our niche, who makes it up and the income we receive.
2. The value proposition
Organize all the elements that are part of the product or service set up to meet the needs of the customers in the market.
The value proposition should show everything related to the product or service, such as:
- Size
- Design
- Price
- Competitiveness
- Attraction strategy, etc.
3. Channels
You must identify the communication channel through which you will deliver your products and/or service to your target audience. In this sense, your Digital Marketing Plan defines the way and the actions to carry out to reach the goals.
Once everything related to customers and the product/service is done, the Canvas Model must take into account the communication channels, since they will make the connection between your value proposition and the purchase or acquisition of your business.
4. Customer relationships
You must be clear about the limits of where your relationship and actions with your customers start and end.
Here is an example: fast food restaurants.
This type of business marks very clearly the limits of interaction between the staff and the customers, making it clear that the customer goes to the counter to place the order, finds a table and, once finished, takes the tray back.
These actions must be studied carefully, because depending on the actions you take you can reduce costs and improve service or logistics, but you can also reduce quality and increase customer dissatisfaction.
5. Revenue streams
After the previous points are completed, the Business Model Canvas focuses on revenue streams.
This element is studied through the amount of capital obtained from the customer once they have bought or consumed the product or service offered by the company.
It is important to create a redistribution plan for production requirements and the overall costs of the project.
6. Resources
It is one of the most delicate points in any project and the Canvas Model takes it into account. In short, it is the management of the resources the business has to run efficiently.
According to this system, you need to analyze and divide it into four elements:
- Physical.
- Intellectual.
- Human.
- Financial.
7. Activities
It gathers all the actions your company needs to carry out to make a profit.
To do this, it is important to be clear about which activities the company performs, such as which actions will have no place in this business model.
8. Partners
Within the Business Model Canvas, as in any business, you need to be clear about who your partners in crime will be along your project.
You will have to consider partnerships with strategic suppliers and alliances with possible customers, franchises, etc.
9. Costs
The last point of the Business Model Canvas is building a cost structure, where all the previous points must be clearly reflected.
Why you need to make the Canvas Model
Designing a Business Model Canvas lets you see in a very simple way the opportunity to make your business model more profitable and sustainable.
In this way it lets you set the foundations for a scalable, profitable project and lets you directly observe each of the real environments in which the organization is involved.
This system insists on the repeated influence of the human factor as the main axis of the ecosystem that makes up the market, and on a well-established communication model, making it essential in the process of company growth.
It also calls for a much more careful handling of the human side of the business environment.
Download a Business Model Canvas template
If you have read the whole article, think it can be interesting for your business and want to put what you learned into practice, here is a template in Word format so you can start working.
