Using The Business Canvas Model- Explained and Template
Most of the time, we make business sound more complicated than it should be —don't believe me?
A “standard” written business plan is defined as “A plan for the successful operation of a business, identifying sources of revenue, the target customer base, products, and details of financing”...
A mouthful, or an overly complicated word document that would take hours to draft. That is where the Business Model Canvas comes in to save us all:
It provides us a way to create a clear business model using just a SINGLE sheet of paper.
What is the business canvas model (BMC)?
The Business Model Canvas is a tool used for visually developing or displaying a business model. A BMC template helps determine and align the key business activities and their relationship to your (hopefully groundbreaking and amazing) value proposition.
What is the objective of the model canvas template?
The 9 block model was designed by Alexander Osterwalder and Yves Pigneur to help you and your team collaborate to find a better way to explain and visualize your business's strengths, opportunities, and possible weaknesses.
Simply put, it will make your business model:
Easy to understand
Focussed
Flexible
Customer Oriented
Easy to communicate
Should you use it? 5 Benefits of using a Business Canvas
Provides a structure for ideation
The “whiteboard” style of the model unlocks your visual creativity and unique possibilities. Many find it easier to visualize a business model in one simplified view.
Focuses you on your value proposition
It's easy to get distracted by all the hassle of running a business, that's why the Business Model Canvas brings your attention back to what really matters: Your Value Proposition. It's there as your north star that you should continually reference to move forward.
Is fast to complete
Up for a challenge? Get yourself some snacks and your team can have the model completed in a matter of hours. This allows for quicker feedback, quicker ideation, and faster iteration.
Provides a holistic view of your business
With the Business Model Canvas, you can see how all the elements of your business are interrelated and inform or affect each other.
Gives you “The One” document to share everywhere
Do you want your mentor, boss, brother, or house pet to grasp the concept of your business? Then the BMC is the way to go. Because the visual presentation is easy to understand, teams, stakeholders, advisors, and partners should find the canvas to be relatively straightforward and simple.
When should you create it?
Time for the bad news… sadly, the Business Model Canvas is not intended to serve in place of a business plan —I know, you are going to have to do some writing after all.
Instead, the BMC strives to provide clarity and only the most important information about your business or business idea. For startups especially, it provides a path to organize and consolidate ideas around your key functions.
Whether you use it before starting a business or to review and improve on how things are going, remember that the factors listed in the BMC change and evolve over time. So keep your head on a swivel!
How to create a Business Canvas Model: 9 Key Resources
1) Key partners
Those tasks and activities that are influential but which you will not do yourself.
2) Key activities
What are the most important strategic things you must do to make the business model work?
3) Key resources
Describe your most important strategic assets. Typically, a combination of: Physical, Intellectual, Human, and Financial.
4) Value Proposition
Describe the value you deliver to each customer segment —newness, high performance, design, brand, price, etc.
5) Customer relationships
Answers how you Get, Keep and Grow your customers. To answer this question walk through the entire customer journey in detail.
6) Channels
Describe how you reach your customers. Will you use your own channels or partner?
7) Customer segments
Define the ideal customer personas your value proposition is intended to benefit, who are your customers?
8) Cost structure.
List the key costs and ensure they are aligned with your value proposition.
9) Revenue streams
Where does the money come from? What strategy will you use to capture the most value from your customers?
Quick BMC examples to get you started
Let's provide a couple of quick examples to get your brain juices flowing. While going through these, remember that it's not only critical to describe each building block of the model as accurately as possible, but also to identify how they relate to each other.
Skype
Skype has been around for ages, connecting people around the world with a friendly interface and a free-to-use business model for most users.
Pay special attention to its value proposition and how it relates to its revenue streams. You will quickly find out what makes this tech giant unique and undefeated in the space.
Gillette
The best razors ever? Not exactly. But the most known worldwide. Gillette knows their customer like the palm of their hand, they are not wasting resources in getting them "the very best" but instead convenience and price. Pay attention to their key partners and channels to understand what makes them special.
Need help to create your own Business Model Canvas?
Luckily, there are many resources to get you started creating your very own BMC.
A mentor could be your best choice to get an expert with experience in business to guide you throughout the entire process. The MicroMentor platform provides you with the opportunity to find a business mentor to help you design your canvas and optimize the building blocks that you might identify as weak or with the potential to be better.
Sign up and connect with a business mentor for free here.
Hypothetical Examples of the Creative Process
Google Home
Let’s talk through a hypothetical example, using Google's AI speaker (“Google Home”) as our guide.Imagine that as they were talking through what belonged in the “Revenue Streams” bucket of the business model canvas, Google’s Home team came up with three sources of revenue to start with:
Selling Home devices.
Using the device to sell other stuff as customers ask it to connect to different streaming providers. (“Hey Google, please play music from Spotify, Apple Music, or Pandora .”)
Licensing Home's proprietary speech-recognition technology to other businesses.
Now, if the Home product team put these on their business model canvas, they’d know that they need to make room for budget, time, and resources on their product roadmap for all of these revenue streams.
Example of the Business Model Canvas: Channels
Or think about the Channels bucket in the business model canvas. If your team was building out a canvas, maybe you’d have several ideas for reaching customers:
The in-house sales team.
Word-of-mouth advertising from users.
It’s easy to write. But how are you going to translate that “word-of-mouth” strategy into an actual plan? Maybe you’ll need to budget time and resources for developing things right into your product that make it easier for users to share their experiences with friends, such as a handy tool to help them tweet about it. Potentially, you’ll even want to include an “Invite a friend” feature that lets users easier send a trial license to friends, or a couponing feature that offers some reward to a user who brings in two more users
—The point is, your business model canvas can serve as a great strategic reminder of the things you’ve determined are important enough to make it onto your product roadmap (check out our article on that).So you can always look back and see immediately—it’s just one page, after all—if you’re still working on all the essential elements of your product, or if you’ve inadvertently strayed from them and gotten lost in the wrong details.
FAQs about business model canvas
What is a business model canvas used for?
A business model canvas is a tool used to visually depict a business model. Business models are often very tedious and lengthy documents that are difficult to follow. Instead, a business model canvas allows you to create something more intuitive and engaging, while still covering most, if not all the critical topics you need to revise.
What are the steps to create a business model canvas?
There are 9 key components to a business model canvas that you need to spell out: start with the key partners, activities, resources, and propositions that define your business and will enable you to offer a product or service. Then, spell out the nature of your relationship with your customer base, along with customer segments and the channels with which you’ll reach them. Finally, spell out the cost structure and revenue streams of your business.
What should you include in a business model canvas, or what are the areas of a business model?
You should include 9 key elements in your business canvas template: key partners, key activities, key resources, key propositions, customer relationships, channels, customer segments, cost structure, and revenue streams.
