Well Done Business > Blog > Tips > The canvas business model
The canvas business model is a relatively quick way to present the business model in an accessible form (so-called one-pager).
It is particularly popular in the West in the startup industry. However, it can also be used successfully for traditional ventures or for specific business projects.
Read this article to learn all the basics about business model canvas bmc. You will learn, among other things, what are the components of a typical canvas business model, how to approach its creation or what a sample business model looks like.
Business model canvas is a tool for designing, describing and visualizing business models. It is a simple but effective way to present all business elements in one short document.
The business model canvas consists of nine key elements that form the basis of any business. These are:
Customer segments - who is your "target" and what needs is your offering designed to meet?
Value proposition - what values and benefits do you offer your customers?
Distribution channels - how do you get your products or services to your customers?
Relationships with customers - what types of relationships are you building with your customers?
Sources of income - how do you make money?
Key resources - what resources are needed to run the business?
Key Actions - what actions do you need to take to keep your business running successfully?
Key partnerships - who are you partnering with to make your company successful?
Cost structure - what costs do you incur when running a business?
Thanks business canvas model entrepreneurs and project teams can quickly and effectively describe their business, understand the relationships between the various elements, and optimize their business strategy. This tool is especially useful for startups that are just starting out and need to build a coherent business model. Such a simplified good business model can serve as a starting point for developing a full business plan or developing specific aspects of operation such as sales or marketing.
You already know the theory, now see how to visually represent the aforementioned elements:
The standard business model template consists of 9 basic elements. These are:
In addition to this, in the business model example above (bmc template) you also see sections such as environmental or social benefits and costs. These are additional elements that, while not essential, are worth considering, especially if you want to base your company's mission in conjunction with these elements, or if you are considering applying for EU grants.
This section indicates the target groups to which we address our service or product. It is important to precisely define the ideal customer profile (ICP) to understand their needs and operating model.
It is possible to identify several target groups (customer segmentation).
Here we indicate the value proposition (from "value proposition" or "unique value proposition"), that is, the solution we want to offer to our customers.
It is worth pointing out what makes our proposal different from those of our competitors. In addition, you can point to the actual customer problem being solved, rather than the service or product itself. For example, the value of drinking water sold in the desert may be to effectively quench thirst or provide the body with an ingredient necessary for survival. It is, therefore, not the product itself, but the solution to the problem the product provides.
Reach or distribution channels refer to how your product or service will reach customers. This can be put from both the marketing side (channels of communication) and the sales side (type of relationship for purchase).
To answer questions in this regard, it is necessary to consider what the habits of customers are. Where they frequent, how they behave, what they expect. On this basis, you can build effective distribution.
This section deals with the business model in terms of customer tangents and relationships. In terms of developing this section, the customer groups you want to target (customer segment) are important. Therefore, it makes sense to start with the section on customer segments mentioned above. Contact points with potential customers depend on their characteristics. The service in a hair salon will be different from that in an online store. The starting point is to determine what kind of relationship buyers of your services or products expect.
This point also applies to so-called customer relationships (that is, relationships with existing customers). Maintaining relationships and post-sales support is often no less important than the sale itself. It is usually cheaper to retain a customer than to constantly strive to acquire new customers (cost structure).
Key resources (key resources) are tangible assets (physical resources) and intangible assets held by an entrepreneur. They can be financial resources, real estate, movable property, but also know-how, intangible assets or simply human resources (human resources).
This section is a plan of specific steps to be taken in connection with the launch of the business. It touches on the steps necessary to launch the business (task list) as well as the subsequent ongoing operational, marketing, sales tasks.
Key partners are those who influence the provision of the service or delivery of the products offered. They can be partners who influence the form of the value proposition for the customer. These are entities that help your company in various ways, such as subcontractors, suppliers or the company responsible for marketing strategy. Key partners can also be entities that enable sales - such as those with influence over your target audience.
In order to achieve profitability, it is important to achieve an appropriate level of revenue. As part of the canvas business model, it is worth considering the possibility of diversifying revenue streams - generating revenue in different ways. Diversified revenue streams (diversified revenue structure) usually allow for greater financial security.
The key to business planning is to properly estimate costs. This is usually easier than correctly indicating revenue levels. You will also gain confidence that you will be able to pay for the costs you need to cover.
This section is optional, and is not always included in the business model canvas. Given that you are probably planning to operate within the European Union, which places a premium on environmental protection, it is worth considering these aspects of the business as well. Both in terms of benefits and challenges.
This is also an optional element of the business model canvas. However, it is worth analyzing the impact of the project on social issues and the impact of the environment on the project. Among others, factors such as the local community, unemployment or
See an example of a completed business model canvas based on Well Done Business:
Business model canvas is also called Osterwalder's business model. It is described in Alexander Osterwalder's book titled Business model generation.
The two business models are, therefore, the same, and differ only in nomenclature. The presentation of the planned enterprise in this form has an added value compared to the traditional business plan. Namely, the business is presented in a clearer form. In addition, the execution of this type of business model is usually less labor-intensive than the development of a dozens-page business plan with a complicated financial model.
The canvas business model is particularly popular among startups and the VC investor industry. Its complement or alternative form is also sometimes known as a pitch deck, or investor presentation. This form of business planning is characterized by a different, innovative design approach and an emphasis on real value.
Lean canvas and business model canvas are two different methods that are used to design a business model for an enterprise, but they differ in several important aspects.
The business model canvas was developed by Alexander Osterwalder and is based on 9 elements: customer segments, value proposition, distribution channels, customer relationships, revenue sources, key resources, activities, partners and costs. This canvas assumes that the company already has an established value proposition and focuses on the remaining elements of the business model.
The lean canvas, on the other hand, was developed by Asha Maurya and focuses on key areas: customer segments, customer problem, value proposition, solutions, distribution channels, revenue strategy, costs, key metrics, market advantages. Unlike the business model canvas, the lean canvas assumes that a company is just creating its value proposition and focuses on the problem it is trying to solve and the needs of its potential customers.
In other words, business model canvas focuses on designing and optimizing a business model, while lean canvas is used to explore and test a new business idea before it is fully developed. In this way, lean canvas may be more suitable for start-ups or innovative projects, while business model canvas is more suitable for companies that already have an established value proposition and want to optimize their business model.
Below you will find an example of a completed lean canvas for a fictitious company that offers online training services:
Business model canvas is a tool that helps to design, analyze and describe business models. It is a graphical model showing the 9 key elements that make up the whole business.
These elements are: customer segmentation, value proposition, distribution channels, customer relationships, revenue sources, key resources, key activities, key partnerships and cost structure. The canvas model allows entrepreneurs to quickly and effectively identify what elements are critical to their business, what aspects need to be improved, and what opportunities are opening up for the future.
The canvas business model is very popular among startups and entrepreneurs who are looking for new business ideas or want to improve their existing business models. It is a flexible and easily modifiable tool, allowing it to be tailored to the specific needs of a particular business. The canvas model can help entrepreneurs understand how their business works, what exactly generates profits and what costs are involved in running the business.
In summary, the business model canvas is a tool that allows entrepreneurs to quickly analyze and design their business model, which in turn allows them to succeed in business by better understanding its key elements.