So you have a business idea? You can enhance this by using a business model canvas. This will allow you to think differently about your business. It gets you thinking on the key elements of your business. Doing this exercise is very helpful in getting to know what you need to do next. Using the business canvas map gives you an overview of the items you need to plan for. It also makes communication easier.
Excellent framework for business strategy
We like to use this business framework. It enables you to think about your business faster. It also maps your whole business on 1 A-4 size paper instead of a large stack of papers. (tip: print out this canvas on a A3 or even bigger on your wall and add comments on post-its). This hugely saves you time. After this exercise, still you need to do a business plan, which becomes way easier by doing this exercise first.
The origins of the business model canvas
The business model canvas was created by Osterwalder and Pigneur in 2010 and has been used extensively since in business strategy. This scheme is derived from Osterwalder and Pigneur and provides you with insight into the different aspects that determine the overall structure of your company, such as primary partners, cost flows, etc.
Key Elements of the businessmodel canvas
Who are your primary partners?
Who are your primary suppliers?
What resources do you get from your suppliers?
What activities do your primary partners carry
Which core activities are necessary for the value proposition?
What are the most important resources needed to ensure that the business model works?
What value is created for specific customer segments?
What kind of relationships do you deal with specific customer segments?
What are the different types of groups of people or organizations that you want to serve with your company?
Through which channels your company communicates with specific customer segments a value.
What costs must be incurred to make the business model work?
What income does your company generate from the various activities and customer segments?
Start with the value proposition first. Describe: what do you offer, what is the customers pain, what problems are you trying to solve and how do you provide the solution, which elements does it have? Then you have a part of the value proposition. Then check for a high price range (quality) or low price range (volume). Then work to the other fields.
Segments are relevant, because your solution could be different for different customer segments. Think for example of demographics of customers (women /men, or age groups), or segments like large or small organizations. The cost / revenue part is the basis of your profitability. Then fill in all the fields and improve.
After creating your business canvas, you see you could have multiple versions. This is the hard part. How to choose the right one? You ask your potential customers what they think of this. That’s called business model validation.Read more on how to get customers for testing out your startup idea.
Tip: Print your business model canvas out on A3/A2 size in your work area. Hang it on your wall. Then you could have a map on where to go. This also helps keeping focus as you move on.
That’s it. Good luck!
Do you need the original and more in depth approach? You could order the book here.