When you have a business idea, it is always great to go to the basics and lay your idea out on a Business Model Canvas (BMC). It can be done quickly in 20 minutes, is easily absorbed by any reader and a good reference material for when you discuss your ideas with your partners.
The BMC was an invention by Grand Master Alexander Osterwalder who also created the Value Proposition Canvas, which I would cover in another blog entry. Since then, his BMC has been the tool for quickly visualising of many business ideas. I cannot imagine how many businesses has sprung from his canvas! Thank you Alex!
Why use the Business Model Canvas?
For those wanting to launch a new business idea, the BMC helps you complete your idea into a wholesome business and may point out any holes in your initial thoughts.
For those already running a business, the BMC can be used to visualise snapshots of your current and target operations, helping you draw the line between the two points, so that you can have actionable takeaways upon the BMCs analysis.
What is the Business Model Canvas
The BMC is segmented into nine sections which form the building blocks for the business model in a nice one-page canvas. The goal is here is to fill up all sections of the BMC, and by doing that you will have a full picture of your business idea. The nine sections are:
- Value Proposition: What is the core value your are providing to your customers?
- Customer Segment: To whom are you providing the core values?
- Customer Relationship: How is your engagement and relationship with your customers?
- Channels: Via what medium or tools are you providing engagement and maintaining the relationship?
- Key Activities: What do you do operationally to provide the core values to your customers?
- Key Resources: What do you need in-house that is used to implement the key activities?
- Key Partners: What are you not able to do or find in-house and to whom do you need to outsource those key activities to?
- Cost Structure: From your key resources and partners, what are the costs incurred?
- Revenue Streams: From your channels and customer relationship, at what points of the relationship do you generate revenue?
Important Note!
When you want to start filling up a BMC, always begin with either your Value Proposition, or your Customer Segment. This could be a matter of philosophy, but I believe that a business is only considered a proper business when it provides the right value to the right customers. The customers you are targeting must find value in what your business is providing. If your business is providing real value to the wrong customers OR providing no value to real customers, then it is not a proper business.
The whole business idea stands on this paired factors. You must make sure that they synergise and resonate with one another.
Write your own BMC today!
Have a business idea in mind? Write it out on your own BMC. It would only take 20 minutes!
You can download the original Strategyzer’s Business Model Canvas template from here, OR, you can access my Google Slide version of the BMC here.
Once you have attempted your own BMC, share your BMC with me at ruizasri@gmail.com!
I will be happy to review your BMC and develop your business idea further. Maybe we can even have a quick chat? Setup a call with me here.
Peace,
Ruiz