Designing a business without a plan is a bit like navigating a new place without a map. It’s hard to know which road to follow and you’ll likely take a wrong turn or two. Luckily, there are tools to help you plot the pathway to business success. Introducing the Business Model Canvas: a creative compass that allows you to design, visualize, analyze, and describe your business.
The Business Model Canvas was created by Strategyzer, and is available free online, along with many other Strategyzer tools and resources. Get a downloadable copy of the canvas! It’s quick, visual, and innovative. By filling in just one page you will identify the crucial building blocks to your business.
The Building Blocks of the Canvas
There are nine building blocks which together make up the entirety of the canvas. These are:
- Customer Segments: For whom is value being created?
- Value Propositions: What value do you deliver?
- Channels: Through which channels do you reach your customers?
- Customer Relationships: How do you keep and attract customers?
- Revenue Streams: For what value are customers paying for or willing to pay?
- Key Resources: What key resources do your value propositions require?
- Key Activities: What key activities do your value propositions require?
- Key Partnerships: Who are your key partnerships?
- Cost Structure: What are the most important costs involved in your business model?
Take a look at the canvas above and draw a vertical line right down the middle. Notice anything? The canvas is cleverly set up so that the blocks on the left side describe the inputs to your business, while the blocks on the right side describe your product and customer relationships. You can think of this as the internal vs. external cogs. Underlying it all are the financial foundation blocks of your business. Your cost structure is displayed under inputs, and your revenues are found under the external components on the right.
Making the Canvas Work for You
Strategyzer recommends sketching the canvas on poster-sized paper and populating each section with sticky notes. This way you can effectively brainstorm and explore your options. You can think of the canvas as a continuously evolving draft, mapping ways forward at all the forks in the road.
Get Your Planning On
Examples of the Business Model Canvas at work can be found on Strategyzer. All you need to do is sign up for a free account! Stategyzer has also developed a tool to zoom into your value proposition, called the Value Proposition Canvas, which can be used in conjunction with your Business Model.
Whether you’re thinking of starting something new or already have an established enterprise, consider using the business model canvas to paint your pathway towards an innovative and successful business.
Connect with Meredith at Momentum!