Canvas Business Model
- January 31, 2019
- Posted by: Esteban
- Category: Business plans, Grow your Business, Start-Up
The Canvas business model, is an essential tool often used by consultants when we want to understand how a company and its ecosystem work.
When entrepreneurs have an idea and want to transform it to a start-up or if we are managing a small business, it is common that we spend most of our time in several tasks wasting time and money before analysing the big picture of our business and making decisions with a strategic mindset and significant impact. For instance, most people when decide to start a business they immediately want to create a brand, logo and name. However, although this will be important in the future does not necessary have to be the first step and resources, such as time and money, should be spent in analysing the feasibility of the business.
Sometimes, due to lack of time or knowledge, we forget the importance of having a clear business model that explains how are we going to make a profit and be sustainable and what makes us different to our competitors.
Fortunately, there is a solution to build and review our business model in a short, simple way that we can monitor and adapt constantly. We can even have it in our desk or stick to the wall so we never forget how are we going to achieve the goals that we have set.
This tools aims to interrelate basic aspects of a business, easily describing each component in a prestructured canvas compound of nine building boxes:
In this box we aim to narrow our market and target our group of potential customers. There are different processes to define our segments such as defining a ‘market segment profile’.
For this section, we must have a clear idea of what makes us different from our competitors and what features and benefits of our product or service create value to our customers.
This box describes the touchpoints that are interacting with customers and delivering value. The touchpoints can be seen in different moments such as attracting customers or maintaining; distribution channels (direct or indirect sales); physical or web/mobile channels…
There are different relationships that can be established depending on the type of business. Some examples are: personal assistance, self-service or automated services.
This box represents the way that a company generates income and captures value in order to be sustainable. There are different streams such as sales, subscriptions, leasing or renting assets, advertising fees…
You need to describe the infrastructure to create, deliver and capture value. This resources can be categorized in: Physical, Intellectual, Human and Financial.
This box shows which processes will be the most important in order to perform well. Some of the criteria can be for example: product design, development or delivery, platforms or after sale service.
Our key partners should help us leverage our business model. Therefore, we must have a clear knowledge from the beginning of who they are and how will they help us. This could be providers or partners that will perform any key activity of the business.
After understanding and answering all the previous boxes you will have a clear business model infrastructure and this will give you a closer cost structure, knowing what resources and activities are core of the business, what other activities could be outsourced or avoided.
Having mapped all the building boxes you can have a complete perspective of your business model in one image and you can track, update and rethink this model constantly in an easier and fastest way. We encourage you, as an entrepreneur or small business manager, to download the template and try to fill the nine building boxes. If you have any doubt do not hesitate in contacting us and we can help you through a free consultation.