The Business Model Canvas (BMC) tool which helps to map existing business models, improve them and invent new ones. It has 9 building blocks, each of which is described in detail and using real life examples:
Customer segments– The BMC itself has two stages – the front stage and the back stage. The front stage is the part of the business that is directly facing the customer. The back stage is everything that the company needs to have or do in order to provide the right half.
Value propositions– The main purpose of value proposition is to solve a customer problem or satisfy a need. It is a bundle of benefits that a company offers customers.
Customer relationships– It describes the types of relationships a company establishes with specific customer segments.
Channels– It describes how the company communicates with and reaches its Customer Segments to deliver a Value proposition. The main question to answer when filling out this building block is: “Through which Channels do our Customer Segments want to be reached?“
Key resources– It describes the most important assets required to make a business model work. The main questions to answer when writing this building block are: “What Key resources do our Value Propositions require?”
Key activities– It describes the most important things a company must do to make its business model work. In this building block, the main questions to answer are: “What Key Activities do our Value Propositions require?“
Key partnerships– It describes the network of suppliers and partners that make the business model work. The main questions to be answered are: “Who are our Key Partners?“,
Cost structure– It describes all costs incurred to operate a business model. The questions to be answered in this building block include: “What are the most important costs inherent in our business model?“
Revenue streams– It represents the cash a company generates from each Customer Segment (costs must be subtracted from revenues to create earnings). Main questions to answer include: “For what value are our customers really willing to pay?“
After taking a brief look at the 9 blocks that make the Business Model Canvas, here below you can find a description of what you need this for.
A business model describes the rationale of how an organization creates, delivers and captures value. A Business Model Canvas (BMC) is a tool to help map existing business models, improve them and invent new ones. It will lead to insights about the customers the entrepreneur plans on serving, what value propositions are offered through what channels and how the company makes money. It gathers all necessary information about the product and business and conveniently puts it on one page.
Analysis
This article was interesting to me because I found it extremely useful in putting together a business model. It makes it simple and to the point and allows you to organize all information into one cohesive visual. While I am unsure of what my project’s business plan will consist of yet, I think from this article I can take away what the crucial aspects of a business plan are and how I can consider and organize them for my own business plan.
Take-Aways
A structured business plan model can help keep you organized and be taken seriously by other professionals in the field
