To all of us who like the world of entrepreneurship, the importance of the business model may be obvious to us.
Obviously, the basis of any business project is to have, from the beginning, clear ideas about what the company is going to be and how things are going to be done.
Although it is not always easy.
Therefore, in today’s article, we are going to talk about a very useful and novel tool: the Business Model Canvas.
What is the Business Model Canvas?
Business plans have always had a major drawback: it is very difficult to guess the future. And more in these times. In them, thoughtful analyzes, calculations, projections, x-year estimates, etc. are carried out, and then transferred to tens and tens of pages.
An enormous effort and expense of resources that, in most cases, end up on a shelf filling with dust because reality insists on contradicting them.
The Business Model Canvas constitutes a new approach to developing business models, a visual tool for their modeling.
Using this tool, what is generated is a document that represents the company as if it were a painting painted on a canvas and that involves analyzing all those critical points of the business.
With it, it is intended, among other objectives:
Develop a suitable business model
Innovate or improve value propositions
Make a suitable selection of market segments
Build relationships with customers
Define key resources
Build communication and distribution channels
This tool allows for a kind of brainstorming, allowing in turn to get a clear idea of how the business idea can work as a whole. We can also unlimitedly modify aspects of our initial idea that do not work, allowing the business idea to evolve. The Business Model Canvas has nine blocks. Here they are:
The different types of clients to whom the offer is directed will be included, classifying them according to their needs, how to access them, profitability, etc., among others. They form the basis of the business so their knowledge is important.
At this point, the value created for the customer segment identified in the previous point is defined. This may be one of the most important to the extent that the proposal must be differential and create a competitive advantage for the company.
This block deals with the aspect related to how we are going to deliver or deliver our value proposition to each customer segment.
Relationships with customers
This is another key aspect and determines what type of relationship is going to have with customers, whether it will be personalized, contact center, through Web portals, automated, etc.
We will identify how and where our returns will come from, which will fundamentally be through income via monetary flows. In general, at this point, most companies tend to adopt a fairly conservative and traditional stance, despite the fact that there are several ways to generate income, almost always opting for direct selling.
Whenever it is intended to bring a proposal to the market, it is necessary to carry out a series of activities. The most obvious: consumption. That is, the necessary resources (human, equipment, technology, licenses, financial, etc.) to make the business model work.
They are the main activities that must be carried out, by using the resources of the previous point, to produce the value offer and manage customer relationships. These are internal activities that mainly encompass the production and marketing processes.
At this point, the necessary alliances will be defined to execute the business model with the necessary guarantees, thus complementing the own capabilities, in such a way that the value proposition offered is enhanced.
The objective of this point is to shape the cost structure of the company, knowing and optimizing fixed and variable costs, and taking advantage of economies of scale.
For all the above, we can say that the Business Model Canvas is one of the star tools within strategic innovation, business model design and entrepreneurship.