If you are a start-up or just a small business in its begins, we definitely recommend you the useful Business Model Canvas (BMC). The BMC facilitates the innovation, design thinking and brainstorming techniques. We can also say that its success is mainly in the simplicity and the usage of common language, even serving as a test of a business model.
Alexander Osterwalder created the BMC as a revolutionary planning tool that helps organizations to describe the key pieces of their business (Value Position, Customer Segments, Channels, Customer Relationships, Key Partners, Key Activities, Key Resources, Cost Statement, Revenue Stream) organized and connected from the key piece, Value Position, in just one page.
This “quick-business-model” format makes easier to identify customers’ requirements and understand organization situation and, consequently, it would be essential to gain and maintain customers’ loyalty while adding value for them resolving a problem or covering a need.
The mentioned nine blocks are identified as key business drivers that a company must have to get income, meaning that they actually represent the main areas of business and are under business owner control: offering (Value Proposition), customers (Customer Segments, Channels, Customer Relationship), infrastructure (Key Activities, Key Resources, Key Partners) and financial feasibility (cost structure and revenues stream).
The order of the nine components responds to the relationship established among the business pieces but always taking as main reference the Value Position in the center of the model.
Competition, problems or measurements might be considered external factors so these uncontrollable items are not included in the model in itself although, of course, the BMC is feed somehow with some information coming from outside. Per Alexander Osterwalder, the BMC is surrounded by what he called “The Business Model Design Environment” where we can find these aspects. I.e., regarding competition, in Osterwalder words, “Competition is, however, only one of several elements that are part of your Business Model Design Environment: the environment in which you design your business model…”.
any case, for the long-term it is recommended to use a business plan which provides all the required information about a company to have a long-term business tracking tool.
Diving through the example
But let us introduce an example of BMC for an hypothetic company called “Ecologic Sweet Cosmetics”:
- Osterwalder, Alexander (11/17/2015) “Osterwalder explaining the Business Model Canvas in 6 minutes”. YouTube https://www.youtube.com/watch?v=RpFiL-1TVLw
- Osterwalder, Alexander (05/14/2012) “Osterwalder explaining the Business Model Canvas”. YouTube. https://www.youtube.com/watch?v=RzkdJiax6Tw
- “Business Model Canvas. The 9 Building Blocks Explained”. YouTube. https://www.youtube.com/watch?v=LEq5Yx42fEE
- The Startup Hustle (10/10/2015) “How to Create a 1 Page Business Plan – Canvanizer + Business Model Canvas Tutorial”. YouTube. https://www.youtube.com/watch?v=Of34BmUUjIg
- Featherstone, Tony (Unknown publishing date) “Five big benefits of the Business Model Canvas”. ShortPress. http://www.shortpress.com.au/five-big-benefits-of-the-business-model-canvas
- Cowan, Alex (Unknown publishing date) “The 20 Minute Business Plan: Business Model Canvas Made Easy”. Cowan+. https://www.alexandercowan.com/business-model-canvas-templates/
- Osterwalder, Alexander (05/08/2012) “Competition Is NOT Part of Your Business Model”. Business Model Alchemist Blog. http://businessmodelalchemist.com/blog/2012/05/competition-is-not-part-of-your-business-model.html