What is a Business Model Canvas?
The Business Model Canvas (BMC) is a strategic management tool to quickly and easily define and communicate a business idea or concept. It is a one-page document which works through the fundamental elements of a business or product, structuring an idea in a coherent way.
Know its purpose
The BMC enables you to:
- Visualise and make your business idea easier to communicate
- Have a fuss-free and quick overview with only the necessary information
- Show the key relationships between different departments and segments
- Define your overall business to your team
Key Elements of a BMC
Created by Alexander Osterwalder and his professor, the BMC was made to replace the laboursome traditional business model designs. This is done by dividing the business idea or concept into 9 main segments:
- Key Partners — Who are your key partners or potential key partners of your business? Any potential strategic alliances you can form? Who are your primary suppliers and buyers?
- Key Activities — What should your company do to make your business model work? What do you need to do to keep your competitive advantage? Where does your budget get allocated to predominantly?
- Key Resources — What are the important resources you need for your business idea to take off? What are the key resources needed to make your business sustainable? What are some financial resources required? What about human resources?
- Value Propositions — What sets you apart from your competitors? Is your value proposition short and easy to understand? Do different customer segments require different value propositions?
- Customer Relationships — What strategies are you adopting to build relationships with your customers? Will any part of the process be automated? Will there be collaboration and co-creation?
- Channels — How does your company aim to deliver the value proposition? Which platforms should you use to raise awareness? Do you need additional channels to facilitate purchases? What about post-purchase support?
- Customer Segments — Who are you primarily creating value for? What are the customer segments that will receive and ultimately judge your value proposition?
- Cost Structure — What are your operational costs? What about overhead costs? Any costs required to upgrade?
- Revenue Stream — How do customers reward you for the value you provide? Do you have more than 1 revenue stream? What are the different revenue models?
It might seem intimidating to start, but with the right people, the right BMC template, and some writing materials and sticky notes, you can start working on your very own BMC.
Take the first step by downloading Kinobi’s BMC template here.