How To: Business Model Canvas

What is a Business Model Canvas?

Unlike an ordinary business plan, a business model canvas allows you to generate a quick overview of your decision to start up your own company. On a basic level, this model really helps you to clearly understand and organise the different stages of your company formation project in order to generate the most value possible.

Not only will you be able to understand both your project and its surrounding issues more quickly and in a more efficient manner. But in addition to this, you will find it much easier to communicate your project and ideas to potential investors, partners and clients.

However, this “canvas” model is not a simple, lifeless document. It’s format is one that really develops and grows alongside your business. It will continue to aid you as an entrepreneur throughout the life of your company.

How Should You Organise a Business Model Canvas?

The model is structured around 9 logical steps: these allow us to clearly see how the company’s value is both produced and then distributed.

Value Proposition (la imagen tiene un error. “which customer needs are we satisfying?”)

This step is essential to a business model canvas since it allows you to provide a clear and precise description of your company for the client. This should, in term, determine the value produced by the company. This value depends on various things such as design, quality, performance, innovation, price, etc.

The challenge here is to find a balance between these factors in order to generate the best value proposition possible.

Client Sector

This step aims to find which client sector is the most important for the company.

Channels (How are our channels integrated?)

This step could also be labelled as the “distribution network”. It is an essential stage in linking your value proposition with your client sector. Due to this, the most important thing to know here is how to meet these distributive channel expectations: which is the most effective, how to reach the client, etc.

Remember to have enough perspective to measure the efficiency of your chosen channels and to adapt them along the way to work to their best capacity.

Customer relationships (La imagentiene un error. “How costly are they?” “Do segments expect us to establish and maintain them?”)

The relationship that you choose to maintain with your clients can act as a real advantage when compared to your competition. The important thing to remmeber here is to integrate this into your business plan and to calculate the financial input to carry it out.

Key Activities

This stage will allow you to determine exactly what type of business activity your business must engage in to match your previously stated value proposition.

Key Partners

Similar to your customer relationships, you will need to decide what type of relationsip you would like to have with your partners: how to choose them, how to get to know them, their resources, how they work, etc.

Key Resources

This step is to determine exactly what the company needs in order to carry out its business properly.

Structural Costs

This stage is to determine what the biggest cost in the company will be: which resource and which stage of business will be the most expensive.

Revenue Streams

Similar to structural costs, revenue streams will inform you of how much each client is willing to pay, for which value proposition they are paying, how they would prefer to pay and which revenue streams will contribute to the overall income.