The business model canvas is a management and entrepreneurial tool, developed by Strategyzer.com. In comparison with the traditional business plan, this tool allows one entrepreneur to express his / her business idea in just one page – the canvas:
The business model canvas should be used as following:
- The entrepreneur should think to the customers he / she wants to serve (customer segments). Try to identify the all groups / segments your business could reach to through the products you want to sell, but also through the key resources and partnerships you might need, and the key activities you want to develop.
- Now, start with the first group (segment) of clients.
- Think what you can provide to these clients (services, products, relations, etc.), so think to what is your value proposition for them; what is the value you can bring in their life.
- Then, decide on how you can provide the value, through what channels; how your products / services get to your customers.
- These type of channels, and the type of values you proposed make you to decide what kind of relationship (customer relationships) you want to establish with your customers (direct, indirect, online, face to face etc.).
- Then, you need to make decisions in regards to the price you put on your products, and on the mechanism you are going to use for being paid by your customers (revenue streams); what and how this specific segment of customers will pay for the products / services they receive; what kind of discounts / offers you might provide, etc.
- You should think now to the resources you will need to create, deliver and capture value for your clients and for your business (key resources). These could be financial resources, human resources, infrastructure for production and selling your products, etc.
- Then, you need to decide what will be the main activities you need to conduct in order to create and deliver the value (products, services, relations, etc.) you promised to your segment of customers (key activities).
- In order to get to the key resources, and perform the key activities, you will definitely need some partners (suppliers, public authorities, business partners, etc.). These partners could represent one of the next customer segments your company might have.
- Finally, define your costs (fixed and variable) for running the business, and try to identify the specific costs you have for delivery value to the specific customers segment you selected.
- When you finish with one customers segment, you should continue the planning with the following segment of customer, starting from the value you want to provide them. You might see how roles changes from one segment of customers to other… a type of customer could become a partner in delivering value for another type of customer of the organization.
The business model canvas can also be used in planning a project, or an activity, or an event. It is a planning tool, while serving both for management and entrepreneurship goals.