Business Model Canvas Explained
Use this tool to quickly and easily define and communicate a business idea.
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 that works through the fundamental elements of a business or product, structuring an idea in a coherent way.
The right side of the BMC focuses on the customer (external), while, the left side of the canvas focuses on the business (internal).
Both external and internal factors meet around the value proposition, which is the exchange of value between your business and your customer/clients.
Why we use it
- To quickly draw a picture of what the idea entails.
- It allows us to get an understanding of your business and to go through the process of making connections between what your idea is and how to make it into a business
- It looks at what kinds of customer decisions influence the use of your systems.
- It allows everyone to get a clear idea of what the business will likely be.
How to use it
Value Proposition: The Value Proposition is foundational to any business/product
Customer Segments: Customer Segmenting is the practice of dividing a customer base into groups of individuals that are similar in specific ways, such as age, gender, interests, and spending habits.
Customer Relationships: Customer Relationships are defined as how a business interacts with its customers.
Channels: Channels are defined as the avenues through which your customer comes into contact with your business and becomes part of your sales cycle.
Key Activities: The Key Activities of your business/product are the actions that your business undertakes to achieve the value proposition for your customers.
Key Resources: Key means the resources your business requires to do business.
Key Partners: Key Partners are a list of other external companies/suppliers/parties you may need to achieve your key activities and deliver value to the customer.
Cost Structures: Your business cost structure is defined as the monetary cost of operating as a business.
Revenue Streams: Revenue Streams are defined as the way by which your business converts your Value Proposition or solution to the customer’s problem into financial gain.
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