What is a Canvas Business Model?
The Canvas Business model is a strategic management tool used to define and communicate a business idea quickly.
The model presents a visual chart with its right side focusing on the customer (external) while its left focuses on the business itself (internal). These factors meet the value proposition of the exchange of value between your business and your customer.
Below is a sample chart
Talk about the lists of other external companies or parties you may need to achieve your key activities and deliver value to the customer. Who else do you need to rely on to deliver value to your customers?’.
An example is ‘if you sell pork to customers, you may need a local pig farmer to supply fresh pork to your store.’
The farmer becomes a key partner to achieve the value the business promises to the customer.
What are your activities?
Is it monitoring? Education and Training? Production, Farm management. The Key activities of your business are the actions that your business performs to achieve the value proposition for your customers.
What practical resources are needed to achieve the key activities of the business model? What key resources are you using to provide your products or services for your business model?
These resources are what is needed practically to undertake the action/activities of your business:
- Office space
- People (staff)
- Internet connectivity
Talk about the value you intend to provide to your customer. What are you going to offer differently that the customer should pay for? Is it quality?, accessibility?, or Higher service standards?
Talk about what the relationship with your customer is for the business model. Will, you be competent, reliable, available, etc.?. Will you interact with your customer?
Who are you targeting? Who is primarily going to be your customers?
Restaurants?, Schools?, Students?, Hospitals?
On what platform are you communicating with your customers? How are you marketing your products?. Channels are the avenues through which your customer comes into contact with your business and becomes part of your sales cycle. It can be through;
- Social media
- Email marketing
- Text messages
- Viral marketing
- Promotions and sales for commissions
The cost structure is the monetary cost of operating as a business.
What costs are involved in achieving the business’s key activities?
What are the costs of your key resources and key partnerships?
How much does it cost to achieve the value proposition for your customers?
Additional costs to running a business?
Some legal costs?
What is the cost of your business?
How are the inflows coming?
Do customers pay with cash? Is the money paid for the product?
The Revenue Streams are the ways by which your business converts your Value Proposition or solution to the customer’s problem into some financial gain.
It is also vital to understand pricing your business in response to the pain of purchase in exchange for solving the problem for your customer.
There are several revenue models, including the below;
- Pay per product
- Fee for service
The Whiteboard, Butcher’s Paper, Google Slides, etc., can be used to prepare the business model canvas.