Running a business must include planning, but just simple planning is not enough. Have you ever heard about the Business Model Canvas? It’s one of the tools which will help you see the overall picture of your business. Also, it’ll lead you to the obvious way to develop and increase the chance of success in your business. In today’s article, we would like to introduce you to the Business Model Canvas.
Get to know Business Model Canvas
To run a professional business, the Business Model Canvas is one of aid in business planning, which is widely used for many organizations. Most companies use this model to collect critical data to analyze, plan, and assess potential risks in the future. Also, this canvas will help you continue your business of growth, and you can manage the business systematically.
The first one who proposed this model was Alexander Osterwalder in 2005. It consists of 9 blocks, and each block will help you see thoroughly the potential, strengths, weaknesses, etc.
Why Business Model Canvas is an ingenious weapon for entrepreneurs
Business Model Canvas is a great tool to help you run a business that allows you to look at your business clearly and makes your team or employees aware of business patterns and problems in the same direction. For this reason, the canvas model will lead to faster problem solving and brainstorming because you can see your strengths and weaknesses through this model.
Mostly, people usually plan and finish everything on a large sheet of canvas to be able to paste the post-it paper into it, which is convenient to edit and add-reduce information. As you can see, the Business Model Canvas is a rectangular template. The main topic is divided into 9 channels. Each area will help you see overview details in your business as follows.
The component of Business Model Canvas
1. WHO: It comprises customer segments, customer relationships, and channels.
- Customer segment is about defining your target customers. Try to answer ‘Which type of customers are you focusing on between mass or niche market?’ ‘What are problems that customers experience, and how will our products or services help solve them?’ This part emphasizes acknowledging customers’ behavior and finding the way to deliver the best product and service.
- Customer relationships are to build a good relationship with customers. When you create a positive first impression, and the customers feel trust, it can make them become your customer loyalty. There are many kinds of relationships with the customers in each business. The most common kinds can be classified into 4 points: personal assistants, self-services, automation services, community connected services.
- Channels are the way you sell your product or service, and how you communicate with the customers. For example, you should know which channels are the most convenient and most accessible to the customers? Moreover, effective communication, whether informing product information or giving advice to the customers is essential because it can help you grow your business faster. According to this, it can be categorized into 5 stages: awareness, evaluation, purchase, delivery, and after-sale.
2. WHAT: What is the dominant which will make the customers choose your product or service? This is the most essential question as you have to answer yourself. Why do the customers have to pay for us? What are the things that customers will get? This section allows you to find the value of your business in order to attract customers’ attention.
3. HOW: In this block, it’ll mention the overall picture of the performance back-end, and it includes 3 things:
- Key Partners: Partners are the group of people that you work with or relate to your business in order to enhance the quality of the business. In other words, having partners could help you save more time because you didn’t have to do everything all alone. Plus, it could help with diversification as you are not the only one who does a business.
- Key Activities: The main activities or performance that you have to do when running a business. It could be a simple thing, such as you’re running a coffee shop, your key activities included: making coffee, serving, or baking.
- Key Resource: The crucial resources which are necessary to your business, consists of: humans, finances, instruments, etc. In this block, you can divide into 2 segments, and write down the resources that you own and the resources that you need to have.
- Cost Structure
– 2 types of objective costs: First, capital for thriving businesses such as remunerations, water and electricity bills, and maintenance costs. Second, capital for adding value to businesses, such as advertisements, billboards, and press releases.
– 4 types of general costs: fixed cost, variable cost, economy of scale, and economy of scope.
- Revenue Streams: Your income often relates to these four channels, which are service fees from selling products, rent fees, and license fees.
Business Model Canvas is the best choice for running a business, especially startups who just start planning their business strategies or even large companies can use this canvas to improve or extend the old business model. Thus, it’s a model that is clear-cut, and easy to apply. We’re sure you will find your business more organized and systematic.
Our Get Unstuck Method also provides the Business Model Canvas analysis for the business owner, who doesn’t know where to start. Just contact us: https://www.helpyougetunstuck.com/
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