Turn Your Business Idea Into Reality with the Business Model Canvas
You’ve been thinking of a business idea for longer than you can remember, but you have no clue where to begin. How do you kickstart it and turn your idea into a reality? Well first, you have to answer a lot (and I mean a lot) of questions such as the purpose of your business, the value you will provide, your target audience and your method of closing sales. One great tool to help organize the many different building blocks of a viable business is a business model canvas.
Great questions! A business model canvas is split into 9 different sections which answer the who, what, why, and how of your business. Although it is a great starting point to organize the outline of your business, it can also be used throughout the progression of your startup to help organize the change of your company as it grows.
“The canvas is not meant to be a rigid document but rather a work in progress to be filled out, revised, and evolved.” — Mike Shoss, CSM
The Business Model Canvas is a perfect tool to use before, during and even after the launch of your startup to help keep the basic building blocks of your startup aligned.
How do I fill out a business model canvas?
Below are the 9 different categories in a BMC and what each one entails.
- Customer Segments
These are all the people or organizations in which you are creating value. This includes simple users and paying customers.
Example: Snapchat targets young people between the ages of 13 and 22, as well as advertisers and marketers.
2. Value Proposition
For each customer segment you have a specific value proposition. Theses are bundles of product and services that create value for your customer.
Example: Snapchat has self-destructing messages and unique filters to make your photos more fun and creative.
Are touch points through which you’re interacting with customers and delivering value.
Example: Snapchat uses online media channels, the app store and celebrities.
4. Customer Relationships
These outline the type of relationships you are establishing with your customer.
Example: Snapchat creates a fun and friendly relationship with it’s customers.
5. Revenue Streams
These make clear how and through which pricing mechanisms your business model is capturing value.
Example: Snapchat generates revenue through custom geofilters and in app stories.
6. Key Activities
Show which things you really need to be able to perform well.
Example: Snapchat focuses on a platform for users to share their unique days.
7. Key Resources
Describes the infrastructure to create, deliver and capture value. This shows what assets are indispensable in your business model.
Example: Snapchat’s main resources are lenses and geofilters.
8. Key Partners
Who can help you leverage your business model.
Example: Snapchat’s key partners are publishers, media companies, and Bitstrips.
9. Cost Structure
Once you understand the infrastructure, you will be able to determine the cost structure.
Example: Snapchat’s cost structure includes app development, Board of Directors, staff, and salary.
I’m sold, now how do I start?
If you’re ready to start using a business model canvas, getting a hold of one is as simple as doing a quick google search. Choose the canvas that makes the most sense for you, sit down, and start writing. Get it as messy or keep it as organized as you like. It’s a reflection of your business which is a reflection of you, so make it personal. Use the completed model as a reference as you continue to build your company. Remember, it’s meant to be updated and changed so make sure you always keep it in your entrepreneurial toolkit!
Written by Aisha Chaudhry