How to write a business model canvas
How to write a business model canvas
In a previous article, I told you about some of the important terminologies in the business space and why it is important to be familiar with them. Business Model Canvas (BMC) is one of the most important business terminologies that you need to get familiar with as a business person who wants to be distinguished in the business space. So, in this article, we will be together, looking at what a business model canvas is all about and to write or create one. Are you ready for this? Okay, let’s go!
What is a Business Model Canvas?
A business model canvas is an excellent tool for describing, presenting and communicating a business idea or concept in a graphical and visual way. It is usually a one paged document that uses diagram and graphical elements to present or describe and idea and how it is expected to work and/or make profit. The business model canvas is usally referred to as the one page business plan. If well done, a business model canvas can be used to develop a very effective business plan that will be a rocksolid foundation for a thriving business. The business model canvas helps an entrepreneur think through the many stages of a business and the many elements that make a business successful by simply answering some direct, non-complicated questions which any layman can deal with.
While a business plan may be a bit complex to deal with for most people, professional business plan writers can use the business model canvas to elicit important information from the business owners by getting them to provide simple answers to some of the most basic questions that a business model canvas asks.
Elements of a business model canvas
When writing or designing a business model canvas, the following elements are very important to keep in mind. Each one of them work together coherently to help a business owner gain clarity of an idea and to determine whether or not the idea will be viable or not. Let’s consider the elements of a business model canvas as follows:
- Value propositions
- Key partners
- Key activities
- Key resources
- Customer relationships
- Cost structure
- Channels
- Customer segments
- Revenue streams
A Business Model Canvas
How to write a business model canvas
How to write a business model canvas
Writing the business model canvas is as simple as “A-B-C”. The truth is that when there is a need for you to create a business model canvas for your business, there are millions of templates online that you can use as guide, so you don’t have to create anything from scratch. These templates are already made to elicit from you, important information that will provide answers to the questions that each component of the business model canvas seeks to address. The most important thing in developing a business model canvas for you idea or concept is your understanding of each compnents of the BMC and what each of them requires from you in terms of the information to be provided. Once you understand what information you are required to input under each of the 9 components, you will be able to create a business model canvas that gives clarity to your business ideas and concepts and it will also help you see how these 9 elements are connected and how you are to make them work together to achieve your business objectives. So, let’s look at each components of the BMC and broaden our understanding of what information is to be supplied under each one of them. Don’t forget, we are still trying to answer the question of how to write a business model canvas.
- Value proposition
In clear terms, the value proposition segment of a business model canvas is simply asking you the following questions:
- What is unique about your product or service, and why should customers buy and use it?
- Why should anyone care?
- Why should customers prefer yours above those of competitors?
- What happiness will customers derive from using your product or service?
Make sure you write these statements in simple but powerful and compelling language. If possible, find a way to compress all your answers to the questions above into a single sentence which is both powerful and compelling as we have rightly said.
- Key partners or partnerships
There is two or more questions to answer here. These questions may generate multiple answers as well. And here is the question: What are the things that your business need but cannot do by itself (or should not focus on because it is not your area of strength), but you can get others to do for you – more like the things you can outsource? Then the next question will be: Who are the people (individuals or businesses) who can take care of such aspect for you. One you get this sorted, then your business can leverage on the strength of another in the areas that it is weak so it can focus on its area of strength.
- Key activities
Here, we attempt to answer the question: What are the must-do activities that actually helps the business deliver on it’s value proposition? If you are dealing with an idea that originated from you, it should also be easy for you to identify these activities that will be involved in creating that reality.
- Key resources
In this segment, the most important question to answer would be: What are the most important assets (or resources) that the business must have to function effectively as it attempt to deliver its value proposition and serve its customers? These might be people, equipment, office space, raw materials, funds, etc.
How to write a business model canvas
- Customer relationships
This section of the business model canvas is usually a bit more complex than it seems on the surface, and the depth of thought you personally bring into answering the singular question that this section is asking will determine the robustness of what you come up with – and that will also go a long way to determine the effectiveness and the efficiency of your business operations. So what question is being asked here? The simple question is: What will your relationship with customers (or the day to day interactions of customers with your business) look like? The question both sounds and looks simple, right? Yeah, I know, but depending on your kind of business, your industry, the technologies you use, the caliber of customers your business wants to target, and many other factors – and of course, like I said before, the depth of thoughtfulness, experience and expertise you bring to the table – will all affect how robust what you come up with here will be.
Read Also: Business Plan Parts and Outline Breakdown
- Cost structure
Here, we are attempting to answer the question: What are the expenses involved in the delivery of your value proposition, and how do these costs compare with your revenue and profitability. Put differently, after counting the costs involved, and juxtaposing it with your best sales projection, how does the whole thing look in the end in terms of profitability? By far, this is one quick way to determine the viability of an idea.
- Channels
Let me try to simplify this part for you by putting the question it attempts to answer in this way: How will your value proposition (which we have already determined) be promoted (i.e. how will you get the word out so people know what you are selling), sold and delivered? This is another techy part of your business model canvas but until you have it all figured out, you cannot have a viable business.
- Customer segment
This part sounds rather simple, right. I think so too. What question are we to answer here? Who are your customers? Trust me, that question is loaded and preganant and it is not as simple or straight forward as you might think! Let me break it down a bit because that singular question can translate into many things: Who are your customers? Where do they live or where can they be found? How do they think? Can they afford your product? Do they really need it – or do you have a means to convince them they do? What has been their history and buying patterns. This aspect of your BMC usually require some thorough research as whatever you are using as a basis for your conclusions here must not be assumptions, lest your business fails woefully.
- Revenue streams
In this part, you are expected to answer the question, How will this business idea make money? In answering that, you cannot afford to be narrow minded. You have to broaden your thinking and see if there are more than one way – or mulitiple ways – of making money from a single business idea. The more revenue streams, the more profitable the venture will be.
If you need a service of a Professional Business plan writer, then Dayo Adetiloye Business Hub is the place to go Call or WhatsApp us now on 081 0563 6015, 080 7635 9735, 08113205312 or send an email to dayohub@gmail.com and we will solve any of your business plan problems.
Hope you enjoy this article?
Share your thoughts in the comment session.
Contact us today for your business consultancy and business advisory services. We can help you fine-tune your idea, structure your business, market your business, train your staff, consult on your retirement plan, coach you for financial success. We also write a business plan and help with fundraising strategies and Grant applications. We can help you start, grow, and expand your business.
Call or WhatsApp us now on 081 0563 6015, 080 7635 9735, 08113205312 or send an email to dayohub@gmail.com and we will solve any of your business problems.
Related