by Tom Mock
The Business Model Canvas (BMC) is an entrepreneurial tool that enables you to visualize, design, and reinvent your business model. Swiss business theorist and author Alexander Osterwalder developed it. The BMC is a visual way of identifying key elements of your business and how they relate. Using the BMC, you can develop a clear view of your value proposition, operations, customers, and finances. As a small business owner, you can use it to identify target market segments and how to appeal to those segments. That’s powerful when deciding where you need to focus your time and attention as you start and grow your business.
The Business Model Canvas has nine different areas of focus that make up building blocks in a visual representation of your business.
- Key Partners—Who are the buyers and suppliers you need to form relationships with? What other alliances will help you accomplish core business activities and fulfill your value proposition to customers?
- Key Activities—What are the most important activities you must engage in to fulfill your value propositions, to secure distribution channels, to strengthen customer relationships, to optimize revenue streams, etc.?
- Key Resources—What resources do you need to create value for your customers and sustain your business?
- Value Propositions—What products and services will you offer to meet the needs of your customers? How will your business be different from your competition? What challenges will you solve for your customers?
- Customer Relationships—What types of relationships will you forge with your customer segments? What are the relationship expectations of each customer segment? How are they entwined with the rest of your business model?
- Customer Segments—What sets of customers will you serve? Which are most important to your business?
- Channels—Through what means will you reach your targeted customers and deliver your products and services to them? Which are most cost effective? How are the channels integrated?
- Cost Structure—What are the key costs your business will face? Which resources will cost the most? Which activities will cost the most?
- Revenue Streams—How much will you charge for your products and services? What are customers willing to pay for? How will customers pay? How much will each revenue stream contribute to your overall revenue?
Asheville SCORE is now offering a workshop on using the BMC. We began offering it because we found that many business owners are so consumed with the day-to-day issues of running a business that they don’t spend enough time on strategy and business planning. They are often overwhelmed with all the elements of a business plan and they have a hard time deciding where to start. The BMC creates an overarching framework for developing a business strategy, a detailed business plan, and/or a prioritized action plan.
About the Author
Tom Mock is a SCORE volunteer mentor. SCORE is a nonprofit organization whose volunteers provide free, confidential business mentoring and training workshops to small business owners.
To learn more about business issues or make an appointment with a volunteer mentor, contact asheville.score.org.