What is Business Model Generation Canvas?
Business Model Generation Canvas: Gone are the days when we used to spend sleepless working for weeks to create a 50 page business plan to show to investors just to get funding. Business plans are still necessary but the way how we structure and present it have changed. If you are okay with the traditional way of creating a 50 page business plan that’s fine. Keep in mind that there are now far more efficient ways of creating a business plan in less time.
For example the business model generation canvas is an effective framework. You can use to to easily create your business plan in less time. It can also make your business plan transparent by showing investors how you are going to make your business successful.
The business model generation canvas can also be used as a tool to help develop strategies within your organization.
The business model generation canvas has nine parts:
- Customer segments
- Cost structure
- Key partnerships
- Customer relationships
- Revenue streams
- Key activities
- Key resources
- Value proposition
Below you can see each part of the business model generation canvas being discussed in more detail:
This section of the business model canvas is where you analyze your customers and categorize them into different areas. This will allow you to create different value propositions for each segment so you can adapt to each segment needs.
The value proposition section all have to deal with the unique value that you are going to bring to each segment. You need to think critically about how you are going to make your product more valuable. This will make it seem more attractive to customers.
For the channels section, thinking about how you are going to deliver your product or service to customers is important. Communicating your product or service to customers and ensure that they can easily access your product or service is mainly what the channel section is about. When customers can easily access your product or service and find value in it. You can then reap all the benefits.
When thinking about the customer relationships. You must basically think about what kind of relationships your company is going to have with each customer segment. Having good relationships with customers can help build your brand and retain customers for the long term.
When looking at your revenue stream. Analyzing the present and future areas and opportunities where your company can generate revenue is another important task. Some persons even think this is the most important part of the canvas. To develop revenue streams you have to look at your different segments then come up with unique value propositions. These value propositions bring in new revenue stream depending on how well your strategy was executed.
Key resources are the necessary resources your company needs to make it successful. For some company, resources would be machines and equipment, materials, human resource etc. It all varies, but you need to look at your business specifically to see what kind of resources it needs to make it successful.
These are the most important operations and activities a company needs to do on daily to make it successful. Every business needs to do a set of activities to make it successful. As a business manager or executive you need to evaluate your company properly. You will then find insights to look at what activity and processes it’s lacking. In order for you to put the necessary changes in place so your company can become more successful.
Forming strategic alliances with other organizations inside and outside your market can be very crucial for your business success. You can form partnerships with competitors and non-competitors. These partnerships will then open up new opportunities and revenue streams for your business. In which you can take advantage of to make your business more successful.
The cost structure is the final part of the business model canvas. You are going to calculate all the cost it’s going to take to operate your business. This will help you to see which areas of your business model are incurring the most cost. This can help you to either develop strategies to make your business operate leaner or get more capital to grow your business. It will also help you develop a stable cost structure system.
The business model generation canvas can help you develop business plan. It can also help you to create frameworks to help you develop strategies to make your business operate better. This is a tool that is very common in the startup environment. It is also used worldwide in nonprofit organizations. That enabled them to put the necessary measures in place that will ensure that their business performs better.
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