The Business Model Canvas (BMC) comes out of the book “Business Model Generation,” written by Alex Osterwalder in 2008. I was introduced to the BMC concept in one of the entrepreneurship courses offered in my master’s program. My initial response to the BMC was very positive. The content was concise and methods were simple enough not understand and move through their
The BMC by Strategyzer can be downloaded on Strategyzer or my my personal Internet site or at the end of this blog. Alex Osterwalder (2015) reported the BMC is a practical tool that has been downloaded more than 5 million times internationally. There has been over 1 million books sold on the BMC topic, and more than 2,000 people trained and have the opportunity to disseminate to a more broad audience to the public. The BMC claims that 36% of the customers use the BMC of the time to development on an entirely new business, 21% applied to new products/services development within existing business, 19% as a strategic reorientation, and 15% to renovate the company’s old business model.
The canvas is broken down into nine (9) building blocks:
- Customer Segments
- Value Proposition
- Customer Relationships
- Revenue Streams
- Key Resources
- Activities Required
- Cost Structure
The customer segments are going to be your customers who you create value for. You will create value for them through your value proposition. Every customer segment will have its own value proposition. The third box is when you will find your channels, what you will deliver your value proposition through. This is how you will reach your customer, selling and delivering. For instance, you might go have an Internet channel, a storefront, a sales team, billboards, and any other way you reach the end-user. Customer relationship is what your business establishes with its customers. The cost is much higher to earn new customers than keep existing customers. The BMC looks at revenue streams and how you will be earning your money and what customers are willing to spend for your product or service. The Key Partners might be supplier, people or organizations that have key resources and activities. The remaining question looks at your business’s cost structure. Cost is anything you can think of both monetarily and with own sweat and energy.
After you download a copy of the BMC begin with your value proposition (you should have this already prepared if you read my previous blog post). Input your information as bullet points in the value proposition box. As you start working through your canvas it behooves me to say that all boxes should contain bullet points. You will notice that changes will occur as you paint your canvas and it will be easier to make any modifications to bullet points, rather than long drawn out paragraphs.
In my next few blog posts I will begin diving into the different areas of the canvas a little deeper. Take a few minutes watch the video below and start preparing for your canvas. The video came from Strategyzer’s YouTube channel. Thanks for your time and look for another blog post on Monday, February 23, 2015.
Will you use the #BusinessModelCanvas for your business?
Downloadable material: CLICK HERE