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What is a Business Model Canvas?

Developing and writing down a new business model from scratch is a complex task. Where do you start? How do you even write something like that? There is a danger of getting lost in the details or forgetting essential aspects of the future company. You can quickly feel overwhelmed. This is where the Business Model Canvas comes into play.

During the development of a new product, there are usually many ideas floating around. These are often scattered on loose pieces of paper, on bulletin boards or simply in the heads of the people involved. In order to bring all these ideas and approaches into a compact form, the BMC is very well suited. Through the systematic approach, you can very quickly see whether your own business model makes sense and has been thought through to the end.

Developing a new Business Model
Business model development is complex - Unsplash

The Business Model Canvas is a method for the development and to visualize your business idea. The framework was 2008 by Alexander Osterwalder as part of his doctoral thesis and has become a popular and is now a popular and recognized method for the systematic development of business models. The Business Model Canvas provides guidance, structure and a simplified process in developing a clear business model. The Canvas fits on a simple sheet of paper and contains at the end all the information necessary to get a good overview of the business model.

Hint:
The Canvas was further elaborated by Alexander Osterwalder together with Yves Pigneur and published in 2011 as the book “Business Model Generation: A Handbook for Visionaries, Game Changers and Challengers”.

The 9 Fields of the Business Model Canvas

The Canvas consists of 9 fields, which are arranged in a grid. in a grid. By filling in these 9 fields, you get a good overview of what your a good overview of what your business is going to be, who will use your product, why they want to use it, what the costs are, and how you can make money… with it.

Image of the Business Model Canvas Grid
The Business Model Canvas

The 9 building blocks 1

  • Customer segments: Who will use the product? Who are the most important customers?
  • Value proposition: What problems of our customers do we help to solve?
  • Revenue streams: How will your business make money?
  • Cost structure: What are the main costs associated with the business model? (Salaries, rents, utilities…).
  • Channels: How do we reach our customers?
  • Customer Relationships: How do you win? How do you keep customers?
  • Key partners: Who are your main partners and main suppliers? Which companies are involved in the development?
  • Key Activities: What are the most important things you need to do to bring this product to market?
  • Key Resources: What staff, materials, intellectual resources, and budget does the organization have or need?
  • Because of its simplicity! The charm of the Business Model Canvas is that it is limited to a single page and it is not a several dozen page document that is difficult to read. This makes it much easier to evaluate existing business models or come up with new ideas.2

The Business Model Canvas breaks down the complexity of an organization so that it can be understood by all stakeholders and the relationships can be presented in a simple, memorable and intuitive way.

  • Common language Additionally, the Business Model Canvas allows you to communicate and share your ideas more easily. The Canvas creates a common language without which it is difficult to specifically challenge assumptions about your own business and innovate successfully.1

  • Teamwork & fast iteration The Business Model Canvas is particularly suitable for teamwork. Whether you work with post-its and highlighters on a printed on a printed Business Model Canvas or with a digital version, there are no limits to your creativity. The designs can be quickly adapted and changed because all the important factors are constantly present in the team. As a result, this type of idea collection usually yields more effective and creative concepts than a traditional, lengthy business plan.3.

More about this in the main article: The advantages of the Business Model Canvas

Teamwork with the Business Model Canvas
The Business Model Canvas facilitates teamwork

For whom is the Business Model Canvas suitable?

Basically, this method is suitable for every company. The BMC works for startups as well as for product managers and CEOs of a large company. Even public institutions or universities can use the BMC to model and explain their products and projects. The Business Model Canvas is very versatile, but it is especially effective when several people need to agree on a common understanding of how to build and develop a business model.4

References

Footnotes

  1. What is the Business Model Canvas (BMC)? - https://www.strategyzer.com ↩ ↩2

  2. The 9-Step Business Model Canvas Explained (2022 Update) - https://www.thepowermba.com ↩

  3. Business Model Canvas: Für das ideale Geschäftskonzept - https://www.gruender.de ↩

  4. Business Model Canvas: Einfach erklärt! - https://www.studihub.de/ ↩