business model canvas
What is the Business Model Canvas?

A new way to think and present your business model.

The business plan is an essential tool to measure the viability of a new project. Business plans describe the overall strategy: positioning, value proposition, customer target and acquisition strategy, but also the cost and revenue structure and strategic partners. Writing (or even reading) a 50-page business plan takes too long! The business model canvas is a synthetic version of the business plan allowing a simple, complete and quick presentation.

The business model canvas is presented in the form of a matrix and provides a synthetic vision of a company’s strategy and the actions to be implemented.

This piloting tool is effective, concise, and visually pleasant. It can be used when developing a new business, launching a new product or service on the market, or reorganizing a company’s strategy.

There are several types of business models canvas, but in this article we will focus on the one invented by Alexander Osterwalder, which includes 9 key points.

1- The value proposition

This first point is essential because it highlights your customer benefits and the problems that the company is addressing. It is also an opportunity to understand the added value of your product or service and your differenciation to the competition. The value proposition is the main message, it should be on your home page and landing pages. Do not hesitate to write different ones and to test them one by one.

2- Customer segmentation

Customer segmentation must be precise, accurate. It is possible to target several customer segments, in which case it is preferable to separate them well and create a matrix for each of them.

For each segment, it is necessary to determine consumer’s profiles, the type of market (mass, niche, etc.) and their needs.

3- Distribution channels

You can choose a single distribution channel and thus opt for an exclusive strategy or an intensive strategy by multiplying the number of distribution channels: Internet, boutiques, department stores, department stores, trade shows…

4- Customer relations

The means of communication chosen allow you to build more or less customer loyalty. It is necessary to determine a communication strategy (personalized and/or automated) as well as supports (advertising on the Internet, blog, canvassing, services and physical demonstrations…). Customer relations are a key element in value creation, so it is important to establish a certain proximity with consumers.

5- Sources of income

This is the total revenue generated by your different consumer segments. Revenues can come from several sources depending on the strategy established to earn money: direct sales, subscriptions, rentals, fees… It is also necessary to determine the budget, including the costs generated by the production and operation of the business.

6- Key resources

Starting a project requires you to think about all the resources you will need to achieve growth and success.. They can be of different natures: human, financial, material, natural…

7- Key partners

Possible external actors must be identified. That can be a marketing partnership, associated products… A partnership can be very beneficial insofar as there will be an association of assets such as funds, clients or visibility.

8- The main activities

It is important to identify the key activities that are essential to the functioning of the economic model. It is these activities that will enable you to create value if they are implemented in the right way.

9- The cost structure

After listing all the activities and resources, it is necessary to determine their costs and which ones will be the most expensive. It is important to also understand which costs will be the highest priorities and to know their typology: fixed, variable, economy of scale…

 

The business model canvas is an essential step for an entrepreneur. It is an essential element for the development of a project but nevertheless tedious. The use of the business model canvas will facilitate this task/step. Reflecting on these 9 points will allow you to have an innovative business model.

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