The Business Model Canvas is a business-model planning tool designed by academics Alexander Osterwalder and Yves Pigneur. It is a one-page tool for designing and discussing business models and encompasses nine building blocks:
- Customer Segments
- Value Proposition
- Distribution Channels
- Customer Relationships
- Revenue Streams
- Key Activities
- Key Resources
- Key Partners
- Cost Structure
Business Navigation Services have adopted this methodology and included it in our business advisory toolbox. Having used the canvas and delivered numerous canvas workshops, we (and our clients) believe there are five compelling reasons to use this methodology.
The Business Model Canvas (BMC) gives you the structure of a business plan without the overhead, by stripping away the 40+ pages of ‘stuff’ in a traditional business plan. The Canvas is a great tool to test business ideas, improve clarity and focus on what’s driving the business (and what’s non-core and getting in the way). Using BMC you can spend minutes or hours sketching business models for multiple ideas (rather than days and weeks).
It’s visual and transparent
It helps structures discussions and your team will have a much easier time understanding your business model and be much more likely to buy in to your vision when it’s laid out on a single page.
Using the methodology of nine building blocks facilitates brainstorming, and it’s a lot easier to tweak the model and try things (from a planning perspective) with something that’s sitting on a single page.
It’s customer centric
The BMC gets you focused on what your business delivers to the customer, which problems it helps solve, and which customer needs are satisfied. Great businesses start with the customer and work backwards, putting customers at the beginning of the product development process.
It’s a platform for innovation
It helps companies visualise and position their business models for growth and innovation. This can be achieved by using one of the nine blocks as a starting point and seeing what alternatives you can come up with. Any change will require changes in the other blocks. This will lead to required changes in the value proposition, delivery channels, infrastructure, etc.