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The Business Model Canvas is a kind of business plan that offers a more visual and synthetic overview of the key points relating to any business creation project, whether it involves a B2B, B2C, or another kind of model.
It summarizes the business model, highlighting strengths and competitive advantages, as well as weaknesses and areas for improvement.
The business plan, on the other hand, is concerned with all the operational details, and therefore runs to dozens of pages.
Presented in diagrammatic form and usually on a single page, the Business Model Canvas consists of nine essential points:
- the target customer segment;
- the value proposition designed to meet a need expressed by the target;
- the list of different acquisition or distribution channels;
- the customer relationship characteristics;
- the definition of sales price and pricing strategy;
- the key resources that define the business model:
- the activities essential to the strategy;
- the list of partners and players; and
- the costs generated by the various items.
The Business Model Canvas summarizes the components of a business model built around a single customer target.
If the company's activity targets a variety of customers and includes different, very distinct segments, it’ll be necessary to create as many Business Model Canvases as there are targets.
To create an effective Business Model Canvas, you need to work as a team, then compare it with the opinions of people outside the project.
In this way, strengths and weaknesses are more easily identified, enabling you to change course with your product, service, or strategy if necessary.
For easy creation of this Business Model Canvas, you can use online resources offering a ready-to-fill-in template.
The best-known method of creating a Business Model Canvas is that of economists Alexander Osterwalder and Yves Pigneur. Their idea first emerged in 1998 but was not put into practice until 10 years later. Today, the tool is used by many companies around the world.
