Have you ever used the Business Canvas Model (BMC)? If your answer to my question is YES, you would agree with me that it is a great business guide and entrepreneurs who use it to analyse their business ideas will be glad to say some prayers for the brain behind it.
If you have a business idea and you need a quick in-depth analysis on it, BMC is your friend! If you are already running your business and you want to understand your business better in a few minutes, BMC is your friend!
I have put together five (5) ways you can use the Business Canvas Model (BMC) but before proceeding, let me enlighten you about this amazing business guide’s history.
In 2008 Alex Osterwalder, a Swiss business theorist, author, speaker, consultant, and entrepreneur, known for his work on business modeling developed Business Model Canvas which can be best described as a strategic management and lean startup template for developing new or documenting existing business models. It is a visual chart with elements describing a firm’s or product’s value proposition, infrastructure, customers, and finances.
Now, these are the five ways you can use the business canvas model practically:
New idea template – BMC can be used to develop and/or submit new ideas. The interesting thing here is that then the ideas become comparable. This unifying lense or language allows you to compare all types of innovations ranging from process innovation and product innovation all the way to substantial business model innovation and the creation of new growth engines.
Strategic Planning/Development – It can be used to create a regular strategic planning and development cycles as it provides a very clear foundation and direction for the conversation at hand, whether done in a corporate offsite with the executive team or done around the board room table.
Understanding Competition – Another interesting way to use the BMC is to understand competition. By sketching out the business model of each one of your competitors you gain a better understanding of their strengths, limits, constraints, and what they can or can’t do. This increased understanding of your competitive landscape will allow you to act accordingly and design a better business model.
Understanding customers – An incredibly interesting and innovative use of the BMC is that of companies that use the Canvas to sketch out the business models of their customers. By better understanding their customer’s business model they can develop better value propositions and/or better explain their solutions in the context of their customer’s business.
Investment decisions – Some companies use BMC to make better investment decisions. Once you’ve sketched out a business model(s) and you understand the underlying business opportunity, you have a better understanding of where you should allocate resources. This is true both for improving existing business models to inventing entirely new business models. Of course, we recognise that it’s actually easier to generate quick revenues from existing business models and harder to generate long-term revenues from new ones, but we need to allocate resources across the entire portfolio of business models. The Canvas makes business opportunities explicit and can serve as a guide to how those resources get allocated.
After using Business Model Canvas to draft out your business idea’s potentials, you can now proceed to getting your business plan prepared. Talk to us via WhatsApp: +2348081553042 or firstname.lastname@example.org if you need a business plan or have more questions about this article.