A business model describes the rationale of how an project creates, delivers, and captures value. The process of business model construction and modification is also called business model innovation and forms a part of business strategy.
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A business model describes the rationale of how a project creates, delivers and captures value. The process of business model construction and modification is also called business model innovation and forms a part of business strategy. The term business model is used to cover many aspects of a project.
In theory and practice, the term business model is used to describe many different core aspects of a project, including purpose, business process, target customers, offerings, strategies, infrastructure, organisational structures, sourcing, trading practices, and operational processes and policies including culture.
The business model canvas is a strategic planning tool used to illustrate and develop a business model. The business model canvas template clearly identifies the key elements that make up a business model. Additionally, it simplifies a business plan into a condensed form. The business model canvas template acts like an executive summary for the business plan.
The canvas divides the business model into nine building blocks across 3 pillars
- Viability – Is the business model commercially viable?
- Cost Structure
- Revenue Streams
- Feasibility – What is needed to deliver the business model?
- Key Partners
- Key Activities
- Key Resources
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Desirability – What is the value of the business model to a local authority?
- Value Propositions
- Customer Relationships
- Customer Segments
- Channels
The canvas lays these blocks out in a consistent way to create a repeatable approach.
Why use the Business Model Canvas?
Create a shared language
This concept can become a shared language that allows you to easily describe and adapt business models to create new strategic alternatives. Without such a shared language, it is difficult to systematically challenge assumptions about one’s business and innovate successfully.
Simple, visual and practical
The canvas is perfect for any good discussion, meeting or workshop on business model innovation. We need a concept that everybody understands: one that facilitates description and discussion. We need to start from the same point and talk about the same thing. The challenge is that the concept must be simple, relevant and intuitively understandable, while not oversimplifying the complexities of how enterprises function.
Discover opportunities
By going through the process of listing the different parts of your business on the canvas, you begin to visualise and understand the different relationships between the 9 building blocks that make up the tool.
Iterate quickly
Whether you’re using sticky notes on a real life Business Model Canvas or you’re designing your business model in an online tool you can update your designs very quickly. The tool enables you to develop a prototype and simply keep iterating until you’ve tested enough ideas to find product-market fit.
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