For lean startup companies, founders usually have difficulties structuring their business model. They try making their structures while forgetting many important elements. Over time they continually renew their construction only to see little to no improvement. Thankfully, Business Model Canvas was developed. It has helped many startup entrepreneurs structure their first business models in an organized manner.
Business Model Canvas or B.M.C. is a management and startup template for creating new business models. With the Business Model Canvas, it becomes possible to assemble a very detailed version of your company vision, with its nine key elements that represent the complete model of your business.
These key elements are the customer segments, channels, value propositions, customer relationships, key activities, key resources, key partnerships, revenue streams, and cost structure.
B.M.C. Nine Elements
- Customer Segments is who your customers are and what problems does your product solve.
- Value Propositions is the product or service, its features, benefits, and advantages versus competition. It also defines the size of the market opportunity and the minimum viable product or MVP that illustrates your product quickly to obtain feedback from customers right away.
- Channels are how you are to distribute and your-your product or service.
- Customer relationships. This is about how you create customer demand.
- Revenue streams. This is the profit and revenue sources and size.
- Key activities. These are the tasks the company should perform to succeed.
- Key resources. These are commodities, suppliers, and other elements necessary for the business.
- Key partnerships. These are the other enterprises can be-be essential for the success of your business.
- Cost structure. These are the variable and fixed costs necessary for your business to operate.
Fundamentally, Canvas delivers three things:
- Focus – Getting rid of a hundred pages of ‘documents’ in a traditional business plan, users of BMC have improved their clarity and focus on the core of the business.
- Flexibility – Business model canvas makes it easier to modify the model and try new things on something that you can see in just one page.
- Transparency – The members of your team will have an easier time understanding the business model in your firm and become more likely to agree with your vision when it is presented in a single page.
With all these things in hand, you can then validate your vision with your possible “validators”, which are your potential customers. As these customers pan elements of your business model, you then iterate the design and modify it over time based on the feedback that you have received. The consistently updated business model becomes a record for monitoring the progress of your company.
In your lean startup company, using canvas is a very useful tool in creating your companies model. If it is your first time with canvas, printing it out or having it projected on a whiteboard is highly suggested. Once it is on your whiteboard or printed and hung up in the office, fill out the nine elements for your business and ask yourself what the most critical components and linkages of the model are. This will help you make the most out of this amazing new company based structure.