Why should we use Canvas business model?
Canvas business model is a framework for business analysis. Alexander Osterwalder is a Swiss business theorist who introduced the business model in 2010. Since then, the Canvas business model has become one of the most popular management tools for business owners and corporate executives.
The Osterwalder framework is designed as a questionnaire to make it easier to analyze the status of startups and find their strengths. In this article, we will review the elements and components of this business model and explain why it is important for your business.
What are the components of the Canvas business model?
A business model canvas is a framework that summarizes a company’s strengths, weaknesses, and development opportunities. With the help of this framework, you can analyze all these cases for any company of any size and any background (from a startup to a large old business).
The canvas business model is a table with nine sections, each representing a specific dimension of a startup or a business. It will be easier for you to visualize the business model if you complete all the table sections. In this part of the article, we will explain each of the business sections of the canvas model in more detail.
The main partners
In this part of the Canvas business model, you should write the names of all your partners and business partners and specify how you work with them. For example, in this model, you have to specify who your main supplier and partner is in information supply. With the help of this section, you can understand which company or individuals are the supporters of your business or which of your colleagues and partners you have lost so far.
Main activities
In this section, you should write down the activities and actions of your company that you should do to retain customers, partners, and partners, attract new customers and increase revenue.
Main sources
In this part of the Canvas business model, you need to focus on resources that will help increase revenue and attract your customers. These resources can include financial, credit, intelligence, and human resources.
Suggested value in the model business
When completing a canvas business, you need to enter the type of problem or problem that you can solve for your customers. You must answer these questions to complete this section. What do they gain from interacting with your company? How can your product or service meet their needs?
You can offer the best price or hire the best staff to satisfy customers with your relationship. On the other hand, your product and service may not be significantly different from your competitors. But your company can be known as an environmentally friendly company or do charity work. All of these descriptions represent the unique value proposition of your startup.
Customer classification
In this section, you should categorize your target audience. You need to explain which group of people your company’s activities are done with and which group of your customers are prioritized.
Customer relations
This section should focus on how the company interacts with its customers. Maybe you need to specify how your customer service is customized or self-service? You also have to answer whether you sell your finished product to customers or cooperate with them? You should pay attention to these details and fully explain them in your business plan.
Communication channels
In this section, you need to answer these questions precisely: In what ways do you want to connect with your current and potential customers? These communication channels include social media, in-app advertising, or support services? And how can people buy your products and services?
Cost structure in business model
In this part of the canvas business model, you must specify your major expenses. Next, you need to separate your business’s main and important costs from other costs that have the least impact on your business processes.
Ways to make money
In this section, you should explain how your business can earn money? These ways can include selling or renting goods or services or subscriptions. We suggest that you specify the main methods and criteria for pricing your goods and services. Therefore, it can be said that the Canvas business model is a useful and practical tool for determining a comprehensive strategy in all stages of your business.
Because it helps determine the direction of your future development. By completing this framework, you can reap the benefits even at the startup stage of your business or before you start it. This business model helps you to review your product or service. It also allows you to identify the strengths and weaknesses of your business or idea. So you have the opportunity to modify them while starting your startup.
Reasons to create a canvas business model for a startup
When you have a new idea for your business, you do not know your target market well. You can explore different dimensions of your idea by creating a canvas business model. As a result, you will have more mastery to get started. This business model has several benefits for a startup. Because:
You will have a clear and lasting vision of the various dimensions of your business
Having information about your target audience, value for money, and ways to monetize in writing is better than just keeping it in mind.
It becomes easier to communicate with partners, partners, and investors with a complete business model.
You can clearly state your business plans and facts when you express your thoughts clearly and unambiguously. So this framework is an effective way to introduce your business to other people.
Canvas helps you find the weaknesses of your work even before presenting your product.
As you complete your canvas business, you may encounter questions that have never crossed your mind. For example, who are your partners and colleagues? And what will be the ways to communicate with customers?
Canvas business model is a dynamic framework.
You do not have to complete it just once and always go for it. You can do this whenever you need to make changes to any of the dimensions and parts of your business model. For example, if you have a few partners or partners who are not trustworthy, you should immediately look for new partners. Once you find new partners, you can add them to your business model.
You can accurately calculate the risks of your start-up at each stage of its growth.
Some of the big organizations that have been in the market for years probably do not need business models like a startup. But in competing with such large companies, a startup faces risks that, with the help of the Canvas business model, can accurately identify them at any stage of its work and prevent their effects.
