Business Model Canvas
Experiential Education
An Introduction to Business Model Canvas
The Business Model Canvas is a planning tool that may be used to sketch new business ideas. Rather than starting with a detailed business plan the Business Model Canvas allows you to map out your thoughts and potential value proposition quickly. It is effective in testing if ideas are feasible before drafting a business model and a more refined business plan. It is only one of many tools, and this is only a brief introduction to provide students a basic understanding of what it is, and how it can be used.
The 9 Essential Components of the Business Model Campus
- Customer segments
- Value propositions
- Channels
- Customer relationships
- Revenue streams
- Key resources
- Key activities
- Key partners
- Cost structure
A Snapshot of the Components
Customer Segments
- These are all the people and organisations for which you are creating value
- You must understand exactly who your customers are
Value Propositions
- For each of the segments, you need to have products or services that create value
- Remember, you are solving a problem or meeting a need for the customer
Channels
- These are how connections are made and the value is delivered
- Think about distribution channels (e.g. via plane, train, or car, or via the internet, or mobile)
- How do you get the product to the buyer?
Customer Relationships
- What kind of relationship are you developing with the customers
- How are you going to attract them? Keep them? Grow them?
Revenue Streams
- Think about the pricing mechanisms in how you attract and retain revenue
- How will you actually make money?
- What is the strategy for capturing the value?
- What is the revenue model? Direct sales? Or, fees and subscriptions? Or?
Key Resources
- These are those assets that are in-dispensable
- Do you need infrastructure, finance, intellectual capital, certain staff, vehicles?
- What else do you need?
Key Activities
- These are things that you need to be able to perform well
- What is it that you have to be an expert in?
- What are you making, fixing, or doing?
Key Partners
- Think strategically - who can help you best leverage your business model?
- Who are your key partners - suppliers and buyers?
- Who do you need to make your business model work?
Cost Structure
- Once you do all of the above – you should have an idea of its cost structure
- What is it going to cost to operate your business model?
- What are the most expensive resources and key activities?
- What are the fixed costs, the variable costs, the economies of scale?
Other Resources
This is only a short introduction to the Business Model Canvas and the essential components, with one basic example of how to use it (included below - please scroll down).
For more detail, and to obtain a deeper understanding of how it is used as a business planning tool, we strongly encourage you to explore the resources provided below.
We recommend students think about how they could use the business canvas model for a personal enterprise, or in respect to their current positions.
These resources are from Strategyzer, MARS (fundamentals of entrepreneurial management and the Business Model Generation. These sites have many additional resources, some with costs involved. Students need not purchase resources for the units they are enrolled in at the University College.
Open the guide first, then the workbook that accompanies it (to make your way through). The order of the links should help you identify which guides go with which workbooks!
Here are the links:
The MARS Guides and Workbooks are detailed and informative. Be prepared to spend a few hours working through these if you are after a high level understanding of the Value Proposition and BMC.
MaRS Guide for the Value Proposition Workbook and MaRS Value Proposition Workbook
MaRS Business Model Canvas Workbook
The Strategyzer Instruction Guide has 8 short pages and a one page template that follows (for a quick reference to Business Model Canvas):
Strategyzer Business Model Canvas Instruction Guide
Strategyzer Business Model Canvas Template
The Business Model Generation Book below is comprehensive, with the most recent edition now attracting a cost. If you really want an in-depth understanding of BMC - this has all you need and more!
Business Model Canvas Generation - Book
Adapted from: https//www.youtube.com/watch?v=wlKP-BaC0jA
Adapted from: https//www.youtube.com/watch?v=wlKP-BaC0jA
References and Resources
*Please note: at the time this module was originally created and the resources downloaded from Strategyzer (i.e. a guide and a blank template), these were free of charge.
<https://canvanizer.com/book/business-model-generation>.
*Please note: at the time this module was originally created and the book was downloaded it was free of charge. More recent editions now attract a charge.
*Please note: at the time this module was originally created and the Powerpoint templates and accompanying guides were downloaded they were free of charge.
<https://www.youtube.com/watch?v=IP0cUBWTgpY >.
