So, you’ve got your great business idea, and you’re ready to jump right in and make a bunch of important choices that will affect the long-term success of your business with no planning whatsoever. Hang on a minute, you might want to hold off on making the big choices until you have a solid plan. This is where a business model canvas comes in. The business model canvas (BMC for short) is an essential tool in the toolbelt of any good entrepreneur. It allows for a detailed diagram of all the most important components of a business plan.
Your BMC should have 9 sections, each representing a core part of your business plan: Customer segments, value proposition, revenue streams, channels, customer relationships, key activities, key resources, key partners, and cost structure. Customer segments are the customers and markets that you get business from. Value proposition is why your customers choose to give your business money. Channels are how the business communicates with customers. Customer relationships are the different types of relationships your business will have with customers. Revenue streams are how funds are generated. Key resources are the resources that are essential to the business’s success. Key activities are actions that are essential to the business’s success. Finally, key partnerships are the suppliers and partners in the business. That seems like a lot to research, but each part is equally crucial to the success of your business. Every business is a risk, and good entrepreneurs are prepared to deal with risk, but a well-prepared BMC can increase the likelihood of success from a business.
Is all this work worth it? Will a business model canvas really help that much? Would you be better off using a different format to plan your business? Well, a business model canvas is a format that might not work for everyone, but it’s a good way to make sure you’ve really considered everything before creating your business. Don’t be afraid to revise your business plan if you run into conflicts while working on your BMC, finding potential problems is what it’s for. A good BMC is a great tool for planning your business, and will help you as you continue to grow into the future.