What is Canvas and how to structure your business model – WAU
The Business Model Canvas, or just Canvas, is an efficient, modern and very practical business structuring model. It supports to relate basic points – all in a fully visual model.
Starting a new venture is quite a challenge! For this, it is important to think about how your business will present itself to the market and to the public.
In addition, it needs to have its functioning structured, for management and operation to happen properly. Canvas is the tool that helps you get started in an organized way, on the path to success.
This methodology focuses on structuring a company’s business model. Thus, it starts with the definition of the path that will be followed. Its application is the next step after the initial study of opening a company, giving the strategic definitions necessary for success.
In this post, you will understand what Canvas is, how to run it and what steps it is composed of!
What, in fact, is Canvas?
The business model is a concept that is already widespread, which basically helps the entrepreneur to define the main details of the company he is about to found.
Thus, the structuring takes place in a more practical way. However, Canvas, or Business Model Canvas, is the methodology that makes this whole process more intuitive, detached and, most importantly, easily visualized!
It is a simple tool, which has the proposal of helping the entrepreneur to have a broader observation of the company, from its main objectives to the segment in which it is included.
In practice, Canvas provides the necessary support for a more detailed assessment, which helps the entrepreneur to understand whether the business is viable and also to organize it before starting.
Despite being widely used and highly regarded, the Canvas methodology is much more recent than you can imagine.
It is precisely its objectivity and support, within a strategic line, that made it popular.
The idea was first surfaced in the mid-2000s, by Alex Osterwalder, in his PhD thesis.
The acceptance was immediate and very successful. Aware of the result of a lot of research and study, Alex showed the Business Model Canvas to the world through his book Business Model Generation: Innovation in Business Models.
From then on, the world got to know the methodology that started to revolutionize the strategic direction of new business models.
The structure of the Canvas
Canvas has a very simple structure that helps those involved in projects to have a very practical and objective visualization.
The proposal is to dynamically bring all the pillars of analysis of the new company’s proposal in a decentralized framework.
Thus, the linearity of this observation is deconstructed, to enable a more intuitive and creative assessment.
In practice, Canvas can be made in several ways: a simple sheet of paper, on a board, or even in editable digital files. There, there are 9 fields that need to be filled:
- Key partnerships;
- Key activities;
- Value offer;
- Key resources;
- Customer segment;
- Cost structure;
- Source of revenue.
Receive a template to start planning your business model with the Canvas methodology!
How should the Canvas be completed in each analysis category?
These 9 fields of the Business Model Canvas must be filled in properly. This ensures that business analysis and planning is done successfully.
Next, learn more about these analytical topics, what should be thought about in each of them and how they should be filled out.
1. Key partnerships
Here, it should be listed which other companies will be partners in the business. Usually, are services necessary for the operation of the enterprise and the Providers.
In any planning, it is essential to think about these partnerships, since long-term activity depends on them.
So, listing each one helps you understand who your company will depend on. This topic is of great importance in defining simple operational details, but which must be properly related.
The focus should also be only on those most important and decisive partnerships for the company. If the business model does not depend so much on these partnerships, it is not necessary to deploy to find possibilities.
2. Key activities
Each type of business has main activities and demands related to it. If you are a food producer, for example, there will be several steps to reach the final product.
These activities are always essential for the business model to be sustained and function properly. So ask: what activities are fundamental in this idea?
In this step, it is necessary to unravel what your company does. If it provides digital marketing services, then it is important to evaluate and relate what are the fundamental routines for the business to work.
The same must be done by producers. In this case, the manufacturing steps must be properly related. Management and work optimization activities should also be related.
3. Value proposition
For what reason are you launching your new venture on the market? Why will customers in your industry choose your company? These are two very simple questions, however, basic to define the value proposition.
This step of the Canvas consists of defining what the company is going to propose and bring interesting to the market, that is, the main objective as a business.
To define the value proposition properly and accurately, answer the following questions:
- What customer needs will the business be able to solve?
- What value will this service or product have for this solution?
- What advantages is the business capable of delivering to the consumer?
4. Key features
Every new company needs basic resources to function. Basically, this stage of the Canvas will help to define what must be provided for the company to be launched.
The concept, however, is broad, not limited to physical resources, such as an office. In addition, there are the intellectual resources and labor labor.
If your enterprise is a factory, you need to have warehouses, machinery and tools. If you provide digital services, you need systems and computers, as well as creating a website.
Evaluate your company and consider these resources, always remembering that they fall into four categories: physical, intellectual, human and financial.
Different types of companies have specific needs when it comes to relating to their consumers. Here, Canvas wants you to think about what that contact will look like, always with your business model in mind.
Some activities require more personal contact, especially when there are negotiations, while others work on less active models.
First of all, the relationship has a direct impact on the customer’s experience with your business. Defining exactly how this contact will take place can help your business position itself in the right way and be successful in the long term.
Think about what your business consumer expects in relation to your positioning and define what that approach and contact should be like.
6. Customer segment
Who will be the consumer of your company? Which persona will you offer your products or services to?
Every professional activity has a specific market segmentation, that is, there is a well-defined audience that will be interested. Your business needs to define, identify and deeply know which is the consumer segment with which it will communicate.
In this process of identifying the target audience, you will get a clearer view on:
- the proper communication to use with these people;
- the economic capacity of the public;
- the profit that will possibly be obtained;
- how it relates to added value;
- what your needs are;
- what are your consumption habits.
More than ever, defining the main communication channels and positioning of a company is fundamental nowadays!
If you already know your customers and understand what can bring value to them, the right channels will be the ideal platform to transmit these ideas and information.
Through them, you can communicate, in addition to attract more consumers, retain them and, as a result, increase the relevance of your brand.
Define which channels to use: TV, radio, internet and print media are the main ones. Don’t forget that we live in an era of digital transformation.
In it, social networks, for example, have a high power of engagement. In Canvas, stipulate which will be these relationship platforms, always evaluating where you will make contact, to what point will the value proposal lead, in which channel will the company advertise and how will each of them be integrated in its strategy.
8. Cost structure
Here, Canvas dedicates a step only to list all the costs that the business will have, from its implementation to the daily operational.
At this stage, it is important to think about the company’s share capital, that is, what is the initial amount necessary to fund it.
After that, the cost structure is in the direction of what will be the business maintenance investments:
- production costs;
- operating costs;
- fixed monthly costs;
- variable costs;
- economies of scale;
- scope savings.
9. Source of revenue
The sources of revenue consist of all possibilities of capital inflows in the company, naturally, from its activities.
In the Business Model Canvas, ways of obtaining money according to the company’s activity must be listed. This can be selling products, services provided, subscriptions and a number of other sources.
Evaluate what is really interesting to your business, analyzing the positive impact that this source of revenue would bring. Be sure to list the gain expectation of each of them, for example, understanding how much a product would be sold for.
Now, you already know how to use Canvas and have a practical and efficient structure for that. What you may not yet know is that it is possible to implement it efficiently in your digital marketing strategy.
See how to use Canvas in a digital marketing strategy and also download our editable template!