Since its release in 2008 by Swiss business theorist, Alexander Osterwalder, the Business Model Canvas (BMC) has been an essential planning and strategizing tool for business owners and entrepreneurs seeking a more visual perspective on their business plans. The BMC creates a single-page template outlining the business’s objectives, making it easier to plot a new course or develop an existing one. In this guide, we’ll show you how to use BMC software effectively.
Choose Your BMC Software
The first step is to find the best templates/software for your needs. There are many options on the market, but one of the great things about the BCM model is that it’s very simple and doesn’t complicate things with needless features and integrations. Look for Business Model Canvas software that follows the standard pattern of nine building blocks (see below) and suits your specific business needs. Most templates are free, and the only thing you need to do is address each of the components in turn and then enter the relevant information. It may also be helpful to use software that will guide you through this process and not complicate things, so spend some time familiarizing yourself with the options.
Build the Components
There are nine components to a BCM model. All of these are visualized on the canvas. Your goal is simply to input the required information:
- Key Partners
The partners that are integral to the business and assist with its daily operations. Your key partners can include suppliers, stakeholders, and other invested entities.
- Key Activities
Everything that your business relies on for its daily operations, including production activities, revenue streams, networking, troubleshooting, and anything else that keeps things ticking over.
- Key Resources
The tools and resources your business needs to perform its key activities, including the employees that perform daily operational activities and the equipment that they use.
- Cost Structure
The operating costs of your business, including both fixed and variable costs. Every relevant expense should be included in this section, including any expected maintenance costs and ongoing operational costs.
- Value Proposition
What makes your business unique? What does it provide that isn’t available anywhere else? It could be a completely new product, service or simply a unique angle to an existing offering.
- Customer Relationships
Your relations and interactions with your customers. Are you running a brick-and-mortar business with regular face-to-face interactions, communicating primarily through the internet, or letting them do their own thing and serve themselves?
- Customer Segments
What demographics does your business target? If you’re selling food or drinks, for instance, your customer segments may include caterers, cafes, organizations, and everyday consumers. If you’re offering specific services to targeted industries, your focus will be narrower, but they may still extend beyond your primary demographic.
- Channels
Think about all of the channels that you use to communicate with your customers for both support and marketing, as well as sales and distribution. Will you be relying on social media marketing and search engine optimization? Are there any specific shopping platforms or affiliate programs that you have in mind?
- Revenue Streams
All of the ways that your business will make money, including direct-to-customer sales, business-to-business transactions, individual sales, and subscriptions. If it brings money into your business, include it in this section.
Complete Your BMC
All of the above components will be listed on the BMC template as a series of boxes. The Key Partners, Activities, and Resources are on the left of the template, along with the Cost Structure. The Value Proposition sits in the middle, and everything else is on the right side. Once you have the BMC template/software, sit down with your team members and brainstorm some ideas. Think about each component individually, making sure you cover every key facet of your business across all of the relevant sections. Try to complete each section in its entirety. If you’re unable to do this, it could indicate that you’re not quite ready and need to go back to the drawing board. Your stakeholders, co-owners, and employees can help you if needed. It’s typically a very quick process compared to a standard business plan (usually taking about an hour), but it’s also an important one, so make the time to be thorough.
Summary: Building a Future for Your Business with BMC Software
The beauty of BMC lies in its simplicity and availability. All entrepreneurs and business owners can use it to plan ideas, create business plans, and more. It paints a clear, concise, visual image of the company and helps to give directors and stakeholders direction. It also only takes around an hour to complete, so it’s definitely worth the effort!
