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Business Model Canvas Explained

I found the book Business Model Generation by Alexander Osterwalder and Yves Pigneur and immediately started implementing the canvas and using it as a training tool. While the items were not new to me, the system provided an easy way to for me to explain it to my staff, clients, and partners. The system also provided a checklist to ensure that critical items and steps were not left out. I found this not only save time but also money which are my two hot buttons in business because you only have two things to invest; time and money and you have a limited amount of both.

Your business model consists of nine basic building blocks:

  1. Your customer segments
  2. Your value proposition for each segment
  3. The channels to reach customers
  4. Customer relationships you establish
  5. The revenue streams you generate
  6. The key resources
  7. The key activities to create value for your customers/clients
  8. The key partners
  9. The cost structure of the business model

Simply building each block is not enough; the canvas provides a map of how each piece fits together and the flow from marketing and acquiring a customer to fulfillment and follow-up; which will ensure new business through referrals, reorders or both.

Your staff will love this also as it provides a clear job description and expectation for each department which is the key ingredient in leadership but one that is often overlooked in early stage and small companies. Many of the turn arounds I do are not lacking quality employees or work, but it is a simple lack of leadership.

I have attached a video below with the transcript which will walk you through how to use the system. Click here to get your copy of “Business Model Generation.”

 

Align:start an organization’s business model can be described with nine basic building blocks your customer segments your value proposition for each segment the channels to reach customers customer relationships you establish the revenue streams you generate the key resources and key activities you require to create value the key partners and the cost structure of the business model but it’s not sufficient to just enumerate the nine building blocks what you really want to do is to map them out on a pre-structured canvas this is what we call the business model canvas the tool that helps you map discuss design and invent new business models let’s briefly go through the nine building blocks starting with a customer segments these are all the people organizations for which you’re creating value this includes simple users and paying customers for each segment you have a specific value proposition these are the bundles of products and services that create value for your customers channels described through which touch points you’re interacting with customers and delivering value the customer relationships outline the type of relationship you are establishing with your customers the revenue streams make clear how and through which pricing mechanisms your business model is capturing value then you need to describe the infrastructure to create deliver and capture value the key resources show which assets are indispensable in your business model key activities show which things you really need to be able to perform one the key partners show who can help you leverage your business model since you want to be done walk you resources yourself while you perform all key activities and once you understand your business models infrastructure you’ll also have an idea of its cost structure so with the business model canvas you can map out your entire business model in one image this works for start-up entrepreneurs just as well as for the most senior executives

Click here to get your copy of “Business Model Generation.”