What is Business Model Canvas and how does it work?
With the Canvas business model you can visualize and test your business model, which is an indispensable step when developing a business model innovation. Read in this blog post what the business model Canvas is, how it works and what advantages it offers you.
What is Business Model Canvas?
Roughly translated, the technical term "business model canvas" means that you can clearly present your business idea on a piece of paper. This allows you to visualize your business model, detect weaknesses and test whether it can work. The BMC was developed by the Swiss economic theorist Alexander Osterwalder and the computer scientist Yves Pigneur in 2005. The simple tool, which is also described in this book, has been enjoying increasing popularity ever since.
How does a BMC work?
All you need for a BMC are two things. Different colored Post-Its and an empty BMC, which you can download here. Print the template as large as possible so that you have enough space for your ideas. By the way, you can also make your BMC digitally. This method is suitable for teams working together via the cloud, for example.
The BMC is suitable both for the analysis of your existing business model and for the design of a new idea.
Now write down the different topics. Start with the value promise and continue with the customer segments. You can also start with the customer segments and take the value promise next. However, you should always fill these two fields at the beginning. This way you always have the essentials of your business model and your target group in view. The different colors of the post-it should represent the different customer segments.
A tip for new ideas: don't fall too much in love with an (own) idea. You run the risk of ignoring better alternatives. Use the possibility to test many different combinations at the BMC.
What are the advantages of a BMC?
Whether you are working on your existing business model or on a new idea - the BMC has five main advantages:
1. A look at the essentials
With the BMC you always have an overview of what your business model really is. It also shows which activities are not so important or even stand in the way of the goal. Because the BMC sharpens your view of the essentials, you can further improve your business model.
2. Basis for brainstorming
The BMC is perfect as a base to let your thoughts run free. You can also test alternative models for your business idea and find new combination possibilities.
3. Structured presentation
BMC brings your business idea into a clear structured form. This has the advantage that others can quickly understand and discuss your business model. The BMC offers an overview of your business idea from every perspective. Thus, for example, controlling, the strategy department or management quickly receive exactly the information that is important to them.
4. Dependencies and Conflicts of Objectives
With the BMC, startups can present their business idea. Corporates can also use the BMC for new projects. The BMC can also show dependencies or conflicts of objectives with existing processes.
The BMC cannot replace a detailed business plan for your idea. But if you present your business model in a BMC, you also get a structure for your business plan.
We have developed a German template of the Business Model Canvas with helpful questions, which you can download for free.
Born in Ried im Innkreis. As former Head of Innovation, he was responsible for the entire project management and specializes in the areas of fuzzy front end and business model innovation.