Business Canvas – Let’s Start Thinking

Although thinking about a business model is not necessarily a task for people who work in performance, it is very important to understand the advantages, disadvantages, and operation of the company, enterprise, or venture, in order to provide the best service, and develop a marketing strategy that fits the needs of that specific business. 

In this class, we invite you to learn what a business model canvas is, and why it is important. 

We also think it is a very good tool for someone who is considering starting a business. 

This model will help entrepreneurs give structure to their plans. For people who want to work in company performance or in the marketing world, it will be useful for evaluating a company or business in a comprehensive and complete way.

By itself, this is a strategic management tool to quickly define and communicate an idea or business concept. This template helps to understand a business model in a structured way.

A business canvas is a space in which you can visualize all the elements of a business at once, and serves as a guiding concept, to help keep track of future goals. 

We invite you to create a large canvas with all the key elements of your business!

One thing to keep in mind is that, if you make a canvas very early on in the venture/business, many of the section elements will be based on assumptions, so it is important to conduct a thorough investigation to make sure that the information it contains is correct. 

If you make the canvas at an advanced stage of your business/venture, it will help you to re-assess the business’ situation, and work on improving any points that may be lagging behind.

Let’s get started!

The canvas contains nine elements:

• Customer segments
• Value propositions
• Channels
• Customer relationships
• Key resources
• Key activities
• Key partnerships
• Cost structure
• Revenue streams

Customer Segments

It is important to identify the different groups of people or organizations the business wants to reach and meet a need or solve a problem for. 

The business may have one or many customer segments.

When there is no single group to reach, it is recommended to group them into different segments by needs, behaviors, or other attributes.

Here, it is important to note that what you are looking for is not just a technical or demographic description (for example: age, gender, geographic location). While these points are important, it is also important to understand your customer’s daily life, in order to think about how you will communicate your business to them in the future, and how you can present a solution to their problem. Think about what they consume, how they spend their time, and what they like to do and consume. 

Here are some questions to help you fill in this section of your canvas:

Who are we creating value for?

Who are our most important customers or users?

Value Proposition

A value proposition arises from analyzing what unsolved problems there are within your sphere of influence, what things you can offer as a solution to a potential customer problem, and how you will approach the customer. The value proposition is the reason why customers choose your company over another one. 

Think about the experience you want your customer to have with your product/service, what promise you are making to the customer that will be fulfilled by what you’re selling, how you are going to help them, and how your service will help them.

Here are some questions to help you fill in this section of your canvas:

What problems do our customers have that we want to solve?

What unsatisfied need is there in the market?

How will our solution fix this problem?

What value do we bring to the customer?

Relationship with Customers

To continue along the same lines, for this section of the canvas you will analyze the solution you are offering — its advantages, disadvantages, and what kind of relationships your company will establish with its different customer segments. 

Here are some questions to help you fill in this section of your canvas:

What type of relationship does each of our customer segments expect us to establish and maintain with them?

Which ones have we already established?

What is the cost of establishing these relationships?

Distribution and Circulation Channels

The central part of your business after establishing the basics is how you are going to approach your customers, what your communication channel will be, and how you will bring your service or product to them. 

So, first you must ask yourself where you would typically find them, and how they tend to communicate with each other, to ensure that the tone of communication and the way you talk to them is appropriate. In what type of communication channels will you find them: Social media? Traditional media? Email? Once all these questions have been answered, you should put together a media and communication plan (which we will go into in more detail later on in the course) in order to impact them in the best way possible. 

Then you should think about how you will get your services or products to them. Will you use a mail distribution service? Is just having a website enough? Will customers be looking for the product in a physical store?

Here are some questions to help you fill in this section of your canvas:

Through what channels will your customer segments want to reach you?

How are you reaching them currently?

How are your channels integrated? Which ones work best?

Key Resources

Resources are the assets that enable your company to create and deliver a value proposition, reach its customer segments, maintain customer relationships, and generate revenue. These resources can be physical, intellectual, human, or financial.

Physical resources: 

Material means, such as facilities, buildings, vehicles, machines, points of sale, and distribution networks that give you an advantageous position over competitors.

Intellectual resources:

Trademarks, patents, car rights, an exclusivity contract, or a customer database,to provide an advantage simply by virtue of being unique.

Human resources: 

People without whom a certain aspect of business cannot be carried out.

Financial Resources: 

Financial resources are important for allowing you to obtain a certain advantage and anticipate market situations, placing you in a more competitive position.

Key Activities

Once you have a clear and solid value proposition that “seduces” your customer segament, you will be able to identify your company’s key activities. 

Each customer segment has a different value proposition and therefore requires different activities.

These are the activities that make possible the existence of the value proposition that you have already defined as the solution to your customer segment’s problem or need. They are, therefore, actions that must be carried out for the successful operation of your company.

Key Partnerships

Alliances:

In any kind of business, it is important to find allies — people, entities, suppliers, partners, or other companies that can help you enhance your customer portfolio, provide you with solutions, or help you reduce costs.

Here are some questions to help you fill in this section of your canvas:

Who are your primary partners?

Who are your primary suppliers?

What essential resources do you acquire from partners?

What key activities do partners carry out for you?

Cost Structure

The cost structure will include all the basic costs of running the business. You should create a list with all the items on which you are going to spend money. It is important not to leave anything out, because sometimes small costs can generate losses that impact profitability in the long run.

If you are in the initial stage of your business or enterprise, you can evaluate how much up front investment you will need to make for your business to operate as expected.

Here are some questions to help you fill in this section of your canvas:

What are the biggest costs inherent in your business model?

What essential resources are the most expensive?

Which key activities are the most expensive?

Income

In this section, you must define how your company is going to generate income. We recommend you choose a model — here are some of the most common income models:

• By commission: x percentage of money is charged per sale made.
• By subscription: this consists of providing a product or a service in a periodical and stable way in exchange for the payment of a recurring fee.
• Direct sales: sales from person to person in which a product is sold for x amount of money.
• Freemium model: offer a basic service for free, and then a paid upgrade.

Impact

What social and environmental impact does your business generate? Although this specific point is not included in our canvas, this is an important thing to think about, although not all companies take it into consideration.

In today’s world, it is important to take into account what effects you generate with your business. If your business is generating a negative social or environmental impact, you can find ways to improve it and not harm the environment or society.