Keys to Building your Business Model – Canvas Method
The Canvas method is already an essential tool for designing a value proposition that improves a company’s management. Next, we are going to comment on the characteristics of this structural canvas and the advantages of its application.
What is the Canvas Model?
This methodology is a visual tool that facilitates ordering the different ideas related to the present or future business model. It is called canvas or Canvas because it allows the critical activities of a company to be chosen to determine its real value. Also, when creating a Business Model Canvas, it is essential to build on the following:
- Customers and their adaptability to the products that are for sale.
- The commercial offer. The results that can be obtained directly depend on its renewal and updating.
- The viability of the company if future trends are taken into account.
- The necessary infrastructure for the business to remain profitable and competitive.
How to make a Canvas Model
When wondering how to make a business model Canvas, it is necessary to have nine different sections that together result in the puzzle in which all the pieces of the project that we are going to address appear fitted:
Customer Segments
Any business model canvas should start with this all-important point of the standard Canvas template. It is essential to know the objective target. Knowing who you will sell a product to, what they like and how they prefer to be talked to is necessary. Only by having a detailed profile of the potential client or buyer is it possible to continue advancing.
Product Value Propositions
It is the key to the Canvas analysis. Consumers will buy a service or attractive product that stands out in its market niche and, above all, that is better than the competition. For this reason, it is necessary to look for the difference with the rest of the proposals, either because of the type of product, the way of acquiring it, or its price.
Sales Channels
A company’s business model usually determines a series of channels to sell its offer but is it enough? Everything will depend on whether the potential client adapts well (or not) to the proposal. This point includes the distribution system and delivery times.
Interaction and Relationship with Customers
The relationship is no longer unilateral but bilateral. Anyone who buys a product can confirm that a company’s strategies are not the most appropriate.
The same happens when choosing the type of marketing to be carried out or how incidents are solved. Switching roles and turning customers into bosses is synonymous with success.
Source of Income and Price of the Product
It is one of the most challenging Canvas elements to determine. The usual thing is to think that you have to enhance the return on investment or work with a fixed profit percentage.
However, the Canvas methodology encourages starting from scratch and not repeating past mistakes. The starting point should always be the question: how much would someone pay for this product? From there, profitability and adaptability to the budget of the company’s typical client should not be neglected.
Key Business Partners
They can be temporary or permanent. Specifying it is recommended to know how the distribution of payments will be. The synergies between the possible partners help to achieve the objectives more efficiently.
Derivative Cost Structure
It is recommended to specify the production and distribution. Having both aspects clear, it is possible to know if lowering the price is feasible. The possibility of automating processes to gain competitiveness must not be forgotten. Nor is it increasing the value for the client, even if you earn less per conversion.
key Activities
In this section, it is suggested to specify the operational model with which the company will execute the actions and steps leading to the correct functioning (and consequent growth) of its strategic business objective. What routine work should I use to achieve my business KPIs? It is essential to define it for the correct functioning of the value offered to the user about our service or product.
Key Resources
Based on the objectives we define, we must consider what elements or resources are essential to carry out the business mission of the brand and business when establishing that desired commercial relationship with your potential client. But what are they? The Canvas determines that these critical resources are classified as Physical (offices), Human (employees), Intellectual (patents), and Financial (lines of credit).
Advantages of the Canvas Model
The main one is that everything is to be designed at its initial point. The nine sections of the Canvas method already mentioned represent a cross-section of a company’s layers. Paying attention to each of them affects competitiveness and adaptability to new trends. We hope we have clearly confirmed the undoubted effectiveness of a business management method that fits all types of businesses.
