The business model canvas, is a tool that allows you to create high-impact, visual models of your business, (or any other business for that matter), on a single sheet of paper (or any other suitable surface or medium - ranging from the storied paper napkin to an iPad). At the heart of any business is the ultimate, bottom line, question of profitability (i.e. how much it costs versus how much it makes), but it is often not that easy to understand the other key aspects that make a business work; at least not in such a straightforward manner as the single sheet canvas allows.
Figure 1: The Business Model Canvas
The great thing about the Business Model Canvas is the comprehensive way in which it can describe a business, by breaking it down into nine key components (including cost and revenues) as follows:
- Key Partners
- Key Activities
- Key Resources
- Value Proposition
- Customer Relationship
- Customer Channels
- Customer Segments
Furthermore, this is not a stand-alone tool. Even though it may be simple enough for anyone with a little common sense to use the canvas to describe innovative business models, the canvas is part of what I can only describe as a multi-publishing project which includes: the website, the book, an iPad App, and a thriving community of experts and users, many of whom had direct input to the content in those products and channels.
I’m not normally one to be effusive in praise of anything, but in this case, the proof is overwhelming that the clarity and immediacy which this canvas brings to describing any business is matched only by the screaming urgency of need for such a tool. Anything that helps to accelerate the creation, articulation and / or understanding of any modern day business model can only be a good thing in my book.
So who should use this tool?
In my opinion, the Business Model Canvas should be a mandatory tool for business leaders (i.e. CxOs), entrepreneurs, financiers (e.g. business angels / venture capital / private equity), strategists and consultants, as well as any business school curricula. You could say that I am sold on this concept, not only because I have read and reviewed the book, (and even used the App to create and analyse new and existing business models), but also because I feel the need to discuss it here. But don’t take my word for it - try it out for yourself - what’s more, it’s also free to use, share and remix the canvas under a Creative Commons License! What more could anyone ask?
About the author
Jude Umeh is a trusted advisor and digital innovator with track record of helping clients identify and define forward-looking business / technology strategies to capitalise opportunities and adapt to the challenges of the fourth industrial revolution. A published author and Thought Leader in Digital Content and Rights Management, Jude is a Fellow of BCS, Chartered Institute for IT (FBCS), and Liveryman at the Worshipful Company of Information Technologists, All opinions are his own.