Canvas Model: What it is and how to apply it step by step in your business
If you are considering the possibility of starting a business, or want to improve your own company, the Canvas Model will be of great help to you.
When we start or have a business, it is important to define the model under which it will be governed, and what guidelines we will choose to be successful in the professional world.
The Canvas model is one of the most successful business models at the business level, and, applied correctly, can lead your company to triumph over the competition.
Canvas Model Beginnings
This model was created in 2011, and included in the book Business Model Generation , published by Alexander Osterwalder and Yves Pigneur .
The book delves into how, today, the best way for a business to conquer the market is to focus on experience and value for customers.
The objective of this methodology is to use it as a tool to discover the strengths and weaknesses of a business model.
With the Canvas Model you will be able to know the general vision of the business, focusing on the four main areas:
- The clients,
- The offer,
- The infrastructure and
- The economic viability.
For the Canvas model to work, it is necessary to comply with nine blocks, in which we must explain the characteristics of the company, so that we can define each of its aspects.
If there is one that you cannot establish concretely, it means that its structure is not well founded.
Step by step of the Canvas model:
For the Canvas model to work, we must fill in each of its modules. Next, we present each one of them and what is needed to define them.
Market segment:
In this module we must establish who is our target audience, what are the preferences of our customers , their tastes, and choices.
The idea is to specify which market we are targeting in order to know how to approach them, and what our proposal will be.
It is important to segment them by sex, age, purchasing power, interests, etc. The more specific we are, the better we will understand our audience.
Value proposal:
In this segment we must establish what will make our company something unique, a quality that differentiates us from other similar companies in our market, and that makes us preferred by the customer.
The goal is to define something that adds value to the public's experience with our brand, whether due to cost, the particularities of the product or service itself, or the shopping experience they may have.
Distribution channel:
At this point we must specify how, or through what means, we will reach the public, that is, how we will make our product or service available to them.
We must establish if it will be through traditional forms such as stores, wholesalers or own points of sale, or if we will use modern tools such as selling online , virtual portals or social networks.
It is also important to specify whether the product will be delivered directly or through various distribution channels.
Customer Relationship:
Once we are clear about who we are targeting and who our target audience is, it is time to decide the type of relationship we will have with them, of course based on the expectations and wishes of this type of client.
Here is the time to define whether we will offer an automated or close service, what language we will use, and the tone, defining whether we want to be strictly professional or more friendly.
It is important that this is clear, in this way we ensure that all the team that must have a specific relationship with customers and that this is the same over time.
Sources of income:
It is time to design the economic foundations of our company. In this line we must define what income the company receives, how we invest the money and what we earn.
In addition, it is important that you pay special attention to the price that is given to our product or service.
For this, you must not only take into account the cost of the product, but also what our customers or consumers would be willing to pay for it.
The idea is that this analysis gives us an overview of the company's profitability, in order to make future projections regarding our profit and growth. It is important to be fair with us, but also with the market.
Key resources:
In this space we must identify the physical and intellectual needs that our company has to develop.
This means the machines, ingredients or technology necessary to create our product or service, and also the personnel and human quality that is essential to be successful in a business .
Key activities:
Here we develop in depth the necessary activities to make our product reach the customer.
It is time to decide how we will bring our value proposition to the public, what media we will use, what our problem-solving plan will be, the production, design, marketing or distribution strategies.
Basically it is about fine-tuning the necessary details to meet our objectives.
Key partners:
At this point we will define the strategies through alliances that we will use to simplify the growth of our company.
We must focus on investors, suppliers, advertisers, or any other company that allows us to meet our objectives and obtain benefits in the process.
Cost structure:
Here we define the complete cost structure, we will not only focus on the value of the product or money that we will obtain, but also on the production costs, the payment of employees, taxes, investment in machinery or technology, etc.
Thanks to this analysis we will be able to have a clear idea of how much and when we will be able to receive the company's profits, but also where it will be necessary for us to invest in order to grow.
See: Complete online course of the Canvas Model
The Canvas model in business:
The main objective of the Canvas Model is to define the complete and fundamental structure that any company must have in order to develop.
Additionally, it seeks that the processes of production, creation, and distribution go hand in hand with the investment costs and the rate of profit.
Different types of profitable businesses apply this model, which can be applied to any business idea. From companies that are in charge of production, to entrepreneurship, through any market, be it fashion, food, communication, technology, among others.
At first you may feel that, perhaps, there is no real way to adapt it to what you are looking for or to your business, we recommend that you try it first.
With practice you will realize that all businesses need each of the pillars that this model establishes, and that furthermore, analyzing them through this tool will allow you to get to know your business much better.
Does the Canvas Model limit you?
The Canvas model is not intended to limit you or impose specific strategies that you must apply.
This model allows you to exploit your own capacity for analysis and ingenuity, as well as that of your work team, so that you can get the most out of your business, but also your ideas.
Applying this methodology there are no restrictions, but you will be the one who establishes the line of action.
Unique features of the Canvas model:
If you are still not very convinced that this is the model you need to establish your company, then let's talk about its characteristics, and the importance it can have in your company thanks to its benefits.
Practicality:
This model is extremely practical, by using it you can modify each of its modules as you go, so if something does not convince you, you may come back and perfect it until you are satisfied with the whole.
Display:
One of the great advantages of this tool is that you can get a general idea of how your business will work and develop.
It allows you a much greater capacity for analysis of causes and consequences than other business models, and you can generate hypotheses about different scenarios, business opportunities and results.
Simple:
This model is very simple and intuitive, there are different tools that allow you to print a complete sheet in which to capture the ideas in post-its or notes, so that you can add or remove the ones you want.
You can work as a team:
A great objective of the Canvas model is that all the people involved in the project participate in its elaboration.
In this way you can not only strengthen relationships with the others involved, but also have a constant brainstorm of business ideas , which allows you to bring to life that business ideal you have.
Overall result:
Once you have built your Canvas model you will have a 360 vision of what will be the basis for your business, a canvas in which you will be able to notice all the weaknesses and strengths of your structure, and that will also allow you to build and perfect that masterpiece. what your company will become.
Examples and how to adjust the Canvas model to your business
Now that we know in depth what the Canvas model is about, what its characteristics are, and we have a specific idea of what each objective is looking for, it is time to see examples and learn how you can apply it to your own company.
To create your own Canvas model, you need to print a sheet of the largest size you can, which you will divide into different sections, like the ones shown in the images.
You can save the following image:
The following points are placed on the right side: Market segment, Value proposition, Channels, Relationship with customers and Source of income.
On the left side we must include: Key Partners, Key Activities and Resources, and also Cost Structure.
In this way we segment the external and internal factors of the company.
If you are looking for applications to make your Canvas model, here are two that can help you:
Canvanizer:
It is organized into four categories which are business, service design, project management, and general. Additionally, you have other methodologies beyond Canvas, such as SWOT, Kanban and Lean Canvas.
Link: Access the application
Strategyzer:
It consists of a series of tools that allow you to develop your business model. They have a version for tablets.
Link: Access the application
Although there are several applications on the internet that allow you to design the Canvas model virtually, the recommendation is that you do it physically, since that way all the participants will be able to observe, analyze and give their opinion regarding the creation and design of the training plan. the company.
Recommendations to solve your Canvas Model:
The ideal is that you have a canvas with each segment, in which you can include with post-its or notes the different ideas you have for each one.
That way you can easily modify each line, placing and adding the ideas or concepts you have, or removing them when they do not meet the objectives.
It is important that the Canvas is filled in with the specific numbering that we have given for each block, in this way we can create the structure of the company in a much more organized way.
The right part of the canvas should be initially filled in because in this way you will know in depth the environment in which the company is developed, and what its weak points and strengths are in that sense.
Once each of these modules has been analyzed and identified, we can proceed to the left part. Once completed, it is time to fill in the second part, in which we will determine what measures we must take to set up the company.
The importance of the Canvas model for companies
Credit: Shutterstock
While it may seem like an intimidating step to create a Canvas, understand that this is the easiest way to get an overview of your company.
With this model you will be able to create the necessary strategies to bring it to reality, and so that all members of the company are clear about the steps they must follow and the objectives they must meet.
This business model is basic for any company, since it will provide a general but detailed vision of what you want to achieve, and it will give you the power to visualize what the results of each of your actions or strategies will be.
Before opting for any other business model, it is best to create a Canvas model in the first instance.
Once you have analyzed all the points of the company, internal and external, then it is time to move further, and determine if there is another business model, among the millions that exist, that fits your needs and improves the weaknesses of the company while exploiting all the potential for development and growth.
Recommended books:
Dare to try this model, remember that there is no specific or limited time to do it, it is a process that can last a few hours or even several days, and from which you can add or subtract ideas as they occur to you or as you move forward in your goals.
Don't waste any more time and go ahead creating a Canvas model of your company, together with all the people involved, without a doubt you will see the results of that decision.
Continue reading: The 30 mistakes of an entrepreneur that you should avoid in your business