Are you looking for a way to take your business to the next level? One powerful tool that can help you do just that is the Business Model Canvas.
The Business Model Canvas is a visual representation of your business model that allows you to analyze and optimize your business strategy.
It’s a tool that can help you understand your customers, revenue streams, and cost structure. It can also help you identify areas for improvement and create a clear plan for growth.
In this article, we’re going to take a closer look at the Business Model Canvas and how you can use it to analyze and improve your business model.
What is Business Model Canvas?
The Business Model Canvas is a management strategy in the form of a visual chart of 9 elements.
Alexander Osterwalder introduced this business model in his book Business Model Generation. In the book, Alexander explains a simple framework for presenting the essential elements of a business model.
At first glance, the canvas model business flow seems quite simple, whereas in outline, the flow flows from one business element to the next important component.
Business Model Canvas Pillar
The business model canvas consists of 9 main pillars, namely:
1. Customer Segment: Who will buy your product? Who wants to pay you?
2. Value Proposition: Why do people use your product/service? What are the advantages of your business compared to other competitors? What is most attractive about your business model?
3. Channels: How can customers learn about the products/services you offer? How do products/services get to the hands of customers? Is it effective?
4. Customer Relationship: How do you always connect with customers? How do you ensure customers are satisfied after using your product/service?
5. Revenue Streams: How does your business make money? What products/services do you sell?
6. Key Activities: What activities do you do to create a value proposition? What strategy is your business implementing to achieve the company’s targets?
7. Key Resources: What essential resources would you like to have to run your business? What assets do you need so that your business can compete with similar companies?
8. Key Partnerships: Who can do things the company needs outside its key activities? Who are the suppliers/vendors that most determine your company’s success?
9. Cost Structures: What expenses are needed to run this business model? What cost components are required for critical activities, essential resources, and channels?
In the visualization, each element is represented by a column or box. This is what became known as the business model canvas template.
Analyzing Your Business Model
Now that we’ve ascertained how vital business analysis can be for a company’s future and what factors we need to consider, the final step is figuring out the process. That’s called the business process analysis, broken down into the following steps:
1. Identify Relevant Processes
The Business Model Canvas can help you answer important questions like:
- Where are our revenues coming from?
- What value are we delivering to which markets?
- What costs are involved in delivering that value?
- Are our perceived key activities and key resources as important for gaining revenue as we think they are?
- If we change our model in a specific way, what will be the effects?
To answer these questions, you’ll need to have a good understanding of the different elements of your business model, the attributes of those elements, and the relationships between them. Analyzing all of these elements will form the foundation for making changes and innovations to your business model.
There are different ways to analyze a business model, and in this example, each possibility is analyzed from a different perspective and answers a specific question. So, go through your Business Model Canvas and start asking yourself these important questions about your business, it’s the first step to improve and make your business more profitable.
2. Create Diagram or Flowchart
When it comes to analyzing a business process, one helpful tool is creating a step-by-step diagram. This can make it a lot easier for people to understand and visualize the process, which can ultimately lead to better outcomes.
So, what should be included in this diagram?
- Identify who is responsible for each step of the process. It’s important to know who is in charge of what so that everyone is on the same page.
- Next, you’ll want to include information about what events initiate the process. This will give you a clear understanding of what sets the process in motion.
- Another important aspect to include is a breakdown of the tasks and their relationships. This will give you a clear picture of how the different steps are connected and how they all work together.
- Finally, it’s important to determine how the process ends and how to mark its completion. This will help ensure that the process runs smoothly and that everyone knows when it’s done.
3. Call Out Improvement Points
Once you’ve gone through the process of analyzing your business, it’s time to figure out where improvements can be made. As an analyst, it’s your job to identify these areas and make sure they align with the company’s overall goals.
So, what should you be looking out for?
- Address any bottlenecks or obstacles that are holding the process back. These roadblocks can slow things down and make it harder for the process to run smoothly.
- Consider ways to increase customer interaction. This can help improve customer satisfaction and ultimately drive business growth.
- Decrease the amount of task and information handoffs between people and systems. This can help streamline the process and make it more efficient.
- Think about ways to bolster the value that the customer receives. This can help retain customers and build loyalty.
- Continuously define business standards, rules, and procedures. This will help ensure consistency and quality throughout the process.
4. Creating Better Processes
Now that you’ve done the analysis, identified improvement points, and aligned them with company goals, it’s time to model the new process.
As an analyst, you’ll take all the information you’ve gathered and use it to create a new, data-driven and informed version of the process. This new process should be more efficient, effective and aligned with the company’s objectives and goals.
It’s important to keep in mind that this is an iterative process and it’s not a one-time solution. The process will need to be reviewed and optimized on an ongoing basis to ensure that it continues to meet the company’s needs and goals.