Thanks to the Canvas model, you can have an overview of your business to adapt to market changes. Keep reading to find out why it is essential to your SME's vision and how this model will help you achieve business success.
According to a study by Harvard Business Review, 3 out of 4 companies fail in their first years, with a lack of business vision being one of the main reasons.
With the aim of mitigating this problem, the Canvas model was created in 2008. This model allows you to visualize the key elements of your company quickly and easily, helping you identify the strengths and weaknesses of your business structure. Below, we explain what it consists of and the step-by-step process you should follow to implement it in your SME.
What does the Canvas Model consist of?
The Canvas model consists of nine key elements that describe how a business works and how value is generated: value proposition; customer segments; customer relationships; distribution channels; revenue streams; key resources; key activities; strategic partners; cost structure. These nine variables allow entrepreneurs to structure their business intuitively, without forgetting any key activities of the company.
Benefits of using a Canvas model
Among the benefits of using a Canvas model in your SME, the following stand out:
- Clear visualization of your business model: the Canvas model allows you to see all aspects of your business on a single page. You can quickly identify which elements need improvement and which areas require more attention.
- Improved communication: it helps you explain the operation of your business clearly and concisely to investors, employees, and collaborators.
- Time and money savings: visualizing your business on a single page allows you to make quick adjustments and informed decisions without the need for complex analysis.
- Identification of new opportunities: it helps you quickly identify growth and expansion opportunities, as it provides a complete vision of the business and how its different elements relate.
Step-by-step guide for developing a Canvas model
To correctly develop a Canvas model, you must be precise in the information you enter in each section. Here is a brief guide for each section:
- Value proposition: define the problem that your product or service solves and the unique value proposition you offer to customers.
- Customer segments: determine the different types of customers you have or want to have in the future.
- Customer relationships: identify how you interact with your customers and how you provide them with support and attention.
- Distribution channels: the means by which you deliver or promote your products or services to customers.
- Revenue streams: how you generate income.
- Cost structure: distinguish the fixed and variable costs of your business.
- Key resources: identify the essential resources for your business to function.
- Key activities: identify the key activities to carry out your value proposition.
- Strategic partners: the key partners that help you carry out your business model.
Below, we provide an illustrative image of what a Canvas Model would look like:
Source: Own elaboration
In conclusion, this tool is used to understand our business model, but also to ensure that all members of the organization understand the business. Additionally, it is useful as support for management and to think about the future and project oneself in the short and medium term. If you want to improve your competitive position in the market, start by developing a Canvas model!