You may have a great idea for a business. But a great idea doesn’t automatically mean there is a great business. Because for every great idea, there are many more seemingly great ideas that have flopped. A great idea, even the one that has a market, may fail if it isn’t accompanied by a great business model.
A great tool to help you build a sustainable business model is through the business model canvas. The canvas consists of 9 building blocks. By filling out these 9 blocks, you’ll see the how these 9 blocks interact with each other, and together builds a great business model. These 9 blocks are placed on two sides of the canvas – external and internal.
The external side includes 5 blocks. The external side can be observed by people outside the business.
- Value proposition – What are you selling
- Customer segments – Who are you selling to
- Customer relationships – How are you selling to your customers
- Channel – How do you get what you’re selling to your customers
- Revenue Streams – How much are you getting from your customers
The internal side includes 4 more blocks. The internal side cannot be observed by people outside the business.
- Key activities – What you need to do
- Key resources – What do you need to perform the key activities
- Key partnerships – Since no man is an island and you cannot do everything, what partnerships do you need to perform all the key activities
- Cost structures – How much will it cost you to perform all the key activities
This is the business model canvas. It may be a one-page canvas, but it isn’t easy to answer all the questions these 9 building blocks raise. The canvas provides a template for you to consider all the important questions necessary to build a great business model.
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Let’s check out an example that illustrates how the business model canvas can be used as inspiration. However, be careful not to just copy and paste. Each business model is unique with the 9 blocks interacting perfectly with each other.
Let’s check out this video below for how Disney is building a scalable dream factory and how it is all laid out in these 9 blocks.
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Are you ready to start building your business model canvas?
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