Model Canvas: What It Is And How To Apply It To Your Business

By Mike Reiss- Dec 12, 2022 71

When you are thinking of starting your own business, you are probably wondering if your idea has worked. Then there are questions about what you should do to start a business. 

Providing quality services or products is not always enough to keep your business door open. In addition to quality, it is essential to know how to conduct business. 

In other words, you must have a business plan before anything else. It is even recommended that you create this document before you open your company but if your business is already up and running and your business does not exist, it is not too late to develop. 

In addition to a business plan for building your company, there is another highly efficient tool that is the canvas model. But don't worry, in this article, we will explain everything about what a canvas model is and how important it is for your company.


What is a Canvas Model?

The business model canvas, or model canvas, was conceived by researcher Alexander Osterwalder with the aim of overcoming the complexities of traditional project management techniques and bureaucracy. 

Replacing pages, documents, or spreadsheets without practical functionality is done with an easy-to-manage visual map. These documents represent a waste of time in creating day-to-day strategies for a company. 

The canvas model is used by large organizations such as Globo, Ericsson. 

However, this model is successful in medium-sized companies and startups, because of the concentration of points needed to grow those who are starting from scratch or have limited resources. 

The popularity of the canvas model is due to its practicality. Replacing a business plan in the form of a written document for graphics makes it easier to imagine. It is also widely used in post-brick notes on boards or murals. 

To outline the business plan in the canvas model, it is divided into nine sections and each indicates the direction of your company. It is up to the person responsible for creating the business plan to determine what needs to be presented in each of them. 

With this dynamic, it is possible to take a broader view of the business, identifying what can be changed or improved with the original concept. 

As we have said before, it is important for a company to start its operations with a defined business plan. But that doesn't stop him from doing it later. This is one of the first steps towards opening a company because it contributes significantly to its effectiveness. 

Nevertheless, business planning contributes to the process of modernization, innovation, and transformation of the company. Thanks for the visualized information that communicates with each other, realizing if the ideas are aligned.


What are the advantages of using the Canvas Model? 

The word canvas can be translated as "frame" or "screen", so one of the main features of the canvas method or model is its visual layout. 

With this model, it is not possible to simply visualize all the functions and activities of a business in a simple way and leave important information for the success of the project lost in the report or folder. 

It does not replace a traditional business plan, which requires more detailed information. But it is also a tool that streamlines, simplifies, and illustrates all the features of your business. 

For companies that are still planning, which did not go out of the paper, this method serves as a precise way to measure costs and revenues. Also to identify the best partnerships, get to know the target audience, and create customer retention strategies. 

This model proves to be more effective when it is used by IT professionals and companies already operating in the market. It helps in implementing changes in infrastructure. 

Other common problems in operational and technical areas include avoiding communication gaps, minimizing re-work, as well as helping to visualize important areas that require innovation.


The 9 Steps of the Canvas Model

Now that you have a better understanding of what a canvas model is, it's time to introduce you to the stages or sections of a mural. See where relevant information should be listed in a concise form.


1.     Customer segment

The customer segment consists of the target audience that the company already serves or wants to serve. It is important to know who the potential customers of the service or product are. 

In this way, their needs are recognized and ways to meet them properly are defined. 

With customer recognition, you can still choose the right way to communicate, as well as determine other aspects. Among them, the best place to offer products or services and the right way to reach them.


2.     Value proposition

This phase of the canvas model explains why customers choose your company, that is, what it offers also to services or products. We can use the following example to better understand. 

For example, a brand that sells business management software doesn't just provide resources to help with day-to-day operations. It provides quality, agility, efficiency, economy among others. Some of these suggested values.


3.     Channels

At this stage, you need to determine how your company interacts with its customers and where it will offer and sell its products and services. It refers to the places where the public can find you and the way your brand is promoted.


4.     Customer relationship

The key to customer relationships is choosing ways to relate to customers. Depending on the market segment, the relationship can be online, offline, or both. The audience needs to know the choice.


5.     Revenues

Revenue determines how the company's assets will be generated. So, like the other steps, it depends on your area of expertise. Revenue is earned by paying for products or services and may be paid monthly, fees, rent, licensing, per item sold, in other ways.


6.     Main Features

At this stage of the canvas model, the main assets for the company's work are considered. They may be human, such as employees, and/or materials, such as machines, tools, among others. It is still important to identify the financial resources needed to acquire other types of assets.


7.     Key Activity

Key activity refers to what your company does primarily. This could be the production of one or more products, service offerings, or product sales. While this may seem obvious, more relevant information is added to the canvas model.


8.     Partnerships

For a complete business plan, establishing a partnership is essential. Services must be outsourced at this stage and include both suppliers and other companies or professionals who are market-related to your company.


9.     Cost structure

Although all measures are relevant, defining a cost structure is a fundamental step, as it refers to existing costs. Anyone who starts a business sometimes has no idea how much it costs.


With the help of the canvas model, this information can be very clear, because it is necessary to think about all the costs involved. But don’t be discouraged if you go so far and realize that the revenue advance will not cover the cost. 

It is possible to adapt to reduce costs, including basic resources. 

This is why the canvas model is so efficient. This allows you to check for problems and errors before opening the door. Then, the business plan can be adjusted for the best performance of the company.


How to apply the Canvas Model in your company?

To use the canvas model, it is advisable to have a group of professionals, both directors, and employees of the company. Even if the business plan is designed after the company is already launched and running.  

When business changes, it is even more important to have a very mixed group of employees with the most diverse sectors to create new business plans. 

This attention does not allow any field to be excluded from the proposed topics. One tip is to leave the canvas model in the eyes of the whole company, even for those who did not participate in the creation. 

It is important to follow the transformation that is taking place in the business. By looking at the business plan it is possible to understand what everyone is doing, improving the performance of the team.


Why use the Canvas Model in your business?

As we speak, from startups to large corporations, the tool was incorporated in disruptive companies such as Nubank, SAP, Intel, among others. 

These companies apply the canvas model as an innovative tool for analyzing business and identifying entrepreneurial ideas. 

With the help of Business Model Canvas, a manager and his team can plan, understand and visualize the mechanics of its work. In other words, how it will create value, deliver to the customer, estimate costs, and generate revenue. 

Also, the canvas model serves as a reference point and common language when working with new assumptions. 

This feature is great for small businesses, startups, or those who need to make quick changes in an organization. Also, the elaboration of an MVP (Minimum Viable Product) is essential. 

In addition, there are other benefits of using this model, such as:


visual thinking

Allows a simple visual presentation for decision-makers to think. Highlight the key considerations that affect the business. Explain the direction the company is taking in its business model.


Interaction between the 9 blocks

The business model canvas enables the executive to understand how the 9 building blocks relate. There are various ways that these relationships can be changed to increase efficiency and effectiveness. 

An opportunity or innovation can be identified by using the canvas model.


Brief information

The tool encourages teams to keep their suggestions short and simple enough to match blocks.


Easy to move around

The canvas model allows for easy sharing and access. Also to full-screen screenshots or just to understand people to physically swipe.


Did you learn what Canvas Model is?

We hope this article has helped you learn what a model canvas is and how to use it in your company.


If you want to start a business and learn how to sell on the internet, check out our article on Influencer Marketing to get started.