THE PERFECT TOOL TO UNDERSTAND YOUR BUSINESS
Business models are used as simplified, shorthand descriptions of a business organization. Among the existing models, the business model canvas has been commonly accepted. The business model canvas is a logical framework for business models as it provides a graphical representation of a business organization, with the nine building blocks offering sufficient classification options.
The canvas consists of building blocks that divide the different areas of a business model. The left side of the canvas roughly includes all the "efficiency" elements that contribute to the production and delivery of products and services as well as the corresponding costs of these activities. The right side roughly includes all the "value" elements and activities that create value for the customer. Every element, activity, resource or other aspects of an organization can be assigned to one of the nine building blocks, which in combination cover the four main business areas of customers, offer, infrastructure and financial viability. In that, the canvas can act as a blueprint for strategies to be implemented through organizational structures, processes and systems.
Key benefits of the BMC is to bring clarity to an organisation’s core aims whilst identifying it’s strengths, weaknesses and priorities. This allows to provide an up-to-date “snapshot" of any organisation’s preparedness to achieve optimal results in any service design project.
When filling in the Business Model Canvas, entrepreneurs generate an overview of the business including all stakeholders. Instead of the entrepreneur filling in the canvas him/herself, it is even better to do this together with other people, since they offer a chance for reflection and a broader view on the different Business Model ‘blocks’.
Experience with the Business Model Canvas
We have interviewed some companies working in the Founded By All incubator in Eindhoven, the Netherlands. We asked them to create their Business Model Canvas. Below some interesting findings are highlighted:
Companies’ (shared) networks seem to be the most important aspect for running a good business. Either realized via own personal investments, but also very much depending on the incubators' environment.
By Collaboration or partnering the entrepreneurs are able to work more flexible and offer more to clients.
In the value propositions box, the focus on the customer is very high. We call this customer development plus. The companies are doing research about their companies, organize workshops and keep a close relationship and feedback-loop during all steps of the project.
Field testing 1st ideas is also very important for these companies. By organizing co-creation sessions, to have the customer helping you with the project and have the customer providing you with more insights and information. Or by presenting ideas/solutions in a very early stage, which enables the client to give feedback that can be taken into account in the development of the designs.
The working environment of the incubator is also proved to be very valuable for these companies. Not only to have a professional appearance to your customers, but also the close contacts with co-entrepreneurs. The (informal) communication between the entrepreneurs, where they just have a coffee-talk like colleagues, share ideas or ask co-entrepreneurs for specific expertise and/or information.
Because the companies in the incubator get to know each other very well, matchmaking between them is growing organically. There are companies with different expertise that can strengthen each other by collaborating, which maybe even results in creating a new, (full-)service together.
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