As we need unified conventions and principles to graph and describe the layout of a house (for example) we need a tool to describe the business model of a given organization. The most common approach of this type was the business plan, annual reports, the management reports where too much text was used to describe a business model. Thus, these tools were proven to be inappropriate means for describing a business model in a simple and practical way.
In any case, we should have a shared understanding of what a business model is. We need a business model concept that everybody understands: one that facilitates description and discussion. We need to start from the same point and refer to the same thing. The challenge is that this concept must be simple, relevant, and intuitively understandable, while not oversimplifying the complexities of how enterprises function.
Here comes the Business Model Canvas as a tool to help you visualize your business model. The Business Model Canvas (BMC) “describes the rationale of how an organization creates, delivers and captures value”. It consists of 9 essential building blocks, which, provided that are working together, answer the fundamental questions any business model must solve:
- Key partners
- Key activities
- Key resources
- Value propositions
- Custiomer relationships
- Channels
- Customer segments
- Cost structure
- Revenue streams
This information was part of the SASSI LLC training materials. If you want to learn more, visit the Guide to becoming an Olderpreneur on the SASSI Hub.
