Business Model Canvas (BMC) Explained by Rizwan Ahmed CPA

 

Business ideas can be as abstract and articulate as the person explaining them. For many businesses that seek to communicate their business idea or concept, a Business Model Canvas is the best option.

Rizwan Ahmed CPA explains the various segments of a Business Model Canvas, which is significant for businesses looking for investment.

Importance of Business Model Canvas (BMC) For Investors by Rizwan Ahmed CPA

The BMC is a strategic management tool that allows businesses to explain their ideas quickly. It's easy to understand and offers visualization of the different segments of a business.

Structuring information easily and straightforwardly lets entrepreneurs and intrapreneurs deliver their message to investors in less than two minutes.

Rizwan Ahmed CPA pinpoints that time is an expensive currency when pitching to investors, and businesses must keep the basic idea simple.

Information within a Business Model Canvas is extracted from other resources and business plan documents. It can also be easily refined.

Startups and young businesses sometimes lack a defined structure or audience. Investors can highlight these core issues with a pitch if businesses present a BMC.

Businesses must also leave room for changes in their plans to attract investors that want more involvement. Most investors seek equity and ownership simultaneously and only invest if businesses involve them in their day-to-day operations. A BMC has enough margins to cater to the needs of both businesses and investors on one page.

Segments of Business Model Canvas (BMC) Explained by Rizwan Ahmed CPA

A BMC brings the key points to the forefront. Instead of using extensive financial reports or multiple pages, businesses can focus on what's driving them forward. It's also easily adjustable and adapts to changing business needs. The single-page template offers clarity and transparency that helps investors decide faster if their vision aligns with yours.

There are nine elements of a comprehensive business model canvas. These elements include a customer segment where the business highlights its customers. Customer needs, demographics, and expectations are laid out.

As per Rizwan Ahmed CPA, the core of the canvas is the value propositions. Your business's propositions and unique selling points make it stand apart from the rest.

All elements are independent of each other but, combined, make a holistic view of your business and its operations.

The Key Activities are the strategies and operations your business undertakes to deliver your business proposition. Your canvas also includes Key Resources. Businesses must have assets and resources to compete in the market, including business connections, property, and human capital.

Rizwan Ahmed CPA considers the Channels segment to be the communication plan of your business. Channels are the way your business is promoted. These are offline and online channels; the segment should detail why certain channels are used.

The Customer Relationships segment defines your interaction with the customer. It includes the customer journey and important touchpoints.

No business is a standalone entity, and Key Partnerships allow businesses to delegate important tasks. This segment covers operations that can be outsourced.

The cost structure segment is linked to the revenue streams segment. These cover how the business earns revenue and the major cost drivers of the business.