1.1 Developing your Business Model Canvas

The Business Model Canvas is a helpful way for mapping potential opportunities and drawbacks related to the idea you have.

The Canvas is generally used in one of two ways:

  1. Existing programmes can develop new ideas and identify opportunities while becoming more efficient by illustrating potential trade-offs and aligning resources and activities.
  2. New programmes can use it to determine and plan how to make their offering a reality.

See Case Study 1, below, for an example of this.

The Canvas creates a complete overview of your strategy, the products you should offer, the people you should focus on, the paths you should take and the resources you should use to make your idea as successful as possible. Taking the time to sketch out your model and explore it in detail enables you to identify both its advantages and drawbacks so that you can make an informed decision about whether or not to commit resources to taking it forward.

Case Study 1: Small projects fund in Ghana

Paul works for a medium-sized non-governmental organisation (NGO) in Cape Coast, Ghana. The NGO has a focus on supporting entrepreneurship and has a ‘small projects’ fund which gives grants to individuals to help them establish or grow their own social enterprise. Paul administers this fund.

Paul noticed that the people who came to him for this fund often presented good ideas but they hadn’t thought them through in sufficient detail. The official application form for the fund focuses on administrative details such as budget, schedule and deliverables, and Paul was concerned that people were not exploring all of the risks and assumptions as well as the benefits in their plans. When he asked for more detail, applicants often assumed that he was being negative about their ideas, and became defensive.

After some research, Paul found the Business Model Canvas template and now includes this as a mandatory document in the application packs for the small projects fund. He has noticed a significant increase in the sustainable value and the quality of evidence that new ideas and plans have long term.

Activity 2

Timing: Allow around 10 minutes for this activity

In the text box below, make some notes about how you think the Business Model Canvas might be useful for a development idea you have.

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Discussion

The Business Model Canvas enables you to systematically understand and design your business model as well as differentiate it from others.

You may have noted that the Business Model Canvas:

  • allows you to get a better understanding of your organisation or idea
  • creates a visual overview of your business model
  • tests your business model based on assumptions, such as beneficiary groups, pricing and cost
  • allows you to make mistakes on paper (i.e. on the Canvas) rather than in the real world, which could cost you money
  • allows you to explore alternatives to your initial idea
  • enables you to create a good, strong basis for your business plan
  • conveys your business model to your team, decision makers or potential funders.

1 Why are business models important?

2 Business Model Canvas elements