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The Business Model Canvas (“BMC”) is a useful planning tool that brings terms and concepts that your board, donors and business supporters understand to how you view and build your programs. But to explain and show you how to use BMC, first we must talk about business models. A business model is often talked about in line with a business plan. But they’re different: one relates to design (business model) and the other to execution (business plan). A business model helps you identify what revenue sources, customer base, products, and details of financing are needed, and a business plan describes how a new business or program is going to achieve its goals.
BMC is a one-page template for describing a new or documenting an existing business model. (See detailed description here.) It is a flexible way to describe the key elements of your programs, distilling each element into one or two sentences, and it can be a helpful tool for a nonprofit looking to better define a business idea. And you don’t even have to have an MBA! Most successful nonprofit leaders already use sound business practices in running their organizations. The BMC process gives you a method – and a vocabulary – to describe your program in business terms, expand your thinking and build buy-in. Many nonprofits already use terms like target audience, distinctive service or key expenses. Here you’ll be answering:
If you’re looking to bring a structured, thorough process and additional clarity to one of your programs, consider the Business Model Canvas. It’s designed to be a quick exercise. Here’s how it works:
In 2014 Mission Capital began using the BMC in our Accelerator program where nonprofit organizations thoroughly develop business growth plans over the course of several months. The process of creating the BMC helps our Accelerants reality-test and clarify their business idea with constant feedback from Mission Capital’s team of consultants and Social Venture Partners. The end result is a framework document that can serve as the basis for tactical planning as well as building a powerful case for funding. Our Accelerants report that this process not only gives them a comprehensive and realistic plan for what they want to do, but also it changes the way they think (e.g., like business entrepreneurs).
By looking at programs through the lens of the BMC, you too can gain new insights into how to plan and develop new programs.