6 Reasons to Use a Business Model Canvas For Online Businesses

Starting a new online business takes several key steps. Launching means knowing what products or services you want to sell, who will want to buy them, and how much money you need to launch. Online businesses, apps, and other technology-based products may benefit from using a business model canvas in lieu of a traditional business plan. Business plans were originally used for the primary function of getting funding from a bank institution. Funding for an online startup now means that there are more business opportunities than ever before. Here are 6 reasons to use a business model canvas—instead of a traditional business plan—for your next online business.

Helps You Identify Your Target Audience

The primary reason that businesses fail isn’t that the product is bad. Instead, it’s because the business fails to identify the correct target audience. They are either too broad or too specific and then they miss the mark completely. Using a business model canvas puts the audience front and center. Many new online businesses choose to use help, like that of a growth agency, to ensure they are hitting the right mark with their product.

More Concise Than a Business Plan

Have you ever tried creating a traditional business plan? New startups don’t often have the expertise yet to create a truly effective long-form plan. They can, however, communicate the most critical elements of their product, their audience, and funding needs. A business model canvas is a perfect solution. It’s far more concise than a business plan and can help you get your online business up and running very quickly.

Creates a Visual Representation

One of the key distinguishing factors of a business model canvas is that it’s visual. You can look at a chart to see all of the most important aspects of your business on one page. It’s usually so simple that you can even draw it out on a whiteboard for potential investors. There is no need for clunky binders with dozens of pages of documents. Instead, you get all the most important information in one easy-to-see model.

Easy to Edit

Have you ever tried to edit a book? There are many details that need to stay consistent throughout the story in order for the narrative to make sense. The same is true for a business plan. When you have a business plan that’s 100 pages or more, it becomes very difficult to incorporate feedback while still maintaining the continuity of the document. For people who want to get into online selling like on Amazon, this level of detail is often unnecessary. Even creating your own Shopify account doesn’t always require this amount of information. Instead, use a business model canvas because it’s so easy to edit and adjust when needed.

Improves Success Rates

Every entrepreneur wants to succeed. Using a business model canvas boosts success rates because it helps you identify the most important things first. Online businesses don’t need to worry about metrics like traffic flow, demographics, and parking as they would with a brick-and-mortar business. Instead, they can focus their energies on identifying target audiences, key attributes of them, how much money they need to get their products online and in front of people, and more. By focusing on only a few key details, they can be more precise in communicating exactly what they need to launch.

Revenue Streams are Simpler

Some businesses, like banking and credit cards, have complex revenue streams. They make money from fees, interest rates, and so much more. Online businesses are typically much simpler in where their money will come from. By creating robust product lines, or sourcing them from the right places, these online businesses can thrive much more simply. And because their revenue streams will come from online sales, this is much easier to communicate in a simple business model canvas.

Online businesses often thrive because of the simplicity of their business models. Using a business model canvas helps them consolidate all the important information in one place. They benefit by being able to better communicate their business without creating a traditional business plan. The ease of using this type of plan makes them appealing to online business entrepreneurs and investors who may help them get started.