Business Model Canvas for social purpose organizations

April 14, 2015

Business Model Canvas

Today if you are looking to start any business, chances are you come across the increasingly popular business tool being used in the start-up stage, the Business Model Canvas (BMC).

The BMC is a helpful and important tool designed to visually map out assumptions on which your organization will evolve. It allows you to describe, design, challenge, and invent your business model. Often seen as the prelude to the business plan, it organises thinking around the most important components needed to develop your organization.

Through mentoring a number of social purpose start-ups, I have used the BMC as well as the Lean Canvas with all my mentees and have found the tools very helpful. Social entrepreneurs can find themselves “stuck in a mission mindset” and the BMC provides a framework that brings focus to the business side. I believe it adds great value to the business development process for social entrepreneurs struggling to balance the social and business aspects.

While I have observed a number of really beneficial uses of the canvas, I have also noticed a number of things important to be aware of as a social purpose organization or any organization wanting to build a more sustainable business. My observations together with a recent research project I conducted have highlighted the following:

  1. There are some significant gaps in the current popular BMC for social purpose organizations. This includes (but is not limited to) social vision and purpose, impact, organizational sustainability and key stakeholders. The canvas also focuses on value creation but does not look at value destruction, which for a social purpose organization focused on sustainability and impact is really important.
  2. Terminology in BMC can be ambiguous for social entrepreneurs, especially when working with outside advisors and multiple stakeholders. This can cause barriers to using the canvas limit its potential value.
  3. Many people complete the canvas and then start to look at developing their business based on a model that looks good on paper. Without research, feedback from customers all of the information included in the canvas is merely an assumption no matter how good it looks.

The selection of which canvas to use is important for social entrepreneurs. The decision requires thought and research in order to ensure that important components that will ultimately impact on the vision and purpose (fundamental reasons for starting a social purpose organization) are being factored in from the outset.

A number of more integrated business canvasses such as the Flourishing Business Canvas, Social Blue print Business Design Canvas, Social Lean Canvas, Social Business Model Canvas are available.

Other ways to ensure the consideration of sustainable business practices being embedded from incubation include looking at assessment criteria included in the B Impact Assessment B Corp’s assessment tool or The Future Fit Business Benchmark, a set of performance criteria that describe a company that is fit for the future.

Clearly understanding and clarify terminology when working with a canvas is important. For example a beneficiary may be viewed by you as a customer but may not be seen the same way for someone else. When working with outside advisors and multiple stakeholders make sure that you provide them with a clear interpretation of how you define the terminology.

Finally, regardless of the business model you decide to use, ensuring that all of your assumptions used to populate the canvas are validated to ensure that decisions are based on well grounded information will not only reduce risk in your business, but lead to faster growth and success.

Image credit: by Wikilogia, via flickr.com.

Author

Ondine Hogeboom

Ondine Hogeboom is a social entrepreneur. She started her first business at 17 and went on to launch another five businesses over the past 15 years in Southern Africa. She currently mentors a number of social innovation start-ups through the dynamic phase of business development. She is both humbled and inspired by these pioneers, taking brave new ideas out into the world in order to change the world. Follow her on Twitter, @OndineHB.