10 Tips To Make the Business Model Canvas Work for Charities or Social Enterprises

Often, I’ve heard charities and social enterprises write the business model canvas off as not working for them. And yes, the impact angle does change what the canvas needs to help you visualise. But it doesn’t take much to adapt it

Adjusting the Business Model Canvas (created by Alex Osterwalder and Dr Yves Pigneur)

Business Model Canvas Courtesy of Strategyzer.com … with a couple of adaptations by me (marked in yellow)

10 Tips when using the Business Model Canvas

(as noticed when coaching charities and social enterprises)

1. Don’t be put off by the word business! What we are looking for here is a sustainable model to deliver the value you are passionate about: and to deliver that value, we have to be financially stable. This tool gives us a great way to map: how are we making money, who really cares, what do they care about, how are we retaining donors and creating a real relationship with beneficiaries, where should we partner, how can we cut our costs, the list goes on and on… so don’t write it off until you’ve tried it!
2. Most charities or social enterprises will have a marketplace model- by default you have to have someone paying and someone benefitting. If either side doesn’t work: your business model doesn’t work, so you need to make sure both sides are mapped and you think about the interdependencies between them as you go.
3. To make this easier, you can colour code: use different coloured post it notes for the beneficiaries and donors and any aspects that relate to them across the canvas.
4. You have to set your own impact metrics: but these should correlate to the value proposition for both parties (i.e. what will give real value to beneficiaries and keep donors/buyers wanting to come back). Recommend cust dev with both customers to identify VP and then ripple to impact metrics, then work out value to donor and map to revenue (look for analogues here to help)
5. If you can’t see the canvas lines under your post it notes, it is a sign you’re trying to do too much or you haven’t rooted down to the core
6. Remember the VP isn’t features or “how” you deliver your value (e.g. it’s not counselling sessions it’s help me deal with my grief)
7. Always try to express VP in your customers own words- if you find yourself guessing what they’d say it’s a great sign you need to do more cust dev
8. Remember- you are aiming for a self sustaining business model: what’s the retention of donors? How dependent are you on one revenue source? Have you factored in finding new funding into your key activities if you depend on grants which might run out
9. Think especially tactically about key partners: they can be a great way to reduce costs but have to be win win- what value do the partners get? And should you really be outsourcing it? How core is it to your business model?
10. Are you aligned as a team on what you’re shooting for? If you find yourself having protracted discussions about who you are serving or the value you are delivering it’s a sign: a) you haven’t fully aligned on your mission- you may have been using the same language but interpreted differently b) you need to go and speak to more customers- you all have assumptions but not enough data to convince each other yours are right

Have you tried using the business model canvas for impact before? If yes, what worked and what didn’t?

Let me know if the above helps or post a comment with any questions if you’re still having trouble!