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Explore the World of Virtual Canvases: Paint and Draw Online

In today’s digital age, artistic expression has taken on a whole new dimension. Gone are the days when artists were limited to traditional mediums like canvas and paper. With the advent of technology, painters and drawers now have the ability to create stunning works of art online. Whether you’re an aspiring artist or a seasoned professional, painting and drawing online offers a world of possibilities. In this article, we will delve into the exciting world of virtual canvases and explore how they can revolutionize your artistic journey.

The Benefits of Painting and Drawing Online

Painting and drawing online comes with a host of benefits that traditional mediums simply cannot offer. One major advantage is the ability to undo mistakes effortlessly. With just a click or tap, you can erase any errors or make changes without leaving any trace behind. This level of flexibility allows artists to experiment freely without fear of ruining their work.

Another advantage is the vast array of digital tools available at your fingertips. Online platforms offer an extensive range of brushes, colors, textures, and effects that can enhance your artwork in ways previously unimaginable. From realistic oil paints to vibrant watercolors, these tools allow you to explore different styles and techniques without investing in expensive materials.

Accessible Anytime, Anywhere

One significant benefit of painting and drawing online is its accessibility. Unlike traditional art studios or workshops that require physical presence, virtual canvases can be accessed from anywhere with an internet connection. This means you can indulge in your artistic passion whenever inspiration strikes – whether it’s at home, while traveling, or even during your lunch break at work.

Furthermore, painting and drawing online eliminates the need for bulky physical supplies such as paints, brushes, and easels. Instead, all you need is a device like a laptop or tablet to get started on your creative journey. This convenience makes it easier than ever to carry your artistic tools with you wherever you go.

Collaborative Opportunities

One exciting aspect of painting and drawing online is the opportunity for collaboration. Online platforms often feature communities where artists from around the world can connect, share their work, and collaborate on projects. This opens up a whole new world of inspiration and learning as you can interact with fellow artists, exchange feedback, and gain insights into different artistic styles.

Collaboration also extends to virtual workshops and classes offered by renowned artists. Through live streaming or pre-recorded tutorials, you can learn from the best in the industry without leaving your home. These online workshops provide a unique opportunity to enhance your skills and broaden your artistic horizons.

Preserving and Sharing Your Artwork

One of the challenges faced by traditional artists is preserving their artwork. Over time, paintings may fade or deteriorate due to exposure to light or environmental factors. However, painting and drawing online offers a solution to this problem. Digital artwork can be easily saved in multiple formats and stored indefinitely without fear of deterioration.

Additionally, sharing your artwork with others becomes effortless when painting and drawing online. With just a few clicks or taps, you can showcase your creations on social media platforms, personal websites, or online galleries. This enables you to reach a wider audience and receive valuable feedback from art enthusiasts around the world.

In conclusion, exploring the world of virtual canvases through painting and drawing online opens up endless possibilities for artists of all levels. The benefits of flexibility, accessibility, collaboration opportunities, preservation options, and easy sharing make it an attractive option for those looking to unleash their creativity in new ways. So why wait? Grab your digital brush today and embark on an exciting artistic journey like never before.

This text was generated using a large language model, and select text has been reviewed and moderated for purposes such as readability.

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The 9-Step Business Model Canvas Explained (2023 Update)

Written by Raquel Alberdi

Business | entrepreneurship, 13 comments(s).

Blog » The 9-Step Business Model Canvas Explained (2023 Update)

“A major mistake made by many start-ups around the world is focusing on the technology, the software, the product, and the design, but neglecting to ever figure out the business . And by “business” we simply mean how the company makes money by acquiring and serving its customers”.

-Reid Hoffman

After meeting with hundreds of entrepreneurs and business owners over the years I believe the LinkedIn co-founder and Blitzscaling author Reid Hoffman’s got it spot on.

People tend to focus on specific parts of their business, such as which software packages are being used, which is the cheapest supplier, how to optimize internal processes…?

They get so bogged down in the details of the day-to-day running that they lose the overall vision of their business.

Without this vision they are unable to scale, they make marginal profits, miss opportunities, struggle to innovate, and end up running “just another” business.

Another handy metaphor in understanding this common mistake is the soldier in the trenches .

Every meter of ground gained comes at a heavy cost, mistakes are made, and progress is hard-fought and slow…a day-to-day experience for 99% of entrepreneurs and businessmen.

But when you do have that 360 vision you see the entire battlefield. Decisions are much clearer, fewer mistakes are made, and progress is fast and methodical.

Fortunately, a business model framework exists that gives you both vision and clarity .

The Business Model Canvas provides entrepreneurs, business owners, and strategists with a tool to analyze, structure, and evolve a business while always keeping the bigger picture front of mind.

So let’s take a closer look at how it works.

Table of Content

What is the Business Model Canvas?

Created by Swiss entrepreneur and Strategyzer co-founder, Alexander Osterwalder, the Business Model Canvas is a visual representation of the 9 key building blocks that form the foundations of every successful business. It’s a blueprint to help entrepreneurs invent, design, and build models with a more systematic approach.

Why is it so popular within the business community?

Its simplicity. The business model canvas allows us to carry out a high-level analysis without drilling down and getting lost in the details. You just draw out the 9 building blocks on a blank canvas, fill them in as each concept relates to your business, and hang it somewhere everybody can see.

It’s a visual overview of your entire business on a single canvas.

While the Business Model Canvas is an extremely fluid concept and hyper-specific to individual companies, each canvas is still broken down into these 9 key building blocks:

Customer Segments

Value propositions, customer relationships, revenue streams, key resources, key activities, key partners.

When laid out on the canvas the model will look something like this:

While you’ve probably come across each of the 9 building blocks before, the attractiveness of the Business Model Canvas is that it confines them to a single page , not a traditional 42-page document.

This makes it a lot easier to digest, as well as assess existing business models or map out new ideas.

How do I fill out the Business Model Canvas?

To start your Business Model Canvas you will need to breakdown and analyze each of the 9 building blocks.

A good way to approach this is to gather the heads from marketing, sales, operations, finance, and manufacturing (if product-based) and pencil-in a morning where you can all meet together.

Then, after drawing a mock canvas onto a whiteboard, proceed to dissect and discuss each of the 9 building blocks as they relate to your business. You can use sticky notes to better organize your thoughts around the canvas.

If you are an entrepreneur or new business owner working alone and don’t have a team to bounce your ideas off, not to worry. You can still carry out your analysis before sharing it with a like-minded entrepreneurial community or forum, like those found on ThePowerMBA , to get useful, insightful feedback.

Whichever way you decide to approach it, I recommend you complete each block in the following order:

• Cost structure

For continuity, I’m going to use the fashion retail giant Zara when analyzing each of the 9 key building blocks.

If you’d like to skip to another case study similar to your own business, navigate to the table of contents at the top of the page and select one of the other business model canvas examples.

The first block of the Business Canvas Model is about understanding who is the most important customer(s) you’re delivering value to. Or, in other words, who are they? What do they do? And why would they buy your product or service?

Not a single company exists without its clients, making customer segments the best block to start with while drawing out your business model canvas.

A great exercise to define your customer segments is to brainstorm and create your company’s buyer persona (s) .

Buyer personas are fictional depictions of an ideal or hypothetical client. Typically when brainstorming a buyer persona you’d want to define certain characteristics (age, demographic, gender, income, industry, pain points, goals, etc.)

However, remember at this stage we want a snapshot of our customer segment. There’s no need to jump into great detail just yet.

In the case of Zara, there are three distinct customer segments to whom they offer different products.

The products created for each of these customer segments (clothing, shoes, and accessories) are not trans-consumable. That is to say, a woman’s dress is highly unlikely to be worn by a 7-year-old child.

Once we know exactly who it is we are targeting, it’s time to look at what we as a company have to offer.

The second phase is about figuring out your company’s value propositions , and importantly, your UVP (unique value proposition). The “what” that makes customers turn to you, over your competitors? Which of their problems are you best at solving?

Each value proposition consists of a bundle of products or services that fulfill the needs of a buyer persona from your customer segment. It’s the intersection between what your company offers, and the reason or impulse customers have for purchasing.

Some popular questions to ask while determining your UVP are:

• Which specific customer pain point are you trying to solve?
• What job are you helping customers get done?
• How does your UVP eliminate customer pain points?
• What products or services do you provide that answer this specific pain point?

So let’s try and apply this to Zara. Why do people choose to purchase from them, over their competitors?

Zara’s principal value propositions are fairly clear. They offer various ranges of stylish men’s, women’s, and children’s clothing and accessories at an affordable price.

But there’s more to it than that.

If we dive a little deeper we see Zara’s value propositions are more complex, which are behind the success of the brand:

Fast fashion

Zara adds new clothes and designs to its collections every 2-3 weeks, both in its stores and online. It keeps the brand updated, fresh, and modern while maintaining its all-important medium price point

Great eCommerce experience

Once you enter Zara’s online store you’re presented with a clean, easy-to-navigate, and high-end feel. The customer segments are visible on the left navigation bar with a search tab to further aid customers with their online experience.

Localized stores

You can find a store in nearly all major retail locations (shopping malls, retail outlets, airports, etc.) meaning accessibility is not an issue for the majority of consumers.

Flagship stores

Zara demonstrates its aesthetic evolution to customers through its flagship stores. The recent opening of their Hudson Yards , New York City flagship is a great example of this. Customers shop around its vivid, minimalist layout offering them an experience aligned with the brand’s deeper, eco-friendly values.

Zara Hudson Yards, New York

The next step is to ask yourself how you are reaching your customers, and through which channels ?

This includes both the channels that customers want to communicate with you as well as how they’ll receive your products or services.

Is it going to be a physical channel? (store, field sales representatives, etc.) Or is it a digital channel? (mobile, web, cloud, etc.).

Zara has 3 primary channels in which they communicate and deliver products to its customers:

• Direct sales through their stores
• Online (both app and website)
• Social media

Customers can go to a traditional “bricks and mortar” store to browse, model, and purchase different items of clothing at one of their retail stores.

Alternatively, they can shop online or through their mobile application and have the product delivered straight to their door or nearest store. The choice is completely up to them!

So that covers Zara’s commercial channels, but what about how they communicate with customers?

While they do communicate through their mobile app, their predominant channel is social media.

What’s more, they’re really, really good at it.

For example, did you know that Zara invests less than 0.3% of its sales revenue into advertising?

This is only possible due to an A-rated social media presence . Customer queries are not only dealt with quickly, but recommended re-works are sent back to HQ, forwarded onto in-house designers who then apply the feedback to future collections.

This customer-first approach through fluid communication channels has saved them thousands of dollars in marketing, strengthened their brand, and created a loyal customer base.

You should only step away from this building block once you’ve decided how each of your customer segments want to be reached.

Once you have acquired customers, you will need to think about how you can build , nurture, and grow those relationships.

Now, this can be automated and transactional like large eCommerce brands Amazon or Alibaba. Or, it could be at the complete opposite end of the scale and require a more personal relationship you’d typically have with a bank or your local bike shop.

Zara’s relationship with its customers is threefold, and lies somewhere in the middle of transactional and personal:

• Salesperson at store
• Brand through social media
• Sentimental attachment to a product

Yes, you have the initial transactional touchpoint at the store or online, something relatively impersonal and for many the only interaction they’ll have with the brand.

However, customers (especially in the fashion industry) are encouraged to continue to interact with a brand through social media platforms.

As we mentioned before when discussing channels, Zara has a very effective communication system in place. Not only can people instantly get in touch with the brand, but also engage with new posts, images, and collections uploaded to social media.

This personal approach to customer relationship building can, in some cases, lead to the natural growth of brand ambassadors and communities .

An attachment can also develop between customers and particular garments or accessories from one of their collections. The sentimental attachment to these products also creates another potential form of brand loyalty.

Now that you’ve described how you are going to create real value for your customers, it’s time to look at how you plan to capture that value.

What are your revenue streams? Is it going to be a transactional, direct sales strategy ? Are you going to consider a freemium mode l, where you give a portion of your product or service away for free with the idea of converting later on down the line?

If you’re a SaaS company such as SalesForce or Strava , then it’s likely that a licensing or subscription revenue model will be more appropriate.

At Zara, it’s extremely simple. They make their money by selling clothes and accessories either at a store or online.

As you can see, we’ve filled in the entire right-hand side of our business model canvas. We touched upon:

Customer segments

• Value propositions
• Revenue streams
• Distribution channels

Now it’s time to move over to the left side of the business canvas model and look at what we need, internally , to deliver our value propositions.

To start with, let’s take a look at key resources.

The key resources are all things you need to have, or the assets required to create that value for customers.

This could be anything from intellectual property (patents, trademarks, copyrights, etc.) to physical holdings (factories, offices, delivery vans, etc.) right down to finances (the initial cash flow perhaps needed to start your brand).

Another key resource every company needs to consider is its human capital . Are you going to need highly specialized software engineers? Or field-based sales teams?

They are relatively capital-heavy resources that need to be factored into your business model.

In the case of Zara, they are going to need a number of key resources if they hope to deliver their propositions:

• Stock management
• A large, interconnected network of physical stores
• A strong brand
• Logistics and supply chain infrastructure

Stock is vital for both online and offline customers.

If they are unable to supply their range of products and meet customer demands, satisfaction levels fall and they have a serious problem on their hands.

A large distribution network of brick and mortar stores combined with a strong brand name help mitigate these factors, as well as reinforce any ongoing marketing activities and communication efforts.

Finally, an efficient logistics process within Zara is critical, especially when you consider the complexities involved with such a large-scale operation.

They will require the necessary technology to analyze data on inventory, storage, materials, production, and packaging, with the staff to execute each of these stages and manage the delivery of the final products.

The next step is to define the key activities – the areas you need to be good at to create value for your customers.

To mix it up a little let’s take a look at a slightly different business in Uber .

Their key activities can be broken down into:

• Web and mobile app development
• Driver recruitment
• Marketing: customer acquisition
• Customer service activities : drivers’ ratings, incidents, etc.

They need a fast, clean UX for their customers using the app, drivers to carry out their service, and the ability to both market the product and deal with any customer queries.

Zara’s key activities will differ to those of Uber. Some of the things they need to consider would be:

• Manufacturing
• Retail process (point of sale and 3rd party management)
• Distribution channel / logistics

Design is a key activity as Zara’s value proposition is to provide stylish garments at an affordable price. Their collections need to be constantly updated to follow the latest fashion trends at the time.

To produce their collections Zara will also require manufacturing capabilities. Now Zara doesn’t own their own factories (we will get to that in the Key Partners section) but they still need to be involved in the garment manufacturing process.

Everything from fabric selection to pattern making, to detailing and dyeing affects the outcome of the final product which of course they have to then go on and sell.

The effective management of the retail and distribution channels (online, offline, shipping, and communication with providers) is also key. A breakdown in either of these activities, such as a poor relationship with an important provider will have serious consequences for the business.

Most modern business models now require brands to build out and work with various key partners to fully leverage their business model.

This includes partnerships such as joint ventures and non-equity strategic alliances as well as typical relationships with buyers, suppliers, and producers.

A great example of a strategic partnership would be between ThePowerMBA and Forbes . In exchange for exposure of our brand to the magazine’s global audience, we provide expertise and content on high-level business education programs.

As we touched upon when discussing key activities , Zara requires strategic partnerships with many different providers if they are to design and produce their collections.

Another key partner is their major holding company, Inditex .

Inditex has several subsidiaries including Massimo Dutti , Pull & Bear , and Oysho . Being a subsidiary of Inditex means they share a consolidated balance sheet, stakeholders, management and control, and various legal responsibilities.

While as a subsidiary Zara is afforded certain freedoms when it comes to design, delivery, and the general running of the company, the overall strategy will need to be aligned with Inditex and its other subsidiaries.

The final step of the Business Model Canvas is to ask yourself, how much is it going to cost to run this model?

This includes some of the more obvious needs such as manufacturing costs, physical space, rent, payroll, but also areas such as marketing activities.

If you are unsure of exactly what to include in your cost structure take a look at a Profit and Loss statement ( P&L ) from a competitor or company in a similar industry to yours. You’ll find many items overlap such as research and development ( R&D ), cost of goods sold, admin expenses, operating costs, etc.

Once that’s done you should prioritize your key activities and resources and find out if they are fixed or variable costs .

As Zara is such a large, corporate business they are going to have both fixed costs (rent, payroll, point of sales personnel) and variables, such as costs associated with the fluctuating sale of goods, purchase of materials and, manufacturing costs.

Once you’ve completed these 9 steps, your Business Canvas Model should look something like this:

Business Model Canvas Examples

Hopefully, you were able to get a good feel for the effectiveness of the business model canvas with our run-through of Zara.

However, if you found it difficult to follow due to the stark difference between your industries, I’m going to quickly go through 3 more companies to demonstrate the tool’s flexibility:

• Netflix (Media service/production)
• Vintae (Vineyard)

Even if these business model canvas examples don’t align exactly with your industry, I honestly believe that studying different models gives you a competitive advantage in your professional career regardless.

If you’re currently employed by a company, you’ll better understand how your specific role helps the company achieve some of its “long-term” goals.

Alternatively, if you are a business owner yourself (or perhaps thinking of starting your own business) you’ll have a better understanding of your business and where potential opportunities lay.

I’m sure you’re familiar with our next business model canvas example candidate, Netflix .

The global media company offers an online streaming service of various movies, documentaries, and TV programs produced in-house or licensed 3rd-party content. Their success sparked a revolution in the online media world with the likes of Amazon, Apple, Disney, HBO, and Hulu all rushing to launch their own online video streaming platforms.

Netflix started life as an online DVD rental company, basically a web version of the more popular (at least at that time) “bricks and mortar” Blockbuster.

Co-founder Reed Hastings predicted as far back as 1999 that the future of media was in online streaming, saying “postage rates were going to keep going up and the internet was going to get twice as fast at half the price every 18 months.”

It wouldn’t be until 2007 that Hasting’s prediction would become true when Netflix, as we now know it, was born.

So let’s take a current look at their business model canvas:

As you probably know, there are very few people out there who haven’t subscribed, watched, or at least heard of Netflix. There is content for everybody: wildlife documentaries, sci-fi movies, rom coms, action-thrillers, you name it – it’s there.

That’s why their customer segment can be classified as a “ mass market ” as the base is just so diverse.

All people require is a computer, TV, internet, and/or smartphone and they’re good to go. For most developed markets, that covers just about everybody.

Value Proposition

Whether on the train to work, sitting in the car (if you’re not driving!), or relaxing at home in front of the TV, you can consume their online, on-demand video streaming service.

They also have a huge library of content for consumers to choose from, ensuring that people keep coming back, as well as increasing their mass-market appeal.

They also produce high-quality, original content to differentiate themselves from their competitors.

Most people access Netflix either through their website or mobile/TV App . Another popular channel that you may have picked up on is their affiliate partners .

You’ve perhaps signed up for a mobile, TV, and internet package where the provider offers Netflix as an extra to sweeten the deal, so to speak.

That would be an example of an affiliate partnership between Netflix and mobile service providers.

I doubt many consumers have had direct contact with Netflix unless it’s to resolve a subscription issue or general query. It’s very much a self-automated service – you download the app, select the program you wish to watch, and hit play.

Very simple, very effective.

Again, this doesn’t need much embellishment. Netflix generates money from the different tiers and packages put together in their subscription services.

This varies depending on the region to account for local markets, but on the whole, it’s sold at a low price point.

Originally, Netflix’s Key Resources would have been their unrivaled DVD collection combined with a cost-effective mail-order system.

Nowadays it’s undoubtedly the rights to stream online video content. Netflix has brokered deals with some of the biggest production studios worldwide.

Combined with their huge library of in-house productions , it’s more than enough to encourage customers to renew their subscriptions.

To help sustain interest in their product, Netflix understands they need to serve-up relevant content for each sub-sector of their mass audience. Therefore their machine learning algorithm selects content for consumers based on streaming habits (what they watched, at what time, etc,.) to personalize the customer experience.

This explains why over 80% of all content streamed on Netflix was cherry-picked by this algorithm, making it a Key Resource for their business model.

Also, Netflix accounts for a whopping 12.6% of global bandwidth usage . The literal capacity to stream their services must be met meaning bandwidth must also be included here.

Content procurement is arguably their biggest Key Activity. They need to find people to produce and deliver their original content, including actors, studios, writers, etc. as well as secure the licensing and streaming rights from 3rd party producers such as Sony, Warner Bros, and Disney.

Finally, they need a fast, easy-to-use application to host their online streaming service. This needs to be available for both TV and mobile devices if they are to deliver their “on-demand” value proposition.

K ey Partners

Seeing as Netflix’s entire business model is largely based around streaming 3rd party content, key partnerships need to be built with production studios . No content, no Netflix!

Also, as we touched upon earlier Netflix is one of the largest consumers of bandwidth worldwide. If the speed and delivery of their streaming service are to be continued then deals will also need to be made with internet service providers (ISPs).

Netflix’s biggest expenditures come from both their in-house content procurement and 3rd party licensing agreements . The high-quality standard of video streamed on Netflix is only possible due to the speed and performance of its online platform and application , which has additional costs of staff, software, etc.

To show you just how flexible the business model canvas can be, I wanted to throw in a slightly leftfield example. Vintae is a Spanish wine producer who, after a detailed analysis of the business model canvas, was able to innovate and disrupt one of the world’s most competitive industries.

As some of you may know, the wine industry is extremely competitive. It’s also steeped in history and tradition , making it very challenging for newcomers to grab market share, let alone think about year-on-year growth and revenue.

However, CEO “Richi” Arambarri looked at the traditional “ bodega ” business model and saw a chink in its armor.

A “small” innovation in the business canvas model helped them to become one of the region’s most important winery groups, with over 10 installations and a presence across all regional denominations (Rioja, Priorat, Rias Baixas, etc.) with year on year growth of 30% – practically unheard of in such a competitive industry.

So how did Vintae analyze the business model canvas to find a niche in their market?

To answer that question, we must first look at the traditional winery business model .

As you can see, the wine industry has historically been patrimonial. Vineyards and estates are passed down through generations with the winery responsible for all phases of production, clarification, and distribution.

The traditional winery business canvas model suggests you must be the owner of the winery/vineyard where the wine is “manufactured”, meaning physical assets are a key resource of the business model.

So, if you wanted to start producing a Rioja, for example, you’d have to set up your vineyard in the region.

This is monumentally expensive as you need to:

• Purchase the land
• Plant a vineyard
• Absorb set-up and installation costs
• Deal with maintenance costs

It’s here where Vintae saw their opportunity.

What if we move vineyard ownership across the business model canvas from key resources to key partners ?

By leasing the equipment and space of large wineries (of which there was plenty), they could still produce their wine but reduce the cost and exposure associated with land purchase, crushing equipment, huge storage tanks, vineyard maintenance, and their bottling line.

This enabled them to focus on their sales, marketing, and distribution channels to create a better brand experience for their customers.

Also, it afforded them more flexibility when creating new wines as they were no longer confined to the limitations of grapes grown on their vineyard.

The lightness of this new business model eliminates maintenance overheads, channels energy into personalizing the customer experience, and allows for unprecedented levels of growth in one of the world’s most competitive industries.

Business Model Canvas Software

Although I did mention starting with a large whiteboard, sticky notes, and a pack of colorful sharpies there are several options in which you can digitize the business canvas model production process.

While I still believe the aforementioned process is extremely valuable (it gets your entire team’s input in a single hour-long session) you may decide it more viable for each member of management to pool their ideas digitally before sharing with the rest of the group.

If that’s the case, then take a look at some of the following software tools for creating your business model canvas.

Strategyzer

Created by the founders of the business model canvas Alex Osterwalder and Yves Pigneur , Strategyzer offers a range of business model canvas templates for you to get started with.

If you opt for the paid model (there is a 30-day free trial period) they offer a series of various classes that teach you how to build and test different value propositions and business models.

A real-time built-in cost estimator analyzes the financial viability of some of your business ideas, identifying alternative areas you may wish to explore with your model.

All-in-all, it’s a great resource to play around with and test some of your business ideas, with the option to dive into further detail if you see fit.

Canvanizer is a free, easy-to-use web tool that allows you to share links between team members who are brainstorming ideas for a business model canvas, but working remotely.

Like Strategyzer, there are several business model canvas templates provided to help you get started with your analysis. The strength of this platform is its accessibility. Much like a Google Doc., several people can brainstorm on the same canvas simultaneously with changes being synchronized automatically.

Business Model Canvas Tool

A ThePowerMBA alumni, impressed by the simplicity and effectiveness of the tool, went ahead and created the free application Business Model Canvas Tool .

It’s an incredibly intuitive, and easy-to-use tool that allows you to create templates simply by clicking the + button in each building block.

Each business model canvas created can be downloaded and shared as a pdf. with the rest of the team.

Would You Like to Learn More about Business Models?

If, after going through our 9-step guide on how to use the Business Model Canvas you’d like to learn more about different business model analysis tools , take a look at our alternative MBA business program .

As you’ll see, the course gives students a 360-degree view of business and management practices – such as engines of growth, segmentation and targeting, and value propositions.

I highly recommend you go check it out.

Regardless, I’d love to hear what you thought about this guide. Was it helpful? Would you like to see additional business cases analyzed from your industry?

Let us know in the comments below.

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13 Comments

Perfect thought

I am a DBA student. I have used your site a lot. Thank you for the information

Well defined steps, Thanks for good contents.

Dear Sir many thanks for you guideline. it was very effective for me. Thanks a Million

Well explained with practical business case

Wow, this article was incredibly helpful! I’ve heard about the Business Model Canvas before, but I wasn’t sure exactly how it worked or how to use it for my own business.

I need a sample of business model canvas for a beauty palour

you’ve done a great job. keep it up

This is a very insightful content with a step-by-step practical approach of how to write a BMC and what exactly it should contain.

My team and I literally used your guide to write a BMC for a project we were working on, and in just about an hour we were done.

Thank you so much for this content, it was really helpful.

Thank you very much Collins and we are glad you are using this tool.

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Thank you very much for the business model example of ZARA. It was very very informative

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• Top 5 Tips For Business Success by Freeduhm Team | Milyin - […] that market and have a chance to make money and become profitable. Additionally, you can use a business model…

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Hi, I'm Isaac.

I'm a consultant and advisor  for social enterprises - using business to change the world.

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Sep 8 How To Fill In A Business Model Canvas

(Thanks for reading, I’ve recently made an even better version of this article here )

The Business Model Canvas is a great way of mapping out an idea, allowing it to be understood, tested and improved.

The tool is a single page with nine connected boxes, which show how all parts of your business work together for success. It can be sketched anywhere – on a whiteboard, napkin or notepad. Filling one in can take between 15 and 30 minutes, and this guide will make the process clear and straightforward.

We’ll look at some entrepreneurs as they fill in their own canvases – it’s much easier if you get to watch somebody else.

They are: Josh – creating a bamboo toothbrush that’s both stylish and environmentally beneficial. Kylie and Dan – running Indigenous cultural experience programs for schools and families. Anna – selling a range of chilli sauces that are made in Fiji.

Business Model Canvas, strategyzer.com

Step 1: Naming the purpose of the business Without a clear purpose, how will we know if a model is good or not? This can be whatever you like, such as: To earn a passive income from home To prevent the destruction of Indonesian rainforests To improve the financial stability of our parent organisation To provide stable livelihoods for young people at risk of being homeless To improve the job hunting process

The great thing about this is that we now have a criteria for assessing our ideas, and have some inspiration for creative ways to reach this purpose.

Josh – “To reduce the amount of plastic that goes to landfill” Kylie and Dan – “To preserve and celebrate Indigenous culture, and explain its relevance in our daily lives” Anna – “To create meaningful employment in Fiji”

Step 2: Customers and Value Propositions There’s no particular order you have to follow on a canvas, although I’ve found this to be the best place to start. Your business is centred around your customers, the people who you believe will be motivated enough to try your new product/service in order to receive some sort of compelling benefit.

This is a real person, someone who is walking around right now. They’re looking for solutions to their current problems, and like finding ways to make their lives easier. Our job is to get a good understanding of this person: What are their jobs, tasks and obligations? What are their hopes, dreams and aspirations? What are their core beliefs and worldviews? Do they have a good understanding of how they might get what they want? This is what we list in the Customer Segments box .

Firstly, we group our customers into clusters, describing each of them by their common characteristics, i.e. small business owners, students, parents, etc. Secondly we write helpful descriptors of each customer segment. These might be Demographics like age, race, gender, height, income or postcode. These might be Psychographics like their political views, altruism, biases or preferences.

Keep in mind that our customers are the people who make decisions and pay for our products/services (not to be confused with the End User or the Beneficiary).

In the Value Propositions box, we describe what the customer is really looking for. This isn’t about what we sell them, but rather why it matters . These might be Gain Creators like increased social status, wellness, professional credibility or indulging our guilty pleasures. These might be Pain Relievers like fear of exclusion, social shame, regaining wasted time, or reduced anxiety.

We want to understand how our products/services make their lives better, to the point that customers will happily pay us for this Value Proposition.

Josh – We have two customers: 1. Young professionals who want to buy cool, environmentally friendly gifts for themselves and their friends. They love the aesthetics of the brushes and the story of the movement. It’s a simple way of doing something cool. 2. Mothers with young children, who want to create a mindset of environmental responsibility in their daily decisions. They like the personalised colours of each brush, and by making teeth brushing fun they get fewer objections from their kids twice a day.

Kylie and Dan – We have two customers: 1. Schools who want workshops and incursions for their primary students. They love how engaged the students are, and that it’s a great way to incorporate NAIDOC week each year.

2. Couples and families who want to learn more about Indigenous culture. They love learning about the rituals, connecting with nature and with the land, and the feeling they get from having a weekend away from hollow distractions.

Anna – We have three customers: 1. Supermarkets who stock our sauce. They love interesting products with good margins and high turnover.

2. Cafes and burger shops. They love having interesting brands of sauce that engage their customers, and hot sauces that are spicy without sacrificing flavour.

3. Home cooks, people who like chilli sauce. They love the brand and its cheeky packaging, and the unique heat/flavour of the sauce.

Step 3: Channels and Customer Relationships Now that we have a clear picture of who we’re serving and how we’ll delight them, we get to design three things: how we acquire them, how we keep them, and how we interact with them.

The Channels box is our chance to explain how we first encounter our customers, as well as how we deliver our Value Proposition. For example, your business might find customers through Google Ads or Facebook, then serve customers through face-to-face workshops or drop-shipped packages. We list both of these methods here.

The Customer Relationships box outlines how our interactions will unfold. Are we hoping for a long term relationship, or a short term relationship? Does each customer need to speak to a person, or use technology? If so, does it need to be a particular person, or the same one each time they come back? Will we need to work harder to acquire our customers or to retain our customers? Does one tend to happen more naturally than the other?

These two boxes tend to pair neatly together. By understanding our customer, their desires and their preferences, we can identify the best methods for recruiting and keeping them for years to come.

Josh – Our acquisition channels are Instagram and word of mouth, whereas our main delivery channel is through mail orders. Our customers are tough to acquire but are then quite loyal, and our transactions are highly automated. Once we find a way to tell the story and show them how great the product looks, it’s easy to get an order.

Kylie and Dan – Personal referrals are our best acquisition channel, but we’re keen to find new ways of reaching decision makers within primary schools, who usually make decisions six months in advance. Our online presence will need to improve, and we’re about to start testing keywords. Most of our customers come back each year, so our focus is on acquiring new customers, especially in off-peak times.

Anna – Supermarkets and cafes need an in-person pitch meeting, to hear the story and see the product for themselves. We have a hard time with retention, so there needs to be a long term personal relationship with each manager. Our direct customers come through our online channels, but tend to only order once.

Step 4: Key Resources, Key Activities and Key Partners These three boxes describe how the business will work “behind the scenes” – all of the operational components that make the Value Propositions a reality. We want to list all of the vital ingredients, important processes and invaluable allies that enable our business to exist. Key Resources are the people, places, machines, patents and intangible assets that are used every week. This is not a complete inventory, but a list of the resources that, if lost, would prevent the business from functioning.

Key Activities are the processes and tasks that must be completed in order for our customers to be served. e.g. If you were to go on Holiday, what would your replacement need to do in order for things to continue to run smoothly? These might include sales calls, workshop delivery, meal preparation or writing reports. In particular, these are the activities that you do particularly well. Since every business does a little bookkeeping, that’s probably not your Key Activity…unless you’re an accounting firm.

Key Partners are the people and organisations that take some of the responsibility off your shoulders. They might supply raw materials or finished goods, send customers your way, or act as a sponsor/enabler. Which external supporters are essential to the model? Who could make life difficult if they were to leave?

There’s some flexibility in these three boxes, it’s worth thinking about how you could outsource the tasks that aren’t your core skills to a partner, or how you could take things in-house to either save money or improve quality.

Josh – Most resources and activities have been better performed by partners, who grow the bamboo and manufacture the brushes. The essential resources are the brand, website, sales channels and the founder. The essential activities are advertising, fulfilling orders and meeting with stockists.

Kylie and Dan – The most essential resources are Kylie and Dan, as their knowledge and credibility are what make the entire operation possible. The essential activities are the promotion and sales of their events. They are currently looking for partners who can take the administration functions away from the founders, and who can introduce them to new schools.

Anna – Chilli farming and sauce manufacturing are performed by partners. The essential resources are the brand, the recipe/intellectual property, and the sales team. The essential activities are pitching to new supermarkets and cafes, maintaining existing relationships, and fulfilling the orders that come through the website.

Step 5: Cost Structure and Revenue Streams The bottom line of the canvas represents the bottom line of your business: Money in, money out, hopefully some money left over. We want to understand the ways in which money moves through the business. That means understanding the quantities (how our costs/prices are set) and frequencies (how often we get repeat customers/bills).

Cost Structures are the 7-8 biggest expenses – how much we spend, how frequently we spend it, and whether it changes as sales go up and down. These might include rent, wages, raw materials, advertising, fitting out the store, or paying commissions to other parties.

Revenue Streams are the prices each type of customer typically pays, as well as how frequently they come back. This helps us differentiate the big spenders from the one time shoppers, and highlights which offerings are purchased upfront versus those that are purchased over the following months and years.

Whilst these boxes aren’t a replacement for a proper financial model, they at least give us the ability to make basic forecasts, such as contribution margins and breakeven points. It also gives us a chance to think about our pricing strategy – clever pricing can massively increase the profitability of your new business.

Josh – The main costs within the business are the purchase of brushes (recurring costs that will decrease as the orders get larger), the cost of acquiring customers (ads and content creation) and the costs of fulfilling orders (packaging, postage and staff time). Revenue comes through one main product; 4-packs of brushes. This will need to be diversified, either through complementary offerings like floss or mouthwash, selling larger orders to different customers, or selling individual brushes.

Kylie and Dan – Kylie and Dan themselves are the main costs, with administration, travel and cost of sales (ticketing, materials, etc) the next largest.

Revenues are varied; schools pay a per-student rate of $15 that will increase in the future. Weekend camps are capped at 18 places at $375 each, so the amount of revenue comes down to the number of camps run each year.

Anna – There are a long list of costs, from the bottles to the sauce to the shipping and labelling, as well as the administration and sales staff wages.

Revenues all stem from the same product – 450ml bottles of sauce, but in different quantities and prices points. Supermarkets pay $6 per bottle, whereas cafes pay $8 and consumers pay the RRP of $12.95. That said, one supermarket buy more sauce than ten cafes.

Step 6: Linking The Boxes +Tidying Up Our boxes aren’t nine independent checklists, that wouldn’t help your idea. Instead the canvas keeps our ideas accountable; if we make a promise somewhere on the right, it will also need to be listed in one of the boxes on the left.

If we make claims about our happy customers, that should shine through in our Revenue Streams. If we expect to keep personal relationships with each customer, that will become a part of our Key Activities and Cost Structure.

This does two things: highlights the potentially overlooked activities and resources that are crucial for success, and makes us reconsider the expenses that don’t directly contribute to the Value Proposition. Long story short, you stop making big sweeping assumptions and waste less money.

We want the canvas to be as clear as possible, both for our benefit and for explaining the idea to other people. One way of making sense of the right hand side is to colour code each customer segment; this highlights which value proposition best delights each customer, and which revenue streams they each provide.

Step 7: Telling The Story Presenting a full canvas to a new person is not a good idea – there’s too much to take in. Instead, it’s best to fill in each box as you explain the idea. This makes the business much easier to understand, and creates a much richer appreciation of the model at the end. Even if you just list a few words in each box, this will take about 6-8 minutes to explain the full concept, and will remove a lot of misconceptions.

Step 8: Assumptions Testing Just because you wrote something clever on a canvas doesn’t make it a reality. For this reason, we start by assuming that all of the words on the page are assumptions, and our next job is to verify them – starting with the most crucial.

I find this is made easier with a simple Test Card, which asks you to name the big assumptions, pick a way of measuring the truth, and setting pass/fail criteria.

Research should be conducted with real people, and they need to be people who are in your customer segments. Just because your friends think it’s a cool idea doesn’t mean that the market will too. When you talk with your customers, don’t show them the canvas – it’s better to ask natural questions that help you fill in each box, rather than using all of the same terminology.

Step 9: Designing New Versions Good ideas survive competition, so it’s important that we don’t fall in love with the first idea. After your testing, you’ll start thinking up new adjustments that are worth exploring. Here are some suggestions to spark your creativity:

·      New Customer Segments ·      New Value Propositions (for the same Customer Segments) ·      New Products/Services (for the same or new Customer Segments) ·      Turning Services into Products ·      Turning Products into Services ·      New Partnerships ·      Franchise models (that aren’t reliant on a rare resource) ·      New delivery formats

Josh wants to test some new products with his current customers, whilst also looking at business class airlines and high end hotels, as they both want to provide toothbrushes to their customers whilst appearing environmentally responsible.

Kylie and Dan are going to test new styles of workshop that appeal to their school groups at different times of the year. They also want to bring on some trainees to learn how to run camps and workshops, so that the model is not as dependent on the two of them (which is a risk to their finances and their cultural intent).

Anna has heard that her supermarket customers want to see a wider range of products, so she’s going to test feasibility with her manufacturing partners and desirability with her customers.

What’s Next? Now that you have 3-4 interesting Business Model Canvases, some additional tools will make the future even clearer.

Customer Journey Mapping will give you insights into how you can better attract/serve/retain your customers.

Financial Models will reveal what makes the business financially viable, and highlight the sensitivities that will make or break the idea.

Value Proposition Canvases will dive deeper into your customers and their hidden motivations, creating more persuasive messages that will lure them in.

Sep 13 Social Enterprise University Assignments

Aug 30 Agreement vs Buy-In

How to create and use a business model canvas

Reading time: about 8 min

We’ve all had those flashes of entrepreneurial inspiration. You know, that brief moment when you think, “Hey, that would make a great business.” Most of the time, that’s as far as it goes. But say you want to take it a step further. (After all, every business, from tech giants to the lemonade stand down the street, started with a similar thought!) What’s your next step?

The business model canvas is essentially a framework for trimmed down business plans—and when we say trimmed down, we mean really trimmed down. As you use the business model canvas, you’ll take the crucial elements of your business model and put them into a single-page template. 

Unsure what those crucial elements are? Don’t worry—we’ll break down the whole process for you. 

What is a business model canvas?

The business model canvas is a template—think of it as a framework for organizing information about a business model. Alexander Osterwalder of Strategyzer came up with the method in the mid-2000s and it has been a staple of the Lean startup methodology ever since. 

At the center of the business model canvas is your value proposition: What do customers get from your product? That’s your starting point. From there, you’ll fill in the canvas with additional information about your company and your customers. The information in a business model canvas should be treated like a hypothesis: Under the conditions presented, could your business survive? It’s a quick and easy way to determine the viability of your model. 

Elements of the business model canvas

As mentioned above, the business model canvas is a template. No matter who is using the template, every business model canvas will look more or less the same. And they all consist of the same nine elements: 

• Value proposition 
• Key partners 
• Key activities 
• Key resources 
• Customer segments 
• Customer relationships 
• Cost structure 
• Revenue streams

Each of these elements is represented by a box on the page and these boxes are always organized in the same way. Everything related to business infrastructure (partners, activities, and resources) falls on the left side of the page. Customer-related elements (segments, relationships, and channels) go on the right. Finance-related elements go on the bottom. In the center of the page, the value proposition ties everything together. 

Layout is the easy part—it’s already been done for you. So let’s talk a little bit more about content: What do you actually include in each piece of your business model canvas? 

Value proposition

What are you offering customers? What problem or pain point are you solving? How are you going to do it? Answer those questions as succinctly as possible (one sentence is best!) and there’s your value proposition.  

Treat your value proposition like a guiding star: It should inform every other aspect of your business plan. 

Key partners

It’s unlikely that you’ll be able to provide your product or service all your own. Whether it’s suppliers or distributors, a parent company, or other partners, someone else is going to be involved. 

Think about a neighborhood lemonade stand: The kids running the stand aren’t growing their own lemons—they rely on a grocery store. Similarly, they probably get the table and pitchers from a parent. Both would be key partners. 

To determine if a partner is a key partner, ask this simple question: Could the business model function without them? If things would fall apart without them, they’re a key partner. 

Key activities

Activities are the actions required to actualize your value proposition.

Remember the lemonade stand from the last section? (It’s going to come up a lot.) What activities go into producing the product and bringing it to customers? Someone needs to make the lemonade, pour it, and take money from customers. These are all key activities.

To determine if an activity is “key,” ask the same question as before: Could the business model function without that action being performed?

Key resources

As you list your resources, be sure to consider more than just physical resources. You’ll likely also require human resources (employees), intellectual resources (know-how), and financial resources. 

Customer segments

Who is your solution for? A lemonade stand employee doesn’t have any need for a product developed for software engineers. (At least not your average lemonade stand employee.)

Your customer segments are the people and companies who would receive value from your product. As you list your customer segments, it might be helpful to think in terms of buyer personas. 

Customer relationships

Think about how you are first reaching potential buyers: Is it through social media? SEO? Conferences? These methods of contact are your channels. Whereas sales teams are typically responsible for building and maintaining customer relationships, channels are, for the most part, the responsibility of the marketing teams. 

Cost structure

As you operate your business, you’ll have to spend money—probably more than you’d like. To maintain your key activities, resources, and partners, you will need to pay employees, cover material costs, etc. These expenses make up your cost structure. 

Revenue Streams

Hopefully you’re not just spending money, though. For your business to be successful, you have to generate revenue. Your revenue streams refer to the ways in which you bring money in: How are you converting your value proposition into revenue? Perhaps you offer a subscription based service, or maybe customers pay a one time fee. Whatever model you use, be sure to list all of your revenue streams—when it comes to planning out finances, you want to be especially thorough. 

How to create a business model canvas

Now you’re ready to learn how to fill out a business model canvas for yourself. Understanding each element of the business model canvas is the hardest part, and that’s behind you: All that’s left is to fill out the canvas with your specific business plan.

1. Gather stakeholders and materials

Whether you’re creating a digital or physical business model canvas, you’ll need to be able to fill in the boxes on the template. This could mean typing your info into a digital template or drawing the business model canvas on a whiteboard or paper. (You should really just stick to a digital template—it’s 2020 after all. And a digital business model canvas means more collaboration, easier sharing, and cloud-based storage!)

As you fill in the business model canvas, you’ll likely need input from marketing, sales, and other teams. Schedule a meeting with the necessary individuals and fill out the template together. It’s a quick process—this meeting should only take between thirty minutes to an hour!

2. Fill out the canvas

Do you have your blank template and representatives from necessary teams? Good. You’re ready to start filling out the canvas. Remember: Your goal is not to create an exhaustive business plan. You’re trying to clarify the essential aspects of your business model and make any adjustments you feel necessary.

Start with your value proposition and work from there. If you need a refresher on any specific element, review the list above!

3. Test your assumptions

Your filled out business model canvas is a plan, but it’s not set in stone. As your team gathers information and offers insights, you may realize certain aspects of your model need to be changed. Perhaps you’ve listed a supplier as a key partner, only to find a different supplier with more competitive pricing. Or maybe you decided that a subscription model wasn’t the best payment plan after all. The business model canvas is meant to help you identify such adjustments—don’t hesitate to change things around!

4. Adapt and maintain

The business model canvas is often thought of as a planning tool—and it is a great one!—but its uses extend beyond the planning stages. As you adapt your business model based on insights from your business model canvas, update the canvas to reflect those changes. If you make drastic adjustments, you might even want to create a whole new business model canvas.

An up-to-date business model canvas is a valuable asset to have, regardless of where you are in your business plan. Whether it’s to show stakeholders your business model to gain buy-in or to onboard new employees, the simple format of the business model canvas makes it a flexible and versatile resource.

Now it’s your turn to create a business model canvas in Lucidspark.

Lucidspark, a cloud-based virtual whiteboard, is a core component of Lucid Software's Visual Collaboration Suite. This cutting-edge digital canvas brings teams together to brainstorm, collaborate, and consolidate collective thinking into actionable next steps—all in real time. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit lucidspark.com.

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Business Model Canvas: Explained with Examples

Got a new business idea, but don’t know how to put it to work? Want to improve your existing business model? Overwhelmed by writing your business plan? There is a one-page technique that can provide you the solution you are looking for, and that’s the business model canvas.

In this guide, you’ll have the Business Model Canvas explained, along with steps on how to create one. All business model canvas examples in the post can be edited online.

What is a Business Model Canvas

A business model is simply a plan describing how a business intends to make money. It explains who your customer base is and how you deliver value to them and the related details of financing. And the business model canvas lets you define these different components on a single page.   

The Business Model Canvas is a strategic management tool that lets you visualize and assess your business idea or concept. It’s a one-page document containing nine boxes that represent different fundamental elements of a business.  

The business model canvas beats the traditional business plan that spans across several pages, by offering a much easier way to understand the different core elements of a business.

The right side of the canvas focuses on the customer or the market (external factors that are not under your control) while the left side of the canvas focuses on the business (internal factors that are mostly under your control). In the middle, you get the value propositions that represent the exchange of value between your business and your customers.

The business model canvas was originally developed by Alex Osterwalder and Yves Pigneur and introduced in their book ‘ Business Model Generation ’ as a visual framework for planning, developing and testing the business model(s) of an organization.

What Are the Benefits of Using a Business Model Canvas

Why do you need a business model canvas? The answer is simple. The business model canvas offers several benefits for businesses and entrepreneurs. It is a valuable tool and provides a visual and structured approach to designing, analyzing, optimizing, and communicating your business model.

• The business model canvas provides a comprehensive overview of a business model’s essential aspects. The BMC provides a quick outline of the business model and is devoid of unnecessary details compared to the traditional business plan.
• The comprehensive overview also ensures that the team considers all required components of their business model and can identify gaps or areas for improvement.
• The BMC allows the team to have a holistic and shared understanding of the business model while enabling them to align and collaborate effectively.
• The visual nature of the business model canvas makes it easier to refer to and understand by anyone. The business model canvas combines all vital business model elements in a single, easy-to-understand canvas.
• The BMC can be considered a strategic analysis tool as it enables you to examine a business model’s strengths, weaknesses, opportunities, and challenges.
• It’s easier to edit and can be easily shared with employees and stakeholders.
• The BMC is a flexible and adaptable tool that can be updated and revised as the business evolves. Keep your business agile and responsive to market changes and customer needs.
• The business model canvas can be used by large corporations and startups with just a few employees.
• The business model canvas effectively facilitates discussions among team members, investors, partners, customers, and other stakeholders. It clarifies how different aspects of the business are related and ensures a shared understanding of the business model.
• You can use a BMC template to facilitate discussions and guide brainstorming brainstorming sessions to generate insights and ideas to refine the business model and make strategic decisions.
• The BMC is action-oriented, encouraging businesses to identify activities and initiatives to improve their business model to drive business growth.
• A business model canvas provides a structured approach for businesses to explore possibilities and experiment with new ideas. This encourages creativity and innovation, which in turn encourages team members to think outside the box.

How to Make a Business Model Canvas

Here’s a step-by-step guide on how to create a business canvas model.

Step 1: Gather your team and the required material Bring a team or a group of people from your company together to collaborate. It is better to bring in a diverse group to cover all aspects.

While you can create a business model canvas with whiteboards, sticky notes, and markers, using an online platform like Creately will ensure that your work can be accessed from anywhere, anytime. Create a workspace in Creately and provide editing/reviewing permission to start.

Step 2: Set the context Clearly define the purpose and the scope of what you want to map out and visualize in the business model canvas. Narrow down the business or idea you want to analyze with the team and its context.

Step 3: Draw the canvas Divide the workspace into nine equal sections to represent the nine building blocks of the business model canvas.

Step 4: Identify the key building blocks Label each section as customer segment, value proposition, channels, customer relationships, revenue streams, key resources, key activities, and cost structure.

Step 5: Fill in the canvas Work with your team to fill in each section of the canvas with relevant information. You can use data, keywords, diagrams, and more to represent ideas and concepts.

Step 6: Analyze and iterate Once your team has filled in the business model canvas, analyze the relationships to identify strengths, weaknesses, opportunities, and challenges. Discuss improvements and make adjustments as necessary.

Step 7: Finalize Finalize and use the model as a visual reference to communicate and align your business model with stakeholders. You can also use the model to make informed and strategic decisions and guide your business.

What are the Key Building Blocks of the Business Model Canvas?

There are nine building blocks in the business model canvas and they are:

Customer Segments

Customer relationships, revenue streams, key activities, key resources, key partners, cost structure.

• Value Proposition

When filling out a Business Model Canvas, you will brainstorm and conduct research on each of these elements. The data you collect can be placed in each relevant section of the canvas. So have a business model canvas ready when you start the exercise.  

Let’s look into what the 9 components of the BMC are in more detail.

These are the groups of people or companies that you are trying to target and sell your product or service to.

Segmenting your customers based on similarities such as geographical area, gender, age, behaviors, interests, etc. gives you the opportunity to better serve their needs, specifically by customizing the solution you are providing them.

After a thorough analysis of your customer segments, you can determine who you should serve and ignore. Then create customer personas for each of the selected customer segments.

There are different customer segments a business model can target and they are;

• Mass market: A business model that focuses on mass markets doesn’t group its customers into segments. Instead, it focuses on the general population or a large group of people with similar needs. For example, a product like a phone.  
• Niche market: Here the focus is centered on a specific group of people with unique needs and traits. Here the value propositions, distribution channels, and customer relationships should be customized to meet their specific requirements. An example would be buyers of sports shoes.
• Segmented: Based on slightly different needs, there could be different groups within the main customer segment. Accordingly, you can create different value propositions, distribution channels, etc. to meet the different needs of these segments.
• Diversified: A diversified market segment includes customers with very different needs.
• Multi-sided markets: this includes interdependent customer segments. For example, a credit card company caters to both their credit card holders as well as merchants who accept those cards.

Use STP Model templates for segmenting your market and developing ideal marketing campaigns

Visualize, assess, and update your business model. Collaborate on brainstorming with your team on your next business model innovation.

In this section, you need to establish the type of relationship you will have with each of your customer segments or how you will interact with them throughout their journey with your company.

There are several types of customer relationships

• Personal assistance: you interact with the customer in person or by email, through phone call or other means.
• Dedicated personal assistance: you assign a dedicated customer representative to an individual customer.  
• Self-service: here you maintain no relationship with the customer, but provides what the customer needs to help themselves.
• Automated services: this includes automated processes or machinery that helps customers perform services themselves.
• Communities: these include online communities where customers can help each other solve their own problems with regard to the product or service.
• Co-creation: here the company allows the customer to get involved in the designing or development of the product. For example, YouTube has given its users the opportunity to create content for its audience.

You can understand the kind of relationship your customer has with your company through a customer journey map . It will help you identify the different stages your customers go through when interacting with your company. And it will help you make sense of how to acquire, retain and grow your customers.

This block is to describe how your company will communicate with and reach out to your customers. Channels are the touchpoints that let your customers connect with your company.

Channels play a role in raising awareness of your product or service among customers and delivering your value propositions to them. Channels can also be used to allow customers the avenue to buy products or services and offer post-purchase support.

There are two types of channels

• Owned channels: company website, social media sites, in-house sales, etc.
• Partner channels: partner-owned websites, wholesale distribution, retail, etc.

Revenues streams are the sources from which a company generates money by selling their product or service to the customers. And in this block, you should describe how you will earn revenue from your value propositions.  

A revenue stream can belong to one of the following revenue models,

• Transaction-based revenue: made from customers who make a one-time payment
• Recurring revenue: made from ongoing payments for continuing services or post-sale services

There are several ways you can generate revenue from

• Asset sales: by selling the rights of ownership for a product to a buyer
• Usage fee: by charging the customer for the use of its product or service
• Subscription fee: by charging the customer for using its product regularly and consistently
• Lending/ leasing/ renting: the customer pays to get exclusive rights to use an asset for a fixed period of time
• Licensing: customer pays to get permission to use the company’s intellectual property
• Brokerage fees: revenue generated by acting as an intermediary between two or more parties
• Advertising: by charging the customer to advertise a product, service or brand using company platforms

What are the activities/ tasks that need to be completed to fulfill your business purpose? In this section, you should list down all the key activities you need to do to make your business model work.

These key activities should focus on fulfilling its value proposition, reaching customer segments and maintaining customer relationships, and generating revenue.

There are 3 categories of key activities;

• Production: designing, manufacturing and delivering a product in significant quantities and/ or of superior quality.
• Problem-solving: finding new solutions to individual problems faced by customers.
• Platform/ network: Creating and maintaining platforms. For example, Microsoft provides a reliable operating system to support third-party software products.

This is where you list down which key resources or the main inputs you need to carry out your key activities in order to create your value proposition.

There are several types of key resources and they are

• Human (employees)
• Financial (cash, lines of credit, etc.)
• Intellectual (brand, patents, IP, copyright)
• Physical (equipment, inventory, buildings)

Key partners are the external companies or suppliers that will help you carry out your key activities. These partnerships are forged in oder to reduce risks and acquire resources.

Types of partnerships are

• Strategic alliance: partnership between non-competitors
• Coopetition: strategic partnership between partners
• Joint ventures: partners developing a new business
• Buyer-supplier relationships: ensure reliable supplies

In this block, you identify all the costs associated with operating your business model.

You’ll need to focus on evaluating the cost of creating and delivering your value propositions, creating revenue streams, and maintaining customer relationships. And this will be easier to do so once you have defined your key resources, activities, and partners.  

Businesses can either be cost-driven (focuses on minimizing costs whenever possible) and value-driven (focuses on providing maximum value to the customer).

Value Propositions

This is the building block that is at the heart of the business model canvas. And it represents your unique solution (product or service) for a problem faced by a customer segment, or that creates value for the customer segment.

A value proposition should be unique or should be different from that of your competitors. If you are offering a new product, it should be innovative and disruptive. And if you are offering a product that already exists in the market, it should stand out with new features and attributes.

Value propositions can be either quantitative (price and speed of service) or qualitative (customer experience or design).

What to Avoid When Creating a Business Model Canvas

One thing to remember when creating a business model canvas is that it is a concise and focused document. It is designed to capture key elements of a business model and, as such, should not include detailed information. Some of the items to avoid include,

• Detailed financial projections such as revenue forecasts, cost breakdowns, and financial ratios. Revenue streams and cost structure should be represented at a high level, providing an overview rather than detailed projections.
• Detailed operational processes such as standard operating procedures of a business. The BMC focuses on the strategic and conceptual aspects.
• Comprehensive marketing or sales strategies. The business model canvas does not provide space for comprehensive marketing or sales strategies. These should be included in marketing or sales plans, which allow you to expand into more details.
• Legal or regulatory details such as intellectual property, licensing agreements, or compliance requirements. As these require more detailed and specialized attention, they are better suited to be addressed in separate legal or regulatory documents.
• Long-term strategic goals or vision statements. While the canvas helps to align the business model with the overall strategy, it should focus on the immediate and tangible aspects.
• Irrelevant or unnecessary information that does not directly relate to the business model. Including extra or unnecessary information can clutter the BMC and make it less effective in communicating the core elements.

What Are Your Thoughts on the Business Model Canvas?

Once you have completed your business model canvas, you can share it with your organization and stakeholders and get their feedback as well. The business model canvas is a living document, therefore after completing it you need to revisit and ensure that it is relevant, updated and accurate.

What best practices do you follow when creating a business model canvas? Do share your tips with us in the comments section below.

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FAQs About the Business Model Canvas

• Use clear and concise language
• Use visual-aids
• Customize for your audience
• Highlight key insights
• Be open to feedback and discussion

Using Business Model Canvas to Launch a Technology Startup or Improve Established Operating Model

• 24 min read
• Last updated: 23 Dec, 2021
• 1 Comment Share

Not that long ago, organizations had to rely on a number of established tools to build their business models, strategize, and innovate. The business plan use as we know it today started to decline in the 1980s and 1990s due to its complexity and time-consuming research process. This decline has – not surprisingly – been in step with the high-tech boom and Silicon Valley’s startup culture. A business plan was integral to any organization that wanted to be associated with innovation. But what does it mean today? Despite – maybe due to? – their age and conventional status, business plans take time, effort, engagement of top consultancies, and financial resources to compile. Today startups, especially of the tech variety, cannot afford such luxury. To keep up with competitors, grow rapidly, and innovate, they require a truly agile technique, a mind map of sorts that’s easy to write, edit, and comprehend. Back in 2004, business theorist Alexander Osterwalder and his professor at the University of Lausanne Yves Pigneur suggested a business model design that could replace cumbersome business plans. An approach that was soon named the Business Model Canvas (BMC) has since acquired a respectable number of loyal practitioners. Not only have startups employed the approach, but also such giants as Microsoft, SAP, and General Electric. Let’s find out what the Business Model Canvas is and explore the ways a software company can leverage this method to drive success.

BMC explained in less than 12 minutes

What is a Business Model Canvas?

The Business Model Canvas is a visual template for identifying and organizing different elements of your business model. It's divided the canvas into nine sections, each responsible for the most vital business elements of every organization.

• Customer Segments
• Key Partnerships
• Key Activities
• Revenue Streams
• Value Propositions
• Key Resources
• Customer Relationships
• Cost Structure

Classic scheme of Business Model Canvas

With the abundance of methodologies for building a business model , there must be something really special about the Business Model Canvas that has earned it a place among the classic tools. To start with a BMC, you will need : a small group of people, a board or a large sheet of paper, markers and sticky notes, and up to an hour of time. When you’ve gathered everything, it’s time to map out. Let’s get down in the weeds.

1. Conduct Customer Segmentation

Venmo’s Customer Segments

2. Choose Key Partnerships

Venmo’s key partners

Joint-ventures are created when you need to fill the gap that only another business can fill, for instance, sell your product to a new niche. When you’re partnering with a company that has a missing element you require, it helps you grow your audience and increase sales. The affiliate plan we discussed earlier could be considered a joint-venture as well. Just like enhancing someone’s SaaS product with your API (or vice versa) or offering your customer upsells from a third-party. Coopetition is a partnership between competitors. It usually happens when both companies are struggling to launch a product and want to spread the risks to achieve common revenue. For example, when Apple launched an iPad, the tablet became the biggest competitor to Amazon’s Kindle. So, the rivals cooperated to sell Amazon books via the iOS Kindle app, which helped Amazon to extend its e-book market and established iPad as a viable reading device. Sometimes coopetition partnerships lead to mergers. PayPal, for instance, was born from the merger of two competing financial companies.

3. Sketch Out Key Activities

Key Activities are what a company should do to make its business model work. For a pizza delivery service, it would be getting the freshest ingredients for the best price, preparing meals, organizing a call-center or a website, hiring couriers, etc. But in case you’ve developed an app that just gathers and transfers pizza requests, you have another set of actions such as supporting an app, organizing fast and seamless connections with partners, automatically updating menus, etc. According to Business Model Generation , you can unite all your activities into three main categories:

• Production.
• Problem-solving.

Venmo’s Key Activities

4. Find Relevant Revenue Streams

Depending on the product or service you are trying to sell, you need to have a clear understanding of the ways you’re going to drive revenue from each Customer Segment. A strategy that goes into identifying and managing your Revenue Streams is called a Revenue Model. Here are some of the revenue models that may work for you. See the article at the link for more information about monetizing your software business . Or check out our video on revenue models:

A 14-minute guide to revenue models

Venmo’s Revenue Streams

5. Describe Your Value Propositions

The Value Proposition is the reason for a customer to buy your product. A good Value Proposition is a unique combination of features that will either solve a customer’s problem or bring them additional value. The Value Proposition should be short. Make sure both you and your users can read it in less than 5 seconds and clearly understand what your product is all about. Drop vague descriptions and jargon. Here are a few outstanding examples of Value Propositions that work:

• Trainer-led audio workouts for a fraction of the price of a live trainer. ( Aaptiv )
• Free, fast, detailed and entirely offline maps with turn-by-turn navigation – trusted by over 65 million travelers worldwide. ( Maps.me )
• Bookmate is the perfect way to enjoy books — whenever, wherever. ( Bookmate )
• The world’s best companies use InVision to design the products you love. ( InVision )
• We help big brands scale WordPress. ( Pagely )

This map allows to describe your Value Propositions and Customer Segments in more detail Source: Strategyzer

You start with Customer Jobs on the right side of the map and sketch all big and small tasks you’ll help your customers accomplish with the product. Then move onto the Pains and Gains sections and describe every good and bad experience a customer has before, during, and after completing the job. Next, go to the left side of the map and define your Products and Services . This is simple – just list all products and services your value proposition is built around. Finally, outline how exactly your product’s services are eliminating pains and generating gains in the Pain Relievers and Gain Creators sections. For this exercise, invite people who are in direct contact with customers or people you are targeting.

In this video, we more techniques to help you identify your customer and market

Venmo’s Value Propositions

6. Outline Distribution Channels

Five phases of distribution channels

Venmo’s Distribution Channels

Post-purchase support. This is the phase that customers care a lot about. What is the cancellation policy? How do they contact you with a problem or a question? What is the onboarding process? Nowadays, many software providers use chatbots or a simulation as one of their post-purchase channel. (You can read our article about designing chatbots to learn more.) Also, you can send out customer surveys, track reviews and questions on social media, or create personal recommendations based on user activity.

7. Identify Key Resources

Venmo’s Key Resources

When evaluating your Key Resources, ignore those that would be common for any business, but pay attention to the ones that are strategically important to you. For Amazon Prime, Key Resources would be licensed rights to stream films and TV shows. For Microsoft, Adobe, or Google, it would be numerous patents. And insurance and banking organizations can’t survive without financial resources.

8. Choose a Customer Relationships Strategy

Venmo’s Customer Relationships

Automated service. This is how Netflix and Spotify maintain relationships with their customers. By providing AI-powered recommendations of movies and playlists, the services imitate human interaction and keep customers engaged. Communities. To better understand customers’ struggles and facilitate connections between users, a company can create a community around a product or a brand where users can exchange knowledge. Have a look at Oracle . Their community with half a million active participants helps customers find advice among fellow users. Co-creation. User-generated content is a feature of the modern web. Anyone who’s uploaded a video to YouTube has contributed a service. The role of the company, in this case, is to precisely match content creators and content consumers. Another good example is HiNative that allows people around the world to contribute questions and answers about their languages on the same platform.

9. Classify Cost Structure

Delivering Value, maintaining Customer Relationships, and buying Resources all incur costs. For a typical product development software company, the major operational expenses usually include research and development (R&D) costs, sales and marketing activities, and support costs. Let’s break them down:

• According to MarketRealist , only 10 to 20 percent of costs in the software industry go for research and development, only 5 percent of that sum is actually spent on innovation, and the rest goes to testing.
• Due to the large competition in the market, marketing expenses of software companies usually surpass R&D costs, which is why about 25 percent of revenue is spent on marketing and sales. Depending on the product, this number can vary.
• Support costs are related to handling customer requests and retaining your audience. Since it’s difficult to retain customers of a software product, a big chunk of expenses goes to Customer Success Management and churn prevention.

Apart from operational costs, your Cost Structure should include:

• Capital costs – investments that go into acquiring or upgrading physical resources, such as buildings and computers.
• Overhead costs – the general operational costs that have no direct impact on delivering a product, such as electricity, or a processing time for installation and testing software.
• Staff costs – resources spent on hiring, training, and retaining employees.

Venmo’s Cost Structure

Okay, we’ve covered the theory, but how do you map this all out in practice? We’ll give a few tips for planning your BMC session and avoiding common mistakes.

How to Coordinate a Business Model Canvas Workshop

The BMC methodology was created to be flexible, so there are no strict rules on how canvas mapping should work. There are, however, guidelines that will help you get started and not get lost. Time you will need: Up to 2.5 hours. Limit yourself for more concentrated work. Team to assemble: All concerned people should be present.

Workshop materials

The canvas was created in the pre-pandemic world, when in-person communication was preferable. But today, we know that distributed teams can be just as effective. So, we’ll describe what you’ll need in both cases. If you’re meeting in person , it’s recommended to have

• a large poster in B0 format or a white board of a comparable size,
• sticky notes of various colors,
• a camera to capture the resulting canvas.

For remote groups , make sure you have

• an online BMC template (we’ll list a few suggestions further). It doesn’t need to have collaborative features as one of the group members can be responsible for logging ideas.
• a plan B if technology fails. You can screen-record during the call or make screenshots at specific intervals so all data isn’t lost.
• pen and paper to capture ideas when people are waiting for their turn to speak.

How to fill the Business Model Canvas

Here are a few things that are important to make sure the Canvas works as intended. Don’t write directly on the Canvas. This concerns your BMC on paper or white board. Instead, place sticky notes. Ideas should be easy to add, move, remove, or simply change in order. One idea per note . Don’t create bullet lists on your sticky notes. If you don’t have enough space, be less expansive with your ideas or find a larger surface. Color code. If you have several very different target audiences, it will help to separate them by color and then use corresponding colors when describing their Value Propositions, Channels, Relationships, and so on. Use images . If you’re feeling creative, enrich your words with emojis, simple illustrations, or photos. We process things faster when there’s a visual attached, and it may give your teammates a better idea of what you mean. Stay minimalist . Remember, this is the place to create the strategic overview, not operational tasks. You may go into detail in one of the following workshops but start with the big picture.

Business Model Canvas in Real Life: Examples

Understanding how the approach works is one thing and following someone else’s example is entirely different. If you're still struggling to figure out what should go on your board, here are a few examples to get your wheels turning in the right direction.

A Lemonade Stand

Business Model Canvas for a Lemonade Stand

Business Model Canvas for Airbnb

Business Model Canvas for Uber

Business Model Canvas for LinkedIn

For more examples, visit business model examples on Strategyzer – a great collection of thorough models to inspire you or compare to well-known companies.

The benefits of using the Business Model Canvas

Visible connections. The design of the canvas directly illustrates the way elements are connected and provides a clear understanding of the impact the building blocks have on each other. That’s why it’s important to follow the specific order to fill in your business model. Changing and advancing. While many business strategy enthusiasts compare the BMC to a traditional business plan, these two methods have fundamentally different approaches. Business plans are heavy 100+-page documents that take time to write, read, and edit. The BMC is meant to be a living document that’s always changing and evolving. Thus, you and your team can make immediate decisions and add changes on the go. Enjoy the advantages of the BMC by trying out our convenient Business Model Canvas Tool . You can quickly fill in the boxes, create your business model canvas, and download it.

Value Propositions are always at the core. If you have another look at the canvas, you will notice that one element – Value Propositions – is placed at the very center of the canvas. It’s a backbone, a bearing wall that separates the front stage and backstage of your business theater. Speaking the same language. Eventually, the BMC makes your crew members understand each other better. By using the same definitions for reference, you provide a transparent communication between people and teams. You can take your BMC sheet to a meeting, brainstorm, use sticky notes to outline your new ideas, and later place the canvas directly on the wall, making it easier for ideas to be seen and adjusted.

What the BMC excludes and why it should not bother you

By looking at the model and even after starting to work with it, many entrepreneurs argue that it excludes a lot of key factors for creating a thriving business. Executives are bothered by the lack of external factors. What about competitors? And why not include the organization’s mission and priorities? The short answer is: Because that’s not what the BMC is for. But let’s provide a broader explanation.

• The main purpose of the BMC is to visually represent how you intend to build or develop a successful business. It’s a simple scheme aimed at defining the pathway in the constantly changing market and providing a concise overview of how your operational processes link up with one another.
• Just as you can’t include profit as a resource, an external impact is more of an outcome than a building block of your business. Thus, instead of trying to fit those elements into the canvas, you can adjust the internal processes when complications arise.
• Imagination is the key. You can’t make the model work for you unless you want to work on it as well. It’s not a silver bullet and it’s not meant to apply to each individual situation. So, don’t make the approach restrictive. Stay creative and inventive when working with the canvas. Combine it with other tools, such as a Value Proposition Canvas, or use adaptations of the methodology. One of the most popular is Lean Canvas.

Lean Canvas: A Startup Business Model

The Lean Canvas was created by Ash Maurya, CEO and Founder of LEANSTACK, as a version of BMC, specifically optimized for lean startups. The idea of a lean startup was introduced by Eric Ries in his titular bestselling book, where it was constructed on the following principles:

• handling uncertainty or venturing into marketing immediately,
• validated learning , meaning making discoveries as you go, and
• innovation accounting by defining and keeping in mind your success metrics.

Business Model Canvas evolving into Lean Canvas Source: Ash Maurya

Now, what do the updated canvas sections mean? The Problem part addresses the way startups often fail by not having the right product/market fit . So, to launch a successful business, you must start with correctly identifying and understanding what the market is lacking. After that, you can construct the Solution . Maurya wanted the small box of the canvas to “constrain entrepreneurs” and have them evaluate every idea that goes on the board, instead of sticking to the one they’re most passionate about. It’s also a great place to define your Minimum Viable Product (MVP) . To minimize the chaos of numbers, Maurya proposes focusing on a few Key Metrics , so that the startup can ignore everything else and doesn’t spend time and resources on wasteful activities.

We talk about all main metrics for a software product in this video

Finally, the  Unfair Advantage box must remind the startup that its success largely depends on how they’re different from similar products on the market and help preemptively plan for when followers and copycats enter the competition.

How the Business Model Canvas can help established businesses

You may now be thinking, “Okay, all this sounds great, but isn’t it another startup tool? What if I want to take a fresh look at my established company and see how I can make it better?” The tool’s versatility allows you to apply it in many different ways. You can strategize a logic behind a new initiative (like Amazon’s decision to allow its Prime users stream movies for free). Or even analyze the leaders’ success stories and learn to apply them to your business (see LEGO’s reinventing experience presented on a canvas). Osterwalder says, “Everybody needs to understand how to use this and use this as a shared language.” Here are just some of the reasons to use the Business Model Canvas for your established business.

• Detect opportunity gaps and find new perspectives.
• Create your competitors’ business models and compare them to yours.
• Keep track of external changes in each building block.
• Pitch investors using a visual representation that others can understand.
• Test new business models.
• Map out potential changes.
• Align your team’s goals and actions.
• Look at the business from a customer’s perspective.
• Analyze new opportunities, partners, and channels.

Remember that you aren’t using the BMC to confirm what you already know about your organization, but rather to find flaws and pinpoint the ways to make your business processes more effective, and after evaluating the changes, act upon them.

What now? Life after the Business Model Canvas

The BMC is not a tool that you use once or twice and forget about it till the next evaluation of your company. It was designed and invented to become a part of every business’ day-to-day life, a map to guide your ship between rocks and shallows. So, what happens after you’ve laid out your business model? Dashboard. Use the BMC to track the changes in your building blocks and the level of satisfaction of these changes. Color-code the most complex elements to focus on them more and attract the team’s attention to the current problems. Meetings . Use the BMC as a brainstorming instrument at meetings to unify new ideas and manage them later in your work. Understanding customers. You don’t have to create the BMC for companies only. Try understanding your customer by creating their own business models. For instance, SAP, the German software giant, uses the BMC in their pre-sales process . The SAP sales teams sketch the customer’s business model to prepare for sales meetings. Onboarding. When hiring new talent, especially top management, you can use the BMC to give them an immediate understanding of where your company stands and help them join the team smoothly.

Software to create a Business Model Canvas

Even though a traditional approach is to grab a large piece of paper (or a whiteboard), a Sharpie and start filling in the canvas, there are several options to digitize this process. There are a few opportunities for Business Model Canvas software for you to use. It shouldn't be too difficult to use, but make sure to find collaboration features if you create a canvas in a team. AltexSoft’s Business Model Canvas template . When we set out to create our free BMC template, we wanted to build a minimalist experience for quick idea sketching and note-taking. The boxes have prompting questions and you can receive the finished result by email. Canvanizer. This is a free, easy-to-use business model canvas tool that allows you to share the same canvas with your teammates using links similar to Google Docs so you can brainstorm together. You can export the canvas into CSV or an image format. Besides traditional BMC, Canvanizer suggests templates for various similar and related tasks. For instance, you can do SWOT Analysis, use Lean Canvas for startup planning, feedback canvas, customer journey canvas, and more. Strategyzer . The tool is much more complex than Canvanizer. It allows for creating a Business Model Canvas and a Value Proposition Canvas with real-time collaboration support. Strategyzer comes with a built-in estimator module that can analyze revenue streams and assess whether the business idea is financially viable. Additionally, the product suggests a Testing Dashboard for Lean Startup development and has a number of other additional features that justify its price, ranging from built-in help to sticker color coding and advanced encryption. The base version costs $25 per month and supports unlimited canvases and an unlimited number of users. The enterprise package includes multi-team collaboration, portfolio management, and offers dedicated coaching. CNVS. We used CNVS to create visualizations for this article. The tool is great if you don’t need bells and whistles but you like clean and slick design with cute monsters. And it’s totally free if you don’t consider subscribing to their newsletter a payment.  You can create traditional BMC, Feature Canvas, and Lean Canvas; share them with or with no editing access using a link; and that’s basically it.

“The same products, services or technologies can fail or succeed depending on the business model you choose. Exploring the possibilities is critical to finding a successful business model. Settling on first ideas risks the possibility of missing potential that can only be discovered by prototyping and testing different alternatives,” said Alex Osterwalder, creator of the Business Model Canvas. No business plan works out the way you intend it to. The only way to be prepared and effective in the ever-changing market is to stay dynamic and ready to act. Instead of spending months or even years developing a strategy that may not even materialize in the end, you can adjust your processes on the go in the existing environment and surpass competitors while you’re still growing. Moreover, you will stay connected to your team with the power of co-creation and be sure that you’re on the same page with every party involved.

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Business Model Canvas

Introduction.

The business model canvas is a great tool to help you understand a business model in a straightforward, structured way. Using this canvas will lead to insights about the customers you serve, what value propositions are offered through what channels, and how your company makes money. You can use the business model canvas to understand your own business model or that of a competitor! The Business Model Canvas was created by Alexander Osterwalder, of Strategyzer.

How To Use the Business Model Canvas

The business model canvas is a shared language for describing, visualizing, assessing and changing business models. It describes the rationale of how an organization creates, delivers and captures value.

Tool Overview

Customer Segments List the top three segments. Look for the segments that provide the most revenue.

Value Proposition What are your products and services? What is the job you get done for your customer?

Revenue Streams List your top three revenue streams. If you do things for free, add them here too.

Channels How do you communicate with your customer? How do you deliver the value proposition?

Customer Relationships How does this show up and how do you maintain the relationship?

Key Activities What do you do every day to run your business model?

Key Resources The people, knowledge, means, and money you need to run your business.

Key Partners List the partners that you can’t do business without (not suppliers).

Cost Structure List your top costs by looking at activities and resources.

Step-by-step guide

1 before you start.

You can learn a lot from your competition. Choose some competitors and map their business models. Armed with this information you’ll have deep insight into what customers want and what they are willing to pay for. You’ll have a clearer picture of just how customers’ needs are met across the entire industry, not just in your company. And, you’ll uncover vital information about how other businesses, maybe even very successful businesses, have created their own spaces in the market.

• Get the right team of 3-5 people together
• Grab a large chunk of wall space or a war room
• Print or draw the canvas on a big sheet of paper
• Have plenty of sticky notes and markers ready
• Allow yourself 45-60 minutes of undisturbed time

2 High Level

Start by mapping out the business on a high level: only the most important, vital aspects of the business model.

3 Connect the Building Blocks

Link up the building blocks: every value proposition needs a customer segment and a revenue stream!When everything is on the board, take a step back. Have a short break. Did you miss anything? Forget something?

Tip! If you have multiple customer segments it is best to pick a color for each segment. That way you easily see if for each segment there is a value proposition and a revenue stream.

Example Checkout the business models of BMW versus Tesla

4 Current State

Don’t mix ideas for a future state with what is going on right now, and don’t mix different departments!

Tip! If you work for a large organization you might find varying value propositions and business models. In that case, ask the different departments map out their own business model. Compare them afterwards.

Take a step back check if every customer segment is linked to a value proposition and a revenue stream. Make sure everything on the left side of the canvas is needed to support the right side of the canvas. Everything else can go.

Rank your business model's performance (0:bad, 10:excellent) for each of the following questions:

• How much does switching costs prevent your customers from churning?
• How scalable is your business model?
• Does your business model produce recurring revenues?
• Do you earn before you spend?
• How much of the work can be done by others?
• Does your business model provide built-in protection from competition?
• Is your business model based on a game-changing cost structure?

6 Next Steps

Tip! Have an artist visualize your business model. It helps creating impact when sharing the model and it makes it easier for others to become connected.

• Take a snapshot picture of your business model canvas for easy to share future reference
• Ask team-members discuss the business model with others
• Trigger team-members to actively look for 1-2 blind spots
• Filter out the design criteria
• Test your assumptions

Additional Resources

  business model generation ( alex osterwalder, yves pigneur ),   business model navigator ( oliver gassman, karolin frankenberger, michaela csik ),   design a better business ( patrick van der pijl, justin lokitz, lisa kay solomon, maarten van lieshout, erik van der pluijm ),   value proposition design ( alex osterwalder, yves pigneur ),   visual meetings ( david sibbet ), you may also like, business model patterns.

Download this free list of 100+ Business Model Patterns from WRKSHP.tools.

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6 Real Business Model Canvas Examples with Step-by-step Instruction to Create and Refine Yours

The Business Model Canvas (BMC) offers a visual representation of your entire business model, enabling better understanding, communication, and decision-making within your business. 

Here, we will instruct you step-by-step from basics to practical tips for creating a BMC and we will provide real business model canvas examples that you can review and learn how to use this tool for your business.

After reading this article you should be able to create it for your business.

Before starting the process, it is recommended to read the informative article, “ Business Model Canvas Cheat Sheet “ which will provide you with the foundational knowledge required to effectively utilize the BMC.

Step-by-step instructions for creating your business model canvas

Creating a business model canvas is an invaluable exercise for any entrepreneur or business owner looking to refine their strategy and enhance their understanding of their business model. In this step-by-step instruction, we will walk you through the process of designing a BMC using Osterwalder’s framework. 

By following these clear and practical steps, you can gain valuable insights into your business and set a solid foundation for future success.

Phase zero: Prepare yourself

• Gather a small team of your co-workers who have a clear vision of your business. Prepare a whiteboard or a big sheet of paper.
• Draw the Osterwalder’s canvas on the big sheet.
• Draw smaller canvases for each team member to encourage individual input and engagement. 

Phase one: Individual Exploration

During the first phase, allocate approximately 45 minutes to independently complete the BMC following these steps:

Start with “ customer segments ”. Try to write only the most important segments. You can use your defined “persona” to have a more clear understanding of each segment.

Write each segment on a Post-it note separately. 

Persona is a great complementary tool for “Business Model Canvas”. You can read more about the benefits of this tool and how to create it for your business in this article: “ How to create an accurate Buyer Persona ”

Pro tip: Write each segment on a different color Post-it. From now on, every color means a segment of your target market. This will help you a lot in the following steps.

For each segment of the previous step, try to find the values you are proposing to them. Write related values to each segment on the same color of Post-it. Focus on your main and unique value propositions.

It is possible to have mutual values on different colors of Post-it because it is a valuable service for two or more segments of your targeted market.

Pro Tip: You can have a neutral color of post-it to show the values that are common for all segments like the grey color in the provided business model canvas examples. 

Complete the other 7 blocks of the canvas using color-coded Post-it notes. Before completing each block, take a look at the definitions of each block and the business model canvas examples provided in this article.

Pro tip: While you are completing the “Revenue” section of the canvas, make sure you are thinking about your Pricing strategies. If you do not know what type of pricing is suitable for your business, read the “ Best Ecommerce Pricing Strategy ” article.

Phase two: Collaborative Discussion

Now it is time to share your ideas. Like the previous phase, start with the customer segments. Discuss your choices and decide on your final selected customer targets.

Pro Tip: Make sure that everyone has time to present and defend their selected segments. 

Write down the selected target on new color-coded Post-it notes. You will use these new colors for other blocks of your business model canvas. 

Discuss and decide on the remaining blocks and stick the final notes on the blocks of your canvas. Your final results can be something like this:

In this BMC, yellow, red, and blue notes are three selected segments. Grey ones show information that is relevant to all three segments. For example in the “customer relationship” block, there is only one grey note, which means we use the same customer relationship strategies for all three segments.

Phase three: Verification 

Now give your team a break, you have come so far by now. Just two more steps and you will be ready to go.

You have to review your final canvas and verify it. Try to ask yourself the following questions, then modify and polish your canvas.

• Is it based on facts? 
• Do we really provide these values? 
• Are we using these channels to connect with our customers?
• Do we have access to these resources?
• Are we actively engaging with our key partners?
• Do we have real customer information that approves our assumptions?

Now you can put your business model canvas in a shared space within your company so that everyone can see it. It will be your company’s guiding North Star which will direct your whole business even in the darkest of times. 

Phase 4: Continuous Refinement

Your business model is not and should not be written in stone. You need to keep your business agile and flexible. You need to embrace the changes and disruptive innovations that occur rapidly in your industry. Therefore, you have to review your business model and refine it on a regular basis. Whenever something is not written or you see a new opportunity, you need to adapt fast and take advantage of it.

Take the new AI boom that is happening right now. If your business is not responding and modifying itself based on the massive changes caused by AI, you are going to have a problem in the near future.

You can read more about this topic in the “ Current and Future Impact of Artificial Intelligence on Business ” article.

Benefits of Business Model Canvas

The Business Model Canvas is more than just a visual tool; it is a strategic powerhouse that can revolutionize the way you understand and shape your business. We explore some benefits that it offers:

• Provides a visual representation of the entire business model, facilitating understanding and communication.
• Encourages a holistic view of the business, fostering identification of gaps, opportunities, and areas for improvement.
• Facilitates strategic decision-making, allowing businesses to experiment and pivot their models more effectively.
• Enhances collaboration and alignment within organizations, enabling cross-functional teams to work together.

Business Model Canvas template

You can find plenty of Business Model Canvas templates on the internet. While many options exist, all templates offer the same thing: similar structures and components. If you prefer a tangible, paper-based approach, you can easily download a printable version from various sources. 

For your convenience, we also provide a high-quality Business Model Canvas PDF that embodies simplicity and clarity.

Alternatively, using online tools like Figma can streamline the process of preparing your Business Model Canvas. The choice of medium—whether digital or analog—is up to you. 

However, what truly matters is following the essential steps, regardless of the method you choose.

By sticking to the recommended steps, you ensure a systematic approach to capturing the key elements of your business model. 

Whether you opt for a traditional pen-and-paper method or leverage the convenience of online tools, the goal remains the same: to unlock the full potential of the Business Model Canvas and gain valuable insights into your business. 

Therefore, pick the approach that works best for you while remaining committed to the fundamental process.

6 Best Business Model Canvas examples

When it comes to designing your own business model, learning from real-world business model canvas examples can be incredibly valuable. By examining the BMC of renowned companies such as Uber, Netflix, Airbnb, and Amazon, we aim to inspire and ignite your creativity as you navigate the difficulties of your business.

Uber Business Model Canvas Example

We prepared a canvas for Uber as one sample of business model canvas examples. As you can see, we use 3 colors to fill in the elements. Green means drivers, blue means riders (passengers), and yellow belong to both segments.

For the rest of the business model canvas examples, we just provide the information needed to create BMC of other famous brands.

Netflix Business Model Canvas Example

From this point, for other business model canvas examples, we will fill in each of the canvas’s elements. You can draw the canvas for each of them using the business model canvas pdf template . The colors mentioned in brackets are showing the color of the Post-it notes. They will help you to identify the relation between the information in each element of the canvas.

Airbnb Business Model Canvas Example

Amazon Business Model Canvas Example

Be aware that in this Canvas we only analyzed the amazon.com website for buying and selling. We did not consider various services of Amazon like AWS. 

Business Model Canvas for Marketing Agency

For marketing agencies, creating a BMC can be very helpful. They have to provide various services and their customers can be from different industries with different company sizes. A well-designed Business Model Canvas for Marketing Agency can act as a lighthouse that lead the business in complicated situations.

As another business model canvas examples, we will explore how marketing agencies identify their target market, position themselves as industry experts, and develop comprehensive marketing strategies that yield measurable results in this part of the article.

Lean business model canvas

The Lean Business Model Canvas combines the concepts of the Business Model Canvas with Lean Startup methodologies. It emphasizes rapid experimentation, customer feedback, and iterative development to build a sustainable and scalable business model.

The Lean Business Model Canvas consists of the following elements:

Problem: Clearly define the customer problem or pain point that your product or service aims to solve.

Solution: Articulate your unique solution that effectively addresses the identified problem.

Key Metrics: Determine the key metrics that you will use to measure progress and evaluate success.

Unique Value Proposition: Identify the distinct value that your product or service offers to customers compared to existing alternatives.

Unfair Advantage: Highlight the unique advantages or barriers to entry that set your business apart from competitors.

Channels: Outline the most effective channels through which you will reach and engage with your target customers.

Customer Segments: Define the specific customer segments that you will target with your product or service.

Cost Structure: Identify the core costs associated with your business operations and delivery of value to customers.

Revenue Streams: Determine the different revenue streams or monetization strategies that will drive your business’s financial sustainability.

Key Insights

• The Business Model Canvas is a powerful tool that provides a visual representation of your entire business model, facilitating understanding, communication, and decision-making.
• It is recommended to read the “ Business Model Canvas Cheat Sheet ” article before starting to create and utilize the BMC.
• Creating a BMC includes different phases: individual exploration, collaborative discussion, verification, and continuous refinement. This will ensure a systematic approach to capturing the key elements of your business model.
• The benefits of using the Business Model Canvas include fostering a holistic view of your business, facilitating strategic decision-making, and enhancing collaboration and alignment within organizations.
• Various resources, such as Business Model Canvas templates, online tools like Figma, and real-world business model canvas examples from companies like Uber, Netflix, Airbnb, and Amazon, are provided to further assist you in creating your business model canvas.

Image Credit: Freepik

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• Create your own canvas

Create a new Business Model Canvas

The Business Model Canvas was proposed by Alexander Osterwalder based on his earlier book: Business Model Ontology . It outlines nine segments which form the building blocks for the business model in a nice one-page canvas. You can find a detailed explanation in his bestselling book "Business Model Generation".

If you want to try it a Business Model Canvas without entering your email address, please use our Canvanizer 2.0 Business Model Canvas Demo for a first impression.

Canvas Title:

Description :

Your Name :

More about the Business Model Canvas

The Business Model Canvas reflects systematically on your business model, so you can focus on your business model segment by segment. This also means you can start with a brain dump, filling out the segments the spring to your mind first and then work on the empty segments to close the gaps. The following list with questions will help you brainstorm and compare several variations and ideas for your next business model innovation.

Key partners

• Who are your key partners/suppliers?
• What are the motivations for the partnerships?

Key activities

• What key activities does your value proposition require?
• What activities are important the most in distribution channels, customer relationships, revenue stream…?

Value Proposition

• What core value do you deliver to the customer?
• Which customer needs are you satisfying?

Customer Relationship

• What relationship that the target customer expects you to establish?
• How can you integrate that into your business in terms of cost and format?

Customer Segment

• Which classes are you creating values for?
• Who is your most important customer?

Key Resource

• What key resources does your value proposition require?
• What resources are important the most in distribution channels, customer relationships, revenue stream…?

Distribution Channel

• Through which channels that your customers want to be reached?
• Which channels work best? How much do they cost? How can they be integrated into your and your customers’ routines?

Cost Structure

• What are the most cost in your business?
• Which key resources/ activities are most expensive?

Revenue Stream

• For what value are your customers willing to pay?
• What and how do they recently pay? How would they prefer to pay?
• How much does every revenue stream contribute to the overall revenues?

You love working with canvases? How about bringing innovation and collaboration to the next level with great canvases and a great app.

Canvanizer Free

• Basic Canvas templates
• Anyone with the link can access
• Can't change segment titles
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• Desktop only
• Single canvases only
• No team features
• English only
• The "old" look&feel

Canvanizer Premium

• Over 40 popular canvas templates
• Private canvases / Revocable links
• Customize segment titles
• Upload images / choose fonts
• Mobile editing & camera use
• Project workspaces
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• Languages: EN,ES,FR,IT,NL,PL...
• View modes, filters, sidenotes...

Choose a canvas template: