How to use a Business Model Canvas
The Business Model Canvas is a popular modern planning tool for start-ups. It’s just a single sheet divided into nine key subject areas. For many, it’s a simple and quick alternative to the traditional business plan template.
Got a business idea? Use the Canvas to analyse it. It can bring clarity and confidence. It will also get you thinking of new ideas and opportunities.
Use the Canvas for business ideas, existing projects or even to examine competitors.
Complete your Business Model Canvas
1 Customer segments
This area is about who you will sell your products or services to. Here you should list all the types of customers you’ll have. Include brief profiles for these customer types: what are their demographics? What is their lifestyle? What do they value? What do they need?
2 Value proposition
Here you should detail how you’ll solve your customer’s problem. What value will you deliver to the different customer segments? What will you offer that is unique – and why will your customers prefer your solutions to others? Order these values by the priorities of each customer type.
3 Customer channels
How will you reach your customers? Where will you communicate and sell to them? Here you should list all the specific channels you’ll use Eg social media, flyers, telephone calls, events
4 Customer relationships
In this section explain how you’ll maintain a relationship with customers over time. What kinds of communication will you have with them? For example, will you offer them extra products or services (‘upsell’)? Will you email special offers to engage them at key times?
5 Revenue streams
List all the ways you’ll make money. How do these relate to the different customer segments? Do you have mixed pricing? Do you have more than one product or service?
6 Key activities
What will your business actually involve? What are all the essential activities you’ll need to perform for your business to work? These are not just the things that generate income. List also the things you have to do to sustain the business (eg marketing). Look at the other areas of the Canvas and ask yourself what creates activities.
7 Key resources
Detail the resources you’ll need to create and deliver your value proposition: office space? Computer? 3D Printer? Shop? Website? High speed internet? What people are involved in your business and what do they do? What money do you need available to run your business? Key resources are all the assets you’ll use to create your value proposition, and that includes your intellectual property.
8 Key partners
What partnerships are critical to your business? Include all partners, suppliers and collaborators. Explain the nature of the relationship (how you value each other) and how it is maintained. How do these partners relate to your key activities?
9 Cost structure
What will it cost to launch and maintain your business? Think about all the things you’ll have to spend money on. Include one-off costs and repeat costs, like website hosting or rent. Look at all your key activities and what they will cost.
Congratulations – you’ve completed your Business Model Canvas! To see some examples of how others have filled in their template, take a look at ‘Business Model Canvas 101’ by Emad Saif. In these slides, Emad shows what a Canvas would look like for Flickr, Gillette, Skype and a lemonade stand. You can also submit your Canvas to beepurple for feedback.
The Business Model Canvas was conceived by Alexander Osterwalder of strategyzer.com.