What is the Business Model Canvas, and how do I use it?

Sean Riordan
February 22, 2023
6
Strategy
What is the Business Model Canvas, and how do I use it?

What is the Business Model Canvas?

The Business Model Canvas is a visual chart with nine segments that provide a coherent framework to develop, describe, and analyse a business model.

It was devised by Alexander Osterwalder and Yves Pigneur, aiming to offer a more intuitive and flexible alternative to traditional business plans.

Image of Business Model Canvas
Image courtesy of https://www.strategyzer.com/

Download a PDF copy here: https://www.strategyzer.com/library/the-business-model-canvas-instruction-manual

Why Bother with It?

  1. Simple: Forget the 50-page business plans. Everything’s right there in front of you.
  2. Super Flexible: Change your mind about something? No sweat. Just tweak and move on.
  3. Team Game: Designed for group work, allowing for collective brainstorming. Two heads (or more) are better than one!

The Nine Building Blocks of the Canvas

  1. Key Partnerships: Who are your allies? Collaborators, suppliers, or even competitors can fit here.
  2. Key Activities: What crucial tasks keep your business ticking? This could be anything from software development to handcrafting artisanal chocolates.
  3. Key Resources: What assets are vital for your success? Think of physical goods, intellectual properties, or even your staff.
  4. Value Propositions: What sets you apart? This is the unique flavour of value you bring to your customers.
  5. Customer Relationships: How will you interact with your clients? Via personalized service? Automated systems?
  6. Channels: Think of the journey your product takes from you to your customer. Is it sold online, in a physical store, or both?
  7. Customer Segments: Who are you serving? Knowing your audience is critical: are they corporations, consumers, or niche communities?
  8. Cost Structure: Lay out your major costs. Consider materials, salaries, rent, and more.
  9. Revenue Streams: How does your business earn? Through sales, subscriptions, or affiliate marketing?

How to Use the Business Model Canvas

  1. Start Blank: Begin with an empty canvas. You might think it's easier to start with someone else's', but that will probably cloud your responses.
  2. Brainstorm: Use sticky notes to jot down ideas for each segment. This keeps the process fluid and adaptable.
  3. Work Collaboratively: Invite team members, mentors, or stakeholders to contribute. Different perspectives can enhance the model.
  4. Iterate: Your first draft won't be perfect. Revise and adjust as you gather more information or as conditions change.
  5. Stay Visual: Use drawings, diagrams, or colour codes. The canvas is a visual tool—make the most of it!

Conclusion

The Business Model Canvas encourages clarity, adaptability, and collaboration. Whether you're a budding entrepreneur or an established business looking to pivot, the canvas is a powerful ally to have in your toolkit.

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