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.

Business Model Canvas Explained

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.  

Business Model Canvas Template

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.

Customer Persona Template for Business Model Canvas Explained

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.

Customer Journey Map

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).

Value Proposition Canvas

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.

Join over thousands of organizations that use Creately to brainstorm, plan, analyze, and execute their projects successfully.

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

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Amanda Athuraliya is the communication specialist/content writer at Creately, online diagramming and collaboration tool. She is an avid reader, a budding writer and a passionate researcher who loves to write about all kinds of topics.

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

business model canvas sequence

Written by Raquel Alberdi

Business | entrepreneurship, 16 comments(s).

Business Model Canvas

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

business model canvas sequence

“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:

 Scheme of business model in which 9 important fields are developed for its execution.

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.

Customer segment business model canvas for Zara company

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.

Zara Customer Segments business model canvas template showing the development of the 9 fields

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.

Zara's Canvas business model where you can see the innovative presentation of its image

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's Canvas business model where you can see the innovative presentation of the image of its stores

Zara Hudson Yards, New York

Business Model Canvas Template Zara - Value Propositions

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.

Zara Channels business model canvas template where its components are developed

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.

The relations with Zara's clients to give a Business Model Canvas where the 9 points to be developed are seen

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.

Zara business model canvas template for the development of Revenue streams within the 9 points to work

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.

Key resources of the Zara Business Model Canvas

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.

Zara business model canvas template where the Key Resources are developed

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.

Zara business model canvas template showing the key activities for its development

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.

Zara Key Partners business model canvas template where the eighth point is developed

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:

Netflix business model in which the 9 topics are taken into consideration

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 .

Traditional Winery Business Model with its 9 developed points

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.

Vinate business model

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.


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.


What’s it like to take one of our programs.

The best thing is to try it yourself with these classes that are totally FREE! Sign up and experience being part of the business school that has challenged the traditional educational model.

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Tools, concepts, business methodologies… Find out with this test! (it won’t take you more than 3 minutes)

business model canvas sequence

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Ayeah Goodlove

Perfect thought

kourosh abdollahzadeh

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

KJ Hwang

Well defined steps, Thanks for good contents.

Reza Ebadi

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

Debashis Rout

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

Opoku Samuel

you’ve done a great job. keep it up

Claudia Roca

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.


Insightful! Gave me the clarity I needed for my upcoming business. Thank you so much.


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


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Thank you very much for reading and sharing your comments

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Really great tool for business and whom want to enter,. Thanks


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Strategic Management Insight

Business Model Canvas (BMC)

Business Model Canvas

What is the Business Model Canvas

Business Model Canvas (BMC) is a framework that helps determine how a business creates, delivers, and captures values. It is a visual representation of the important aspects or parts to consider when designing a Business Model.

BMC aids in constructing a shared understanding of a business by condensing it into a simple, relevant, and intuitively understandable one-page visual while not oversimplifying the complexities of how enterprises function.

This concept has been applied and tested around the world and is used in organizations such as GE, P&G, Nestlé, IBM, Ericsson, and Deloitte, including Government Services of Canada and many more [1],[2] .

The Nine Building Blocks

BMC describes a business through nine basic building blocks that show the logic of how a business intends to make money. These nine blocks cover the four main areas of a business: Customers, Offer, Infrastructure, and Financial Viability.

BMC acts as a shared language for describing, visualizing, assessing, and changing business models. It is like a blueprint for a strategy to be implemented through organizational structures, processes, and systems.

Nine building blocks of a business

Each of these blocks is explained in more detail as follows:

1. Customer Segments (CS)

These are the groups of people or organizations that a business aims to reach and serve. Customers are the heart of a business model, and without (profitable) customers, a business cannot survive.

Customers are grouped into distinct segments with common needs, common behaviors, or other attributes. Customer groups represent separate segments if:

  • Their needs require and justify a distinct offer.
  • They are reached through different Distribution Channels.
  • They require different types of relationships.
  • They have substantially different profitability.
  • They are willing to pay for different aspects of the offer.

An organization must make a conscious decision about which segment(s) to serve and which segments to ignore. Once this decision is made, a business model can be carefully designed around a strong understanding of specific customer needs.

The following two questions, if answered with clarity, help a business identify its CS.

  • For whom are we creating value?
  • Who are our most important customers?
  • What are the customer archetypes?

Examples of some of the Customer Segments are shown in the figure:

Examples of Customer Segments

2. Value proposition (VP)

Value Proposition describes the bundle of products and services that create value for a specific Customer Segment chosen by a business.

A VP is the reason why customers turn to one company over another. VP must solve a customer’s problem or satisfy a need. A business can have more than one VP, but each must consist of a selected bundle of products and/or services that caters to the requirements of a specific Customer Segment.

While some VPs may be innovative and represent a new or disruptive offer, others may be similar to existing market offers but with added features and attributes.

An organization’s VP must answer the following questions with clarity:

  • What value do we deliver to the customer?
  • Which one of our customer’s problems are we helping to solve?
  • Which customer needs are we satisfying?
  • What bundles of products and services are we offering to each CS?

Elements from some of the following can contribute to customer value creation:

Examples of Customer Value Propositions.

3. Channels (CH)

Channels describe how a company communicates with and reaches its Customer Segments to deliver a Value Proposition.

Channels are customer touch points that play an important role in the customer experience and serve several functions, including:

  • Raising awareness about a company’s products and services
  • Helping customers evaluate a company’s Value Proposition
  • Allowing customers to purchase specific products and services
  • Delivering a Value Proposition to customers
  • Providing post-purchase customer support

To establish an effective channel, a company must first answer the following:

  • Through which Channels do our Customer Segments want to be reached?
  • How are we reaching them now?
  • How are our Channels integrated?
  • Which ones work best?
  • Which ones are most cost-efficient?
  • How are we integrating them with customer routines?

There are five distinct phases (figure below) through which a channel passes, and it could cover more than one of these phases at a time.

Different phases of channels

Channels can be either direct, indirect or hybrid, as shown:

Different types of channels

Finding the right mix of Channels to satisfy how customers want to be reached is crucial in bringing a Value Proposition to market and can create a great customer experience.

4. Customer Relationships (CR)

Customer Relationships describe the types of relationships a company establishes with specific Customer Segments. Relationships can range from personal to automated. An organization’s CR strategy may be driven by one of the following motivators:

  • Customer acquisition
  • Customer retention
  • Boosting sales (upselling)

A business can arrive at the optimum CR by asking the following questions:

  • What type of relationship does each of our Customer Segments expect us to establish and maintain with them?
  • Which ones have we established?
  • How costly are they?
  • How are they integrated with the rest of our business model?

Several categories of Customer Relationships may co-exist in a company’s relationship with a particular Customer Segment. Some of which are:

Types of Customer Relationships

5. Revenue Streams (RS)

Revenue Streams represent the company’s cash (earnings) from each Customer Segment and are like the arteries of any business.

Revenue streams

There are two distinct categories of Revenue Streams:

  • Transaction Revenues which are one-time customer payments
  • Recurring Revenues that are ongoing payments to either deliver a Value Proposition to customers or provide post-purchase customer support

A business can arrive at its ideal revenue stream by asking the following questions:

  • For what value are our customers willing to pay?
  • For what do they currently pay?
  • How are they currently paying?
  • How would they prefer to pay?
  • How much does each Revenue Stream contribute to overall revenues?

There are several ways a business can generate revenue, such as:

Types of Revenue streams

A business may have one or more Revenue Streams, each with different pricing mechanisms. The choice of pricing mechanism greatly influences the revenues generated.

There are two main types of pricing mechanisms, Fixed and Dynamic, as follows:

Types of Pricing Mechanisms

6. Key Resources (KR)

The Key Resources describe the most important assets required to make a business model work.

These resources allow an enterprise to create and offer a Value Proposition, reach markets, maintain relationships with Customer Segments, and earn revenues. Different Key Resources are needed depending on the type of business model.

For example, a chip fabrication business like TSMC [9] requires capital-intensive facilities worth billions of dollars, while a chip designer like NVIDIA [10] would need skilled manpower as its Key Resource.

Key Resources can be owned or leased by a business or acquired from its key partners. They can be identified by answering the following questions:

  • What Key Resources do our Value Propositions require?
  • What resources are required to sustain our Distribution Channels, Customer Relationships and Revenue Streams?

Key Resources can be categorized as follows:

Key Resources

7. Key Activities (KA)

Key Activities describe the most important things a company must do to make its business model work. They are required to create and offer a Value Proposition, reach markets, maintain Customer Relationships, and earn revenues.

Key Activities differ depending on the business model type. For example, Microsoft’s Key Activity is software development, while for Dell, it is Supply Chain Management. For a consultancy firm like McKinsey, Key Activity is problem-solving.

A business can identify its Key Activities by answering the following questions:

  • What Key Activities do our Value Propositions require?
  • What activities directly contribute to maintaining our Distribution Channels, Customer Relationships and Revenue Streams?

Key Activities can be categorized as follows:

Key Activities

8. Key Partnerships (KP)

The Key Partnerships describe the network of suppliers and partners that make the business model. There are four types of partnerships:

Four types of partnerships

A business must ask the following questions before forming partnerships:

  • Who are our key partners?
  • Who are our key suppliers?
  • Which Key Resources are we acquiring from partners?
  • Which Key Activities do partners perform?

Primarily, there are three motivations for a business when creating partnerships, as shown:

Three motivators to creating partnerships

9. Cost Structure (CS)

Cost Structure describes all costs incurred to operate a business model. A business incurs costs in creating and delivering value, maintaining customer relationships, and generating revenue. Costs are business-specific, where some are more cost-driven than others.

A business must answer the following questions to arrive at an optimum cost structure:

  • What are the most important costs inherent in our business model?
  • Which Key Resources are most expensive?
  • Which Key Activities are most expensive?

While costs should be minimized in every business model, it is useful to distinguish between two broad classes of business model Cost Structures:

  • Cost Driven : This model focuses on minimizing costs wherever possible. This approach aims at creating and maintaining the leanest possible Cost Structure, using low-price Value Propositions, maximum automation, and extensive outsourcing. Examples: No frills airlines like Southwest & easyJet, Fast food joints such as McDonald’s & KFC.
  • Value Driven: Premium Value Propositions and a high degree of personalized service usually characterize value-driven business models. Examples: Luxury hotels, Expensive Cars like Rolls-Royce

Cost Structures can have the following characteristics:

characteristics of cost structures

Putting-it-all together

The nine business model Building Blocks form the basis for a handy tool, which is called the Business Model Canvas (figure below). This tool resembles a painter’s canvas preformatted with nine blocks that allow painting pictures of new or existing business models. It is a hands-on tool that fosters understanding, discussion, creativity, and analysis.

Template for The Business Model Canvas

BMC works best when printed out on a large surface such that groups of people can jointly note, sketch, and discuss business model elements.

Example of Business Model Canvas

Nespresso [17] , a fully owned daughter company of Nestlé, changed the dynamics of the coffee industry by turning a transactional business (selling coffee through retail) into one with recurring revenues (selling proprietary pods through direct channels).

The two-part strategy involved selling their patented coffee machine to retail customers first to lock them into the brand. This generated a recurring demand for coffee refills (pods) that led to constant revenues. These pods were sold directly through mail/website/own stores, thereby eliminating middlemen/dealers, which further increased profits [1] .

Nespresso’s strategy plotted on a Business Model Canvas looks as follows:

Example of business model canvas

Business Model Canvas helped Nespresso establish a solid and enduring foundation by engaging consumers directly and bringing a barista-like experience within the reach of a home or an office.

Advantages & Limitations

  • Encourages Collaboration – collaborative framework, which helps put different business stakeholders in sync. This improves the likelihood of generating new ideas and their quality.
  • Facilitates testing of ideas before launch – allows business owners, strategists, and managers to think through business ideas as well as test concepts that would otherwise get tested with potential customers where the stakes are higher.
  • Customer-centered approach – Key customer segments, relationships, activities, and value propositions are all elements that focus on creating, delivering, and capturing value for customers.
  • Clarity – Analyzing the business through the lens of nine blocks brings better clarity and structure to the business model.


  • Lacks a section for defining the start-up’s mission statement, which is crucial to understanding the goals and objectives of any business.
  • Overlooks the importance of a profit mechanism beyond costs and revenues, including decisions on how to use potential profits.
  • The order of the canvas is not intuitive, making it difficult to read and understand the strategic decisions in a logical sequence.
  • Does not depict interconnections between different elements, which can have a significant impact on the overall business model.
  • Fails to acknowledge the company’s role within its ecosystem, including its impact on the environment and local communities.
  • External factors such as competition, history, and other industry-specific factors are absent from the canvas, which can greatly influence the success of a business model.

1. “A Better Way to Think About Your Business Model”. Harvard Business Review, . Accessed 01 Aug 2023

2. “Business Model Generation”. Alexander Osterwalder, . Accessed 28 Jul 2023

3. “The Apple M1 is a revolution that is changing the computing world”. Citymagazine, . Accessed 29 Jul 2023

4. “Mass Customization”. Corporate Finance Institute, . Accessed 29 Jul 2023

5. “Moka Pot”. Wikipedia, . Accessed 29 Jul 2023

6. “NetJets Homepage”. NetJets, . Accessed 01 Aug 2023

7. “Distribution Channels – Definition, Types, & Functions”. Feedough, . Accessed 30 Jul 2023

8. “Lease from Hertz”. Hertz, . Accessed 30 Jul 2023

9. “TSMC”. Wikipedia, . Accessed 30 Jul 2023

10. “NVIDIA”. Wikipedia, . Accessed 30 Jul 2023

11. “BMW, Daimler, Ford and Volkswagen team up on high-power charging network”. Techcrunch, . Accessed 31 Jul 2023

12. “Honda And Sony Combine Talents To Build Electric Vehicles”. Forbes, . Accessed 31 Jul 2023

13. “Uber and Spotify launch car music playlist partnership”. BBC, . Accessed 31 Jul 2023

14. “Walmart Has the Scale and Infrastructure to Generate Positive Gains”. Yahoo Finance, . Accessed 31 Jul 2023

15. “Demand-Side Economies of Scope in Big Tech Business Modelling and Strategy”. MDPI, . Accessed 31 Jul 2023

16. “The Business Model Canvas”. Strategyzer, . Accessed 31 Jul 2023

17. “HomePage”. Nespresso, . Accessed 01 Aug 2023

18. “Business Model Canvas of Nespresso”. Alex Osterwalder, . Accessed 01 Aug 2023

19. “Nespresso Capsule”. Electromall, . Accessed 01 Aug 2023

20. “The Best Nespresso Machine (But It’s Not for Everyone)”. Newyork Times, . Accessed 01 Aug 2023

21. “Business Model Canvas”. Think Design, . Accessed 01 Aug 2023

22. “6 Problems with the Business Model Canvas”. The Pourquoi Pas, . Accessed 01 Aug 2023

  • The Johari Window Model
  • McKinsey 7S Model
  • Elaboration Likelihood Model of Persuasion

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The Business Model Canvas: A Quick How-To Guide

business model canvas sequence

Every company is a story. Anyone looking to invest in a company will need to know this story. The Business Model Canvas is one popular format for presenting your company’s story. Let’s take a look.

A canvas for your business model

Your company story isn’t a marketing ploy: it does not need to be new, innovative, or made-up. In fact, you already have your company story—it’s your business model. The business model canvas is one framework for sharing your story, or business model, with potential investors.

This strategic management framework was first developed by Alexander Osterwalder in the mid-2000s. While the original canvas is applicable to any business, regardless of size, history, or budget, additional canvases have popped up in various niches.

The simplicity of the business model canvas is what makes it so successful. The canvas is plain, looking much like a billboard or whiteboard. It’s comprised of nine criteria that express the important character traits for your business’ story, ranging from who you know to how you make money to what you have. The canvas acts as an advertisement to attract business investors or other founders.

Business model canvas

There are several benefits of using this framework:

  • Simplicity. This single, straightforward sheet means there’s no filler. Your canvas highlights the basics of your business, so you should already know the answers to most of these. The compiling of information might be overwhelming, but the business model canvas ensures a simple process.
  • Customer focused. Your canvas shows how you think about and interact with your customer, and it can help expose any weaknesses.
  • For any company. Whether you’re a one-person start up or part of a multi-national company, the business model canvas works.

Know your audience: 3 tips

Before we explore the nine criterion of your canvas, it’s important to consider your audience when creating a canvas. Your audience is potential investors, and these three tips will help strengthen your business model canvas.

Three Assumptions

When creating a canvas, you should assume these things about your audience:

  • They are smarter than you. Be clear, be concise. There is no reason for great exposition. This is a place to create a bullet point list for the reasons why you’ll succeed. Let the audience see the data and piece it together.
  • They see through your mask. There is a little room for embellishment—after all, you want to stand out. But too much embellishing can kill a project because your audience can see it. There is a fine line between confidence and foolishness, and if you can’t tell the difference, stick to talking straight.
  • They hope you are The One. Your audience wants, more than anything, for you to succeed. They want to find a good match. They do not take the time to listen and read these just because they enjoy critiquing everything that passes over their desk. They enjoy the thrill of finding The One.

9 criteria of the business model canvas

The nine criteria are subsets of four major categories in the business model canvas:


Each major category is comprised of one or a few criterion.

This section is all about the things you need— people, processes, technology, and partners —to run your business.

  • Key activities. What does your business do? Are you managing large software teams? Do you have to manage a large supply chain? These are activities essential to the business. If your business is a salon, for examples, your key activities might be hiring and training staff, cutting and styling hair, opening and closing the shop, sending emails and offers, and making thank you cards to improve customer relations.
  • Key resources. These are the things you need to perform your key activities, in order to create value . The key resources of a salon are staff, a physical location, marketing, and customers. Which resources do you have that are unique to you and give you an advantage? It might be an excellent 3-year contract on a prime downtown property because its owner had to sell quickly. It could be that you get discounted hair products from the manufacturer because you worked there for 15 years or negotiated a deal.
  • Partner network. These are people in your network who can help you. People reading your business model canvas like to see that you are not a lone wolf, starting from scratch. They want to see you have support. They want to see that they are not the only ones who are signing up to help your business succeed. The partner network is the place to brag about who you know. These can be team members, suppliers, marketing avenues, etc. Anyone who is on board to contribute to the business.

This section explores the value you offer.

  • Value proposition. Your value proposition is the most important component of any business. Why are you valuable? If the business provides no value, then, why? Why should anyone buy into it? Why should anyone support it? Why does anyone need it? This value needs to be directed at who your business serves in the marketplace. The proposition is not why you are valuable to the readers and the investors. The value needs to be directed at who your business targets. Google helps people find things they wish to know. Apple makes elegant, simple products designed to work out of the box. Your salon cuts and styles people’s hair.

This section is all about your customers: whether, where, and how you talk to them and they buy from you.

  • Customer segments. These are the people to purchase your product. It is helpful to think of your first customer. In the end, you may want everyone to be a customer, but, right now, who will be the first person to buy your product? Customer segmentation can be categorized by demographic, geography, social class, financial class, personalities, etc.
  • Channels. How do you meet your customers? Do you go to them? Do they come to you? Channels could be for a media platform. It could be a writing contest for a Hack-A-Thon. It could be the business location for a coffee shop. It could be a website for a microservice. It could be engineers’ Twitter accounts for any software company. The channel is a pathway of communication that links a community to the business.
  • Customer relationships. What kind of relationship do you want to have with your customer? What is the relationship’s nature? Transactional, personal, automated, self-service, community oriented. A vending machine is self-service. Major cloud providers are mostly self-service. They lack in support so much that other companies can be built entirely around providing customer service for their platform. Other cloud providers are popping up, too, whose business’ value proposition is that they have phone-call customer service—a unique value for certain categories of customers.

The finances section really wants to know your income statement. What are your costs and how do you bring in money?

  • Cost structure. What are your company’s costs? Income statements do a good job of putting expenses into operating expenses and capital expenses , and that can serve as a good model for this part of the canvas. Operating expenses are the day-to-day costs of doing business. At the salon, it would be largely labor costs for hiring stylists to cut hair. Capital expenditures would be costs associated with stocking shelves with hair products, rent costs, and electricity costs.
  • Revenue streams. Finally, how does your company make money? The salon makes money by cutting and styling hair. They maintain a register to sell hair products. Maybe they create distinctions in their stylist offerings and do normal cuts, styled cuts, perms, colorings, and events like weddings or model shoots.

Spend some time on the canvas: make it flow, edit each section, and present your company with a complete story.

Additional resources

For more on strategic business planning and aligning technology to your business, browse our BMC Business of IT Blog or check out these articles:

  • What Is “IT-Business Alignment”?
  • Introduction to Business Process Management (BPM)
  • Why Business Value is Key to IT Success
  • What is Technology Business Management? TBM Explained

How to evolve IT to drive digital business success

When IT and the business are on the same page, digital transformation flows more easily. In this e-book, you’ll learn how IT can meet business needs more effectively while maintaining priorities for cost and security.

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These postings are my own and do not necessarily represent BMC's position, strategies, or opinion.

See an error or have a suggestion? Please let us know by emailing [email protected] .

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BMC works with 86% of the Forbes Global 50 and customers and partners around the world to create their future. With our history of innovation, industry-leading automation, operations, and service management solutions, combined with unmatched flexibility, we help organizations free up time and space to become an Autonomous Digital Enterprise that conquers the opportunities ahead. Learn more about BMC ›

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A quick and dirty guide to the Business Model Canvas

Reading time: about 8 min

  • Product development

Of course, evaluating your business model can be daunting. With so many moving parts to sort through, it can be hard to know where to start. 

That’s where the Business Model Canvas template comes in. 

Using 9 key building blocks, the Business Model Canvas helps leaders conduct high-level analysis of their operations and map their business model in a simple, easy-to-understand visual document. 

Use this Business Model Canvas guide to learn how it works and how to use a Business Model Canvas template to kickstart your planning process. 

business model canvas

What is a Business Model Canvas?

A Business Model Canvas is an easy-to-digest one-page document that succinctly summarizes how your business should work based on the best information you currently have.

Created in the mid-2000s by business theorist and Strategyzer founder Alexander Osterwalder, it’s a strategic management and lean startup tool that condenses your strategic planning onto a single page. It’s used by successful innovators around the world like Intel, Panasonic, 3M, and Mastercard.

It’s like a mini business plan, but it’s much faster to put together. A business plan, on the other hand, is a detailed projection of what your company hopes to achieve and how it hopes to achieve it. 

A comprehensive business plan is typically between 30 and 50 pages long. In contrast, the one-page Business Model Canvas template makes it easy for an organization to describe its model.

Organizational factors

Need an even simpler, quicker way to visualize your business strategy? Try the Lean Canvas Model.

Benefits of using a Business Model Canvas

There are risks to plunging ahead without making a plan since, according to the U.S. Bureau of Labor Statistics, 50% of businesses fail within their first five years. 

Whether or not you make a profit depends on how well you design and implement all the activities and resources that make up your business. You can use the Business Model Canvas to avoid getting overwhelmed by these pressures and get going on your new business.

  • Plan your strategy: The Business Model Canvas helps you plan and evaluate your assumptions quickly and efficiently so you can spend more time growing your business.
  • Be flexible: It makes it much easier to change things on the fly since you write down just the essentials.
  • Find gaps: It gives you a bird’s-eye view of your business so you can quickly see where you need to focus your energies.
  • Drive innovation: It encourages understanding, discussion, creativity, and analysis within your team.
  • Share your vision: It helps you create a complete pitch for potential investors or partners.

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Develop a plan for achieving your organizational goals through the strategic planning process.

Key elements of the Business Model Canvas

The Business Model Canvas consists of nine areas of strategic planning. If you’re starting a new business from scratch, don’t worry too much about the details––just get your vision down so you can get moving. Include the following elements of the Business Model Canvas: 

Value proposition

Your value proposition should be easily communicated in a single sentence, and it should inform everything you do. What’s your mission? What problem are you going to solve, and how are you going to solve it? What products and services will you offer to meet customers’ needs (these may vary by customer)? 

Most importantly, you want to define how your brand will be different from what’s already out there.

Customer relationships

Think about the kinds of relationships you want to establish with your customer segments. How will you communicate and build rapport with your customers throughout their journey? Will you offer personal assistance, create a community environment, or present a self-serve model? Consider how and where your customers like to communicate. Every communication should drive home the problem you solve and why your solution is the best (or, better yet, only) one around. 

Customer and market segments

These are the people and organizations for whom you create value. Who could really use the solution you’re offering? If there are multiple groups, list them all out.

You may need to investigate potential buyer personas, find niche markets that fit your offerings, or come up with a multi-sided market strategy that brings together different groups of customers.

Channels are the points at which you interact with customers to deliver value. How are the people who need your solution going to buy it? Take a look at your customer segments. Where do they spend money right now? Try to make it as easy as possible for a customer to say “yes” to buying your solution.

Key partners

You’ll probably rely on other people––suppliers, distributors, etc.––to create and deliver value to your customers. What individuals or entities outside of your business will you need to work with in order to produce, market, and deliver your solution? What key activities or resources can someone else take care of so that your business can focus on your value proposition?

Key activities

If an activity isn’t directly tied to delivering on your value proposition, then it isn’t key, and you probably shouldn’t be doing it. So what do you absolutely have to do in order to produce, market, and deliver your value proposition? 

Key resources

If the resource isn’t necessary to deliver on your value proposition, ask yourself if you really need it. What do you absolutely need to have in order to produce, market, and deliver your solution? These could be human, financial, physical, or intellectual resources.

Cost structure

This should be a description of the costs of operating your business. How much will your key activities, resources, and partners cost you? At this point, it may be a good idea to take a second (and a third) look at each of these categories and cut out everything that isn’t absolutely essential to delivering on your value proposition.

Pay attention as well to any fixed costs you’ll have to incur, variable costs you’ll need to keep an eye on, and changes in costs as you scale.

Revenue streams and pricing model

Decide what customers will pay for and how they will pay you. How much do you need to charge? Keep in mind that you need to make enough to cover your costs and have something left over to grow your business and reward you for your efforts.

Additionally, will your solution be subscription-based? Will you offer individual purchases? Choose a pricing model that will fit best with your customer base and your cost structure.

How to use a Business Model Canvas

The main goal of using the Business Model Canvas is to validate your business model. By laying out all the components, you can find simple, small-scale ways to test each aspect of your business model in a cycle of improvement.

1. Fill out the canvas

Filling out the canvas is quick and painless, and it should give you a lot of clarity. Try to finish it in just 30 minutes. Start with the value proposition and then proceed in the order outlined above, moving from the theoretical to the more concrete aspects of your strategy.

To demonstrate what a filled-out canvas might look like, imagine that a seventh-grader named Timmy wants to start a neighborhood lawn mowing business over the summer. His Business Model Canvas might look something like this:

business model canvas example

2. Identity and test your assumptions

It’s smart to have a plan. It’s even smarter to make sure that it actually works. Maybe you think that offering a subscription plan is the best pricing model, but once you run an A/B test, you realize that your customers prefer paying each time for your services. 

Find the key metrics that you can track to better understand your customers and your success in reaching them. If you aren’t doing well, these metrics will also help you understand why.

3. Adapt your strategy

Once you test your assumptions, make the necessary tweaks to your business strategy. You could even fill out a new Business Model Canvas to keep track of your changes and have a visual reminder of what you’re aiming for.

For example, you can make multiple copies of your canvas document in Lucidchart to explore potential future iterations of our business model, highlight areas where costs can be reduced, and map out relationships between key partners and their various functions.

4.  Repeat the cycle

The best way to grow your business is to continually reexamine your vision and performance. In effect, your Business Model Canvas should be a living document that represents your best hypothesis in an evolving landscape. Markets, customers, and trends change, and you need to be able to change with them. 

Whether you write your Business Model Canvas in the kitchen or the boardroom, you’re ready now to come up with a clear and effective business model. You can get started on your Business Model Canvas quickly in Lucidchart. 

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Looking for more ideas? Explore another way to define your business with a strategy mapping template.

Lucidchart, a cloud-based intelligent diagramming application, is a core component of Lucid Software's Visual Collaboration Suite. This intuitive, cloud-based solution empowers teams to collaborate in real-time to build flowcharts, mockups, UML diagrams, customer journey maps, and more. Lucidchart propels teams forward to build the future faster. 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

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The Business Model Canvas

Understanding what makes your company successful.

By the Mind Tools Content Team

business model canvas sequence

Do you know what your company's business model is? How well do you understand it? And why does this matter?

A company's business model determines how it generates its revenue, operates successfully, and makes a profit. If your company's business model is out of date or wrong for its market, then it's likely to fail.

Understanding your company's business model is an important part of developing the "commercial awareness" you need to solve problems effectively, make good decisions, and become known as a trusted leader in your organization.

This article explores a useful model that you can use to think about your business model.

What Is the Business Canvas Model?

Alex Osterwald and Yves Pigneur developed their Business Model Canvas in 2010.

They collaborated with 470 members of the Business Model Innovation Hub – an online forum for business professionals and researchers – who contributed case studies, examples, and critical comments to their research. As such, the Business Model Canvas represents the collective experience of a community of business people.

It appears as a template of nine basic building blocks, as shown in figure 1, below. These form a blueprint, based on which business models can be systematically designed, explained and challenged.

Figure 1: The Business Model Canvas

business model canvas sequence

The Business Model Canvas is the property of / , and it is distributed under a Creative Commons copyright license .

How to Use the Business Model Canvas

To use the Business Model Canvas, think about each building block using the questions below. You may want to download our worksheet to help with this.

CS: Customer Segments

Your customer segments are your target markets – the specific groups of people or organizations that your business serves.

Instead of trying to satisfy everyone, all of the time, group your customers according to common attributes like their location, needs, or behaviors, and decide which segments to focus on. This way, you can deliver a product or service that is closely tailored to the specific needs of particular groups.

See our article on market segmentation for more on this.

Record your results in the CS block of the canvas.

VP: Value Propositions

The value propositions block defines how you'll deliver value to your customers. You can create value in many ways, including offering a low price, a high standard of design, good accessibility, convenience, and high performance. Consider these questions:

  • How do you create value for your target market?
  • What problem or need does your product or service solve for the customer?
  • How does your product or service differ from your competitors' offerings?

If you are struggling to crystallize your value proposition, conduct a USP Analysis and Core Competency Analysis to assess how your product or service stands out from those of your competitors.

Write your value proposition in the VP block of the Business Model Canvas.

R$: Revenue Streams

In this block, you analyze how each customer segment pays for your product or service.

There are many different ways to pay for a product or service. For example, is the price fixed, or will you charge customers for each use, by subscription, or with ongoing payments? Will any negotiation or bargaining be involved? And who, ultimately, is the customer? (Your customer may be an advertiser, for example, rather than the user of the service.)

Consider these additional questions:

  • What do your customers currently pay for similar products or services?
  • How do they pay for this?
  • What do you charge for your product or service?
  • Do customers get any free services or perks that your competitors don't offer?

Record this in the R$ block of the Business Model Canvas.

CH: Channels

The word "channel" refers to the way you deliver your value proposition to each customer segment. Channels include a direct sales force, web sales, own brand stores, partner stores, and wholesalers. Consider these questions:

  • How do you make your customers aware of your products and services?
  • What channels do your customers prefer to use?
  • How will you help customers evaluate your value proposition?
  • How do customers want to buy your products and services?
  • How do you provide customer support?

Record your answers in the CH block of the Business Model Canvas.

CR: Customer Relationships

This block defines the type of relationship you want to foster with each of your customer segments. There are several categories to consider here.

  • Dedicated personal assistance – This is where the wants and needs of each customer are handled by a dedicated customer service representative. For example, many types of business dedicate an account manager to highly valued clients.
  • Personal assistance – Here, customers can communicate with a customer service professional during and after the sales process. This can happen in person at the point of sale, or through a call center, email, or IM.
  • Self-service – Customers can purchase products without assistance.
  • Automated Service – An automated service recognizes individual customers through a login or other identifier. This provides a customized service that "remembers" the customer's preferences and presents options accordingly.
  • Communities – Here, the organization builds communities using social networking and blogs to encourage customers to communicate with one another, share ideas, and solve problems.
  • Co-creation – In these relationships, organizations go beyond the traditional customer-vendor relationship by encouraging customers to take a more active role in shaping what the product or service might be. For example, some companies encourage their customers to review their products, or create content that can be shared with others.

To think about how your business develops relationships with customers, you can use the Buy-Sell Hierarchy , Focus Groups , and Customer Experience Mapping to understand what your customers want from their experience, and then use this information to build the customer relationships you need.

Record your findings in the CR block of the Business Model Canvas.

KR: Key Resources

Your key resources are the things you most need to make your business model work, and different types of business need different types of resource.

Key resources may be owned by your company, leased, or used through some other arrangement with key partners.

Consider these questions:

  • What human resources will you need?
  • What financial resources will you need?
  • What physical resources will you need?
  • What intellectual property resources will you need?

Conduct a VRIO analysis to explore how you can make best use of the resources you have available.

Make a record of these key resources in the KR block of the Business Model Canvas.

KA: Key Activities

Your key activities are the most important business processes that your organization must use to operate successfully. Examples of these include designing, manufacturing, and delivering a product; providing new solutions to customers; or providing a platform on which customers are able to complete transactions.

List your key activities in the KA block of the Business Model Canvas.

KP: Key Partnerships

This is the network of partners, stakeholders and suppliers that you rely upon to make your business model work. Consider these questions:

  • What strategic alliances do you have in place to bring your product or service to market?
  • What partnerships are needed to access key resources such as areas of expertise, raw materials, or access to customers?
  • What partnerships allow you to access economies of scale?
  • Who have you joined forces with to minimize risk and uncertainty?
  • Who are the key stakeholders for your product or service? How can you create strategic partnerships with these people?

Conduct a Stakeholder Analysis to identify who has the most power and influence. And, as you evaluate potential partners, use our 10 Cs of Supplier Evaluation checklist to evaluate them carefully.

Write your key partnerships – both potential and present – in the KP block of the Business Model Canvas.

C$: Cost Structure

The last block you need to analyze is your cost structure. This looks at all of the operating costs that your business incurs as part of its business model. These costs should be easy to identify, now that you've defined your key resources, activities, and partnerships.

Record your findings in the C$ block of the Business Model Canvas.

Applying What You Have Learned

By working through the Business Model Canvas for your own company, you'll get a good insight into the things that really matter for your business.

You can use this understanding to make informed decisions about business areas that you are responsible for by checking, in particular, that your decision won't undermine the wider business in any way. You can also quickly identify business areas that will be improved by your decision, and this will help you "sell" your recommendations.

It also gives you a head start when you're scanning the business news or industry press for changes that will positively or negatively affect your business. You'll know the core things that your business depends on, and you can watch out for changes that affect these.

Another advantage of the Business Model Canvas is that it clarifies how your own part of the company affects, and is affected by, other departments. This helps all parts of the business co-operate with one another more efficiently.

The Business Model Canvas was developed by Alex Osterwald and Yves Pigneur, in collaboration with a community of business professionals at the Business Model Innovation Hub. It is a useful tool for designing and analyzing business models in an objective, structured way.

The Business Model Canvas incorporates nine building blocks:

Block 1: Customer segments.

Block 2: Value propositions.

Block 3: Channels.

Block 4: Customer relationships.

Block 5: Revenue streams.

Block 6: Key resources.

Block 7: Key activities.

Block 8: Key partnerships.

Block 9: Cost structure.

You can use the Business Model Canvas to develop a new business model, or refresh an outdated one; analyze the viability of a new business idea; and even to analyze your competitors' business models to discover opportunities for making your own business stand out.

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business model canvas sequence

The Business Model Canvas

The Business Model Canvas is a strategic management and entrepreneurial tool. It allows you to describe, design, challenge, invent, and pivot your business model. This method from the bestselling management book Business Model Generation is applied in leading organizations and start-ups worldwide.

business model canvas sequence

The Business Model Canvas enables you to:

  • Visualize and communicate a simple story of your existing business model.
  • Use the canvas to design new business models, whether you are a start-up or an existing businessManage a portfolio of business models
  • You can use the canvas to easily juggle between "Explore" and "Exploit" business models.

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The Business Model Canvas

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How to use the business model canvas correctly

There are a lot of articles out there explaining what the business model canvas is and what each section means, but they all seem to make the critical mistake of ignoring the stage the canvas is approached at. This means you spend, probably waste in fact, precious time thinking about components of your business that won't actually come into the picture for months maybe .

So how do you use the business model canvas correctly?

Quick intro to the Business Model Canvas

First off, let's take a step back and agree on what the Business Model Canvas (BMC from now on) looks like and what you'd be normally expected to do.

The BMC is the result of a joint effort led by Alexander Osterwalder to create a simple one pager to replace long business plans that often weren't more solid than a castle of cards.

The canvas looks like this:

If you've never filled one out it's probably a good idea to take two minutes to watch this introduction video:

The model itself has some useful annotations in each section that can help you to fill the blanks. If you want to learn more about it you can also consult some of the other free videos and books listed on the resources page .

The 4 most common mistakes

So what's wrong with just filling out the canvas?

If you watched the animated series linked on the resources page you should already have figured out a few:

  • you fill it once and you're done
  • you fill it all at once
  • you don't take everything you wrote as an hypothesis
  • you are generic in what you write down

1. You fill it once and you're done

The BMC, like any other canvas in Lean Startup land, is supposed to be a live document . This means that you fill it out based on what you know today with the understanding that you will be revising it as you learn more from testing your hypothesis .

Unfortunately doing away with a business plan often doesn't mean doing away with the habits of a business plan and so you end up with a one pager up on the wall that you will use as something to execute on rather than as guidance to figure out your next test.

2. You fill it all at once

Often times new founders will download the template, print it out and then proceed to spend an entire afternoon, if not an entire day, debating how to fill every single block. But it often doesn't end up there and after a night of sleep the cycle will repeat. I've done this and it's a complete waste of time.

Consider the stage you're at: are you just starting out? are you filling in the canvas for an existing product? As you can imagine those two scenarios are wildly different and that should reflect on how you use the canvas.

3. You don't take everything you wrote as an hypothesis

Building on #1 you should use the canvas as a living document to figure out how to de-risk your business which means coming up with hypothesis and running tests. For example, if in the revenue stream you wrote $10/m subscription , is that how you're going to price your product? how did you come up with that price to begin with?

Pricing is often a matter of understanding the value to the customer, competitors price points and other variables before you can make an hypothesis worth testing. This doesn't have to take a lengthy market research, but it's not something that makes sense to do on day one with no clear idea about your customers and how they look at the problem you're trying to solve.

4. You are very generic in what you write down

This is the everbad and one of the biggest causes of failure (and startups only fail when they fail to learn ).

Being generic in your value proposition will make it impossible to explain what you do to your customers who will smell a confused founder miles away.

A generic customer will get in the way of customer development (check out this how-to on how to create a persona archetype ) and make it hard to get any value from your qualitative tests since you won't have a clear baseline to analyze the data against .

If you're not specific in your channels outreach will likely be more expensive than it should, wasting money and time with lower conversion rates than if you had a better picture of who your customer is, what language they speak and what their habits are.

The same thing applies to the rest of the blocks, bottom line, specificity will save you a lot of energies.

We forgot about market size and competition

This isn't as much of a mistake as it is a shortcoming of the BMC itself, but it's so important that I wanted to mention it: if you're anywhere around solution validation, and are hopefully approaching product market fit, you should have a good idea about your competitors and market size. There is no good way to represent this in the BMC and I've often documented this in a competitive mind map (a post about this is coming up soon).

How to use the BMC correctly

As I mentioned in the opening of this post how to use the canvas correctly depends on the stage you're at so let's look at some of the common scenarios (remember my focus in on early stages startup so I won't be talking about established business stages):

  • Just starting out
  • Problem is validated and solution is being tested
  • Approaching Product/Market fit

1. Just starting out

If this is your first week, or even month, your entire focus should be on problem testing.

You may have been sitting on this idea for a while and poked around, but if you can't comfortably say that the problem you're trying to solve has been validated with early adopters then that's your focus.

If that's your focus then there are only 2 parts of the canvas that should concern you:

  • the value proposition
  • the customer segment

You might be tempted to look at channels as well and even relationships, but if you actually focus on the problem and develop a good customer persona ) the channels will almost fill themselves and relationships will be mostly 1-on-1 interviews.

With that in mind I'm going to contradict myself and say that if this is your very first time filling a canvas for this product then go ahead and fill it all out, but then put it in a drawer and never look at it again for at least a couple months. The point of this is to capture that initial idea of how you thought everything was going to work and use it as a way to emphasize learning and at times reminding you of the long term vision so that you don't get stuck in a local maxima .

2. The problem is validated and the solution is being tested

Congratulations, you found a problem worth solving and are on your way to figure out how to solve it in such a way that people will pay for it.

By now your value proposition, customers, channels and relationships should be relatively solid.

The prime way to test a solution is to get people to pay for it so it's time for you to focus on what you need to do to actually deliver an MVP (which, contrary to what most people say, in my opinion must deliver some value to the client).

This translates to key resources and key activities. It's tempting to think about key partners as well, but I suggest you let that be driven by key resources and activities based on the core things that you should be doing in house.

The other temptation here is to look at costs, but at this stage you're not optimizing for profit so you can still leave that out. On the other hand you do need to think through revenue streams and pick a reasonable price to run your MVP tests. This should be relatively easy now that you have a clear understanding of who your customer is, how painful that problem is, how much that task is worth to them and who are the competitors and what they charge . However don't stress it, again, it's not yet time to optimize for revenue.

3. It's Product/Market fit time

Hats off to you for getting this far, it's not an easy feat.

From now on your goals is to scale the business so things like costs, pricing, sales and marketing, and customer relationships become really important.

Your canvas should be complete already and you need to start revising some key points starting with customer satisfaction and relationships since to get new customers is harder and more expensive than anything else.

At the same time you do want to grow so marketing and sales are probably becoming a key activity that you didn't have there before. Depending on your product and finances this may be a place to establish new partnerships.

Likewise costs and pricing need to be tuned so that you have decent margins (Cost of Customer Acquisition - CAC - & Life Time Value - LTV - really start to matter here). You might want to draw some new canvases playing with different partnerships and revenue streams trying to optimize that.

True at all stages

Going off of the common mistakes we discussed before there's obviously a few things you must do no matter what stage you're at:

  • being specific
  • taking everything as an hypothesis to tes t: remember you're just laying the assumptions to built that hypothesis
  • creating multiple canvases to choose amongst: don't fixate on just one option, go wide then deep (see this how-to for brainstorming and picking best ideas )
  • be quick on your feet : fill those blanks quickly (<1hr) and don't bike shed. Remember you are putting hypothesis together that you will test, don't try to think them through in your head
  • if you ran a test hopefully you've learned something so go back and update your canvas based on it
  • regularly consult your BMC (especially if you are a techy): the temptation of going off to build stuff is always so strong that going back to the BMC weekly can provide a great grounding checkpoint.

Need help filling out your BMC or want feedback?

No matter how much documentation one reads it's often still hard to translate theory to practice so if you want help filling out your BMC or would like a review of the one your already did just book a free call below.

It's as easy as picking a time that works for your and it doesn't cost you anything.

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Home Blog Business What is a Business Model Canvas? Quick Guide + Examples

What is a Business Model Canvas? Quick Guide + Examples

What is a Business Model Canvas

Based on the work of Alexander Osterwalder, a Business Model Canvas , or BMC for short, is a diagram used to visualize a business model; it allows structured organization and a quick method of evaluation and reflection on the effectiveness of a Business Model. The use and study of Business Model Canvas Examples allows us to understand it in a complete way and apply it to different types of organizations.

The Role of the Business Model Canvas

What are the benefits of using a business model canvas, 1. customer segments, 2. value propositions, 3. customer relationships, 4. channels, 5. revenue streams, 6. key activities, 7. key resources, 8. key partnerships, 9. cost structure, the power of a bmc in entrepreneurship: visualize the business model, mcdonald’s.

  • How to Utilize a Business Model Canvas for your Success

Business Model Canvas PowerPoint Templates

Whether it be in small business entrepreneurship or large corporate product launches, the business model sits at the center. The one thing that stands at the very heart of the daily operations of an organization, is a model that dictates where the opportunity lies and how the company effectively acts on it at each step in the process.

The very best professionals will have all of this knowledge and action driving their decisions. However, the original business model one may follow may not always be applicable to the obstacles that an organization faces, thus it’s incredibly useful to fully display organizational structure and operations.

The Business Model Canvas is a powerful tool for businesses of all sizes and industries. Here are some key benefits of using this visual framework:

Simplifies Complexity: Business models can be intricate, with various elements and interactions. The BMC simplifies this complexity by breaking down the model into nine essential building blocks. This visual representation makes it easier for entrepreneurs, team members, and stakeholders to grasp the core components of the business without getting lost in a lengthy business plan. It’s a powerful tool for distilling complex ideas into a clear, concise format.

Enhances Focus: When creating a BMC, you’re prompted to think critically about each building block, such as customer segments, value propositions, and revenue streams. This process encourages a deep understanding of how these components interact and depend on each other. By explicitly defining these elements, you gain a sharper focus on your business strategy and objectives. It helps you identify gaps, redundancies, or areas where your model can be refined.

Promotes Collaboration: The BMC is designed to be a collaborative tool. It’s not something a single person creates in isolation; instead, it encourages cross-functional teams to work together. Each team member can contribute their expertise to fill in the relevant sections. This collaborative approach ensures that everyone involved in the project shares a common understanding of the business model, which is essential for successful execution.

Iterative and Adaptable: Business environments are dynamic, and your business model should be too. The BMC supports an iterative approach, allowing you to make changes and updates as needed. For instance, if market conditions change, you can easily adjust your value propositions or customer segments. It’s a flexible tool that accommodates experimentation and learning. You can use it to test different assumptions and hypotheses about your business and refine your model accordingly.

Cost-Effective: Creating a traditional business plan can be a time-consuming and expensive process. In contrast, developing a BMC is a cost-effective alternative. It doesn’t require extensive resources or financial investments. This makes it particularly valuable for startups and small businesses with limited budgets. It’s a pragmatic way to initiate strategic planning, especially in the early stages of a venture when resources are scarce.

The Basics of the Business Model Canvas

Whether one is creating an all-new business model, comparing a pre-existing model, or adjusting a model to improve value, the BMC excels in keeping anyone invested in the business on track without wasting time and focus. By displaying only, the most critical pieces in business operations or a product, this tool is both a time saver and a method to sharpen your awareness of expectations vs. reality.

Here is the Business Model Canvas explained: There are nine sections in a BMC, each containing a specified topic of information that composes the core of any business model.

PPT Template Business Model Canvas

This section contains the information related to the core target audience that you are selling to. Simple and traditional segmentation analysis must be done to identify the top segments of the model. Start simple with questions like Which are the demographics of the major customer groups being targeted? Why are they going to be interested in the product or service? In essence, how well does the model comprehend who is being sold to? It is crucial that you identify clearly the segments as when facing reality, you will need to focus only in a few (1 or 2) to really test your model without a full operation in place.

Create a list of the unique business value propositions you will offer. Why is the idea or company valuable? What makes it stand above competitors? If there aren’t any direct competitors, what gaps are being filled in given markets?

This section could be extremely lengthy, depending on the business model, but should only contain the most central concepts at the heart of the model that attract customers or generate revenues. This section will contain the aspects of the business that relieve a customer’s pains. If you’re struggling to identify what is most important, consider using a Value Proposition Canvas, another easy-to-visual tool that helps establish your target audience with your strengths. Focus on solving a real pain for the segments identified.

The information of this section should refer to how to connect segments and the value proposition. During the analysis, you should be asking questions like How are customers convinced that your product or organization has the advertised special qualities? What methods are used to interact with them? How does an audience engage with each strategy in the product lifecycle? Additionally, how is customer engagement tracked?

Once the customer is convinced of the goods or services, how would you deliver them? This should include every step of the process it takes to make the financial transaction and value delivery possible. Is there a separate supplier? Who distributes the product? How is it displayed? Think about what the model requires from start to finish in order to make a sale.

If the customer connects with the product or service, and they want to proceed with doing business, then how does the actual exchange of money happen? How is the cash flow tracked? Are there any middlemen between the sale and the income to the business?

Business Model Canvas Diagram for PowerPoint

Source: Editable Business Model Canvas PowerPoint Template

This section should include specific activities that the organization will do to create value. Unlike the Value Propositions, it’s not just about a new product or business practice, but rather the day-to-day operations that each team will take.

Similar to Key Activities but focusing on assets that are used. Is there a special supplier? Is there access to any materials or a local storefront that puts you in an advantageous position? Do you have a special intellectual property or patent that introduces new knowledge into the niche?

For areas that may be lacking, or areas that are too costly for the business to manage by itself, what can be outsourced to partners to focus on? Which areas would it be more cost-efficient to hire from supporting businesses? Specifically, identify model strengths, maximize time and money on them, and move identified weaknesses to connected partners that can address them better or solve them altogether.

Finally, what are the major expenses in the model? Are they a flat fee, or are they a variable cost? This may factor into previous sections, like key activities, resources, and partnerships.

Additionally, how does this relate to the Revenue Streams? How will the predicted costs vs. the actual be monitored? Most importantly, what will be done if costs outweigh the incoming funds?

Creating a Business Model Canvas involves analyzing each of these sections individually and as a whole, and connecting the dots between them.

Introducing a new business or product to the world is no small undertaking, especially when you consider how much competition and other new ideas are thrown into the world on a regular basis.

This also means keeping the model current and responsive. A business model, after all, is only a well-educated guess on how to generate success from a demand. If reality does not match up to the prediction, then even the very best business models are useless. A BMC is your abstract representation of how a business delivers value to customers to help them solve problems.

Steven Blank’s book to entrepreneurs and business leaders, ‘Four Steps to the Epiphany’ , demonstrates the difference between those who watch and listen to their model in action, and those who convince themselves that their business model is flawless, and the world will adjust to follow it instead. The fact is, you may have the most amazing ideas in the world, but it won’t matter if you aren’t paying attention to unforeseen challenges that arise between conception and actualization of a successful model.

The BMC is an excellent tool to get away from the guesswork, and out into the metaphorical streets. It allows an individual or team to compare expectations with reality, to double-check targets and see if those targets are still manageable, and it gives an opportunity to make adjustments to a business model before it’s too late.

This practice is called, ‘Get out of the building’, an important part of the Lean Startup Methodology . It means to develop a BMC and test it against reality. For this to work, you need to create an MVP ( Minimum Viable Product ) that materializes your Value proposition and tests it against real-life customers. Testing means that they should really purchase the MVP and that they complete the different sections of the BMC for true validation. This process is really iterative, and it helps entrepreneurs and business executives make the adjustments necessary to really market a value proposition, reducing the risk of mounting a full-scale operation.

Get Out Of The Building PowerPoint Template

Business Model Canvas Examples

By using examples of Business Model Canvas, we can evaluate business models and identify just what changes need to be made to the model in order to ensure growth and success. In addition, analyzing Business Model Canvas examples and being able to study success stories is beneficial to be able to apply it in different industries, helping you better understand Business Model Canvas explained with examples.

Let’s take a look at the BMC Example of the MoviePass company, which launched with the idea to sell a monthly service to the general public for daily movie tickets at major theater chains for a flat monthly membership fee. The company reasoned that they could benefit two groups, the average moviegoer would be able to see more movies, and movie theaters themselves would see better attendance. This innovative approach required the development of robust membership software to handle the logistics and subscriptions efficiently, making it one of the notable examples of a business model.

In theory, it sounds like a reasonable concept, but in reality, MoviePass had not developed a functional business model which resulted in a poor performance against new technologies. There was no constant evaluation to keep track of their cash flow, and by failing to keep the company growing fast enough, it couldn’t support the necessary costs. Perhaps if leadership had followed a BMC these issues may have been recognized earlier.

Business Model Canvas Example - MoviePass

By using the BMC, MoviePass could have visualized earlier that the business model was in need of a pivot, a change to a section of the model in order to address an issue. In MoviePass’s case, areas like cash flow and customer acquisition had some gaps that required a solution. Had the company been more aware of its business model, it might have seen a need for a Minimum Viable Product (MVP) where they could test the results of their ideas with a few early adopters.

An MVP is the bare bones of a product or service that can provide invaluable information about how a small group of customers reacts. By having a testing period of limited engagement, a business can limit costs while drastically improving knowledge on how to proceed. Had MoviePass used this, they might’ve been able to observe early on that some customers used their service to the max, purchasing a movie ticket per day, far outweighing the profit of their service from the cost of providing it.

The pivot would adjust to their business model, and a new MVP could be created to test the new approach. This new iteration of the business may have changed the original direction of the company. Through each pivot and each new iteration of the model, MoviePass BMC would adjust accordingly, allowing an easy method in which to keep track of the major changes without getting overwhelmed in all the details that lay underneath each educated decision.

There are, however, examples of well-crafted business models that can be observed on a BMC. Let’s take a company that has spread its business model all over the world and has undoubtedly enacted countless pivots and iterations of the business model in order to evolve, adapt, and thrive over the years: McDonald’s, as one of the prime business model examples.

When thinking about the massive scope of McDonald’s, it’s both interesting and telling of how the BMC can still capture the essence of their business model. McDonald’s is a global corporate cash cow requiring a rock-solid model, but that doesn’t mean it’s the same one since the conception of the company.

With the many decades in operation, you can be sure that a McDonald’s BMC would not look the same at the beginning as it does today. What originally started as a single burger joint on a street corner, now faces the challenges of global food service. Each time a new challenge or opportunity presented itself, the McDonald’s business model was forced to pivot by observing the environment, developing an appropriate plan of action, and monitoring the progress accordingly.

Over the years the world has grown to experience many iterations of the McDonald’s brand, whether it be an icon of American cuisine or an example of adaptation to dietary health. Flexible and ambitious, McDonald’s always made sure the business model matched the desired outcomes.

Business Model Canvas Example McDonalds

Uber is a ride-hailing service that has caused massive disruption for conventional taxi services. By using digital technology and a specific standard for cars and drivers offered to customers, many taxi services and individual taxi drivers have found it hard to compete with Uber. In contrast to developed countries, taxi drivers in developing countries have been unable to meet the minimum vehicle standards to qualify as Uber drivers, competing with them virtually out of the market. On the contrary, it has also attracted a new segment of people looking to use Uber as a part-time job to earn extra money.

By looking at Uber using the BMC Example we can see that its key partners include customers, drivers, payment processors, mapping data providers, and local authorities in the country it operates. Its key activities include developing its digital platform and algorithms, driver onboarding, marketing to balance demand and supply, and supporting customers using the service. The key resources of Uber are its digital platform, pricing, and routing algorithms. Uber relies on a peer-to-peer (P2P) circular economy. Where customers and drivers continue to contribute to the Uber revenue in almost a loop. And since Uber is easier to use compared to conventional taxi services, both customers and drivers tend to often use it as a routine. For example, many drivers have completely switched to Uber from conventional taxi services and new drivers entering the market cannot imagine providing services without the model Uber provides. Similarly, customers can get used to the service in a way that the Uber service itself becomes a part of their daily routine.

The value proposition of Uber is the provision of an on-demand taxi service for customers, whenever and wherever they need it. Uber fills the gap for the availability of an instant taxi service, without the need to necessarily ensure pre-booking or find a taxi manually. This offers user convenience, with various value benefits for both the customer and drivers, including the option to avail a cash-free taxi service by customers, earning opportunities for drivers and the supply of passengers and drivers through its ever-increasing base of users.

Uber reaches its customers and even attracts new drivers through its marketing and makes it easier for people to use its services through its app. Making it easy for the customers and drivers to communicate. Uber provides the utility of not just an on-demand service but also uses its algorithms to match supply and demand, find the shortest routes for customers, and to allocate the closest driver. However, since Uber is primarily connecting customers and drivers, it also shifts much of its costs to the former, since it does not require owning and maintaining a large fleet of cars. It can also adjust its revenue based on the market it’s operating in, and adjust prices to match not only demand and supply but the purchasing power and market rates of the country or area it operates in.

Business Model Canvas Example - Uber

When Amazon started in 1994, terms like e-commerce or online shopping were virtually unheard of. In fact, Amazon can be easily credited with being one of the first e-commerce platforms in the world. However, its customer-led approach, with the convenience Amazon offered soon turned it into a famous retailer, which now has various other services attached to its name including an online video streaming platform called Amazon Prime, a cloud storage service (Amazon Drive), Kindle tablets, Fire TV, etc. However, to keep things simple, let’s look at Amazon’s BMC Example in the context of its retail store.

Amazon provides users with a range of services from its network of sellers. These sellers are rated by customers according to their experience and sellers that fail to adhere to Amazon’s standards are removed from the platform. For example, during the start of the COVID-19 pandemic, many people began hoarding hand sanitizers and selling them at inflated prices online. Amazon was quick to act to remove such vendors.

The approach that Amazon has is based on not just connecting buyers and sellers but ‘continually raising the bar of the customer experience’. To ensure this, amazon often takes innovative steps that not only include improving its digital platform but also ensuring a steady supplier base. In 2019, Amazon announced $10,000 and three months worth of their gross salary to employees who quit their jobs and started a delivery service. Anticipating the need to expand its supplier base. Amazon has also been famous for offering competitive employee benefits and creating a corporate culture that encourages innovation and employee loyalty.

Through its colossal warehouses, customer-centric approach, and corporate culture that creates an atmosphere of employees to remain closely connected with the company, Amazon’s revenue stream simply does not rely on its customer experience, workforce, or supplier base but on how it’s able to create an environment where stakeholders, including customers and employees feel a sense of loyalty towards the company.

Business Model Canvas Example Amazon

Over the years, AirBnb has been among companies that have leveraged their platform to transform conventional modes of doing business. Using its rating-based digital platform, AirBnb enables people looking to rent accommodation and hosts to be able to connect and become a part of its revenue stream with a few simple taps or clicks.

The platform has not only helped people who have conventionally been renting out their property but also enabled individuals with extra space to consider becoming hosts to earn extra money by renting out space for a short period of time. Similarly, the customers benefit from avoiding hefty rates of hotels and expensive accommodation options.

Like Uber, AirBnb has also been a disruptive force in the market it has operated. It uses its digital infrastructure to connect travelers and hosts. While offering the value proposition of making money by utilizing underutilized space to hosts and offering low-cost accommodation for people looking to save money. This model has enabled the company to surpass large hotel chains and make a major impact in the industry for rent and accommodation. In 2020 AirBnb was valued at $75 billion, surpassing giants like Hyatt Hotels valued at $2.07 billion and Marriott Hotels International valued at $10.57 billion.

Business Model Canvas Example - AirBnb

From its launch in 1997 to 2006 in the United States, Netflix had a per-rental model per DVD. However, in 2007 it launched a subscription-based model that turned out to be more successful. Today, Netflix is available for streaming in over 190 countries, each with its own catalog of Movies and TV shows.

According to Netflix’s Business Model Canvas Example, its value proposition is the provision of on-demand entertainment regardless of where you are. Its subscription models provide access to one or more screens, with the utility to watch Netflix via mobile, tablet, laptop, gaming consoles, etc. Its packages include an economical package with an SD (480P) resolution limited to a single device to more exclusive packages offering Full HD (1080p) Ultra HD (4K) and HDR (2160p) resolutions.

Needless to say, the market segment of Netflix is quite close to universal. Outmaneuvering cable operators and conventional TV channels with exclusive on-demand content. While Netflix’s partners have included broadcasters and production companies, it has recently been focusing on original content. Through Netflix’s subscription-based model, there is very little need (if any) for customer interaction, unless a user is reporting a bug. The Netflix model focuses on self-service with an ‘all you can eat’ style subscription model, with algorithms constantly suggesting content to users to keep them engaged based on their viewing preferences.

Neflix Business Model Canvas Example

Ikea’s value proposition is to provide affordable furniture that is sturdy, aesthetic, and functional enough to cater to customer needs. In doing so Ikea claims to create a better everyday life for people who use its products. The Business Model Canvas Example of Ikea includes its vendors, suppliers, franchisees, and logistics partners making it possible to reach out to customers globally.

Unlike companies like Amazon, e-commerce is only part of Ikea’s operations, as it has a robust physical presence in more than 50 countries. Over the years Ikea has undergone continuous product development with new furniture designs and a range of products being released on a consistent basis. This has helped the company to cater to the needs of different customer segments including families, businesses, and people who need something that is easy to use, assemble, and disassemble.

Ikea Business Model Canvas Example

How to Utilize a Business Model Canvas for Your Success

Whether it be a brand-new business endeavor or a product launch at a long-standing company, it’s critical that the business model is kept at the core of every decision. A Free Business Model Canvas Template is a tool to easily keep the model insight and offers an easy method to open the dialogue when that model may need to pivot.

The whole purpose of the BMC is to allow for a simple presentation of information, reducing complications in understanding just what is required in each new iteration of a business model. At a glance, anyone invested in the outcome of the model should be able to understand the who, what, when, where, and why of the model, or bring it to everyone’s attention if they don’t.

Most importantly, the BMC is a tool to help drive success. If there are issues in your business model that need to be addressed, a BMC makes it easier to visualize where the gaps are, and how they may be filled. Keep in mind that pivoting is crucial to the success and survival of a business model and that change, growth, and adaptation are not an abandonment of what matters, but a natural progression to find the best outcomes to the ultimate goal. As Eric Ries, author of Startup Lessons Learned, puts it: ‘pivoting may lead [successful startups] far afield from their original vision, but if you look carefully, you’ll be able to detect common threads that link each iteration.’

Frequently Asked Questions

Business Model Canvas is like a blueprint for your business. It’s a visual tool that helps you plan, understand, and describe how your business works. It breaks down your business into key parts, like who your customers are, what you offer them, and how you make money.

A real-life example would be Airbnb. They use the Business Model Canvas to show how they connect hosts with travelers, offer unique accommodations, and earn money through commissions on bookings.

To determine your value proposition , you need to identify what makes your product or service special. Ask yourself: What problem does it solve for customers? What benefits do they get? Your value proposition should clearly communicate these advantages.

Building and maintaining customer relationships involves providing excellent customer service, staying engaged with customers through various channels (email, social media), seeking feedback, and addressing their needs promptly.

When establishing partnerships, consider what resources or expertise your business lacks and seek partners who can provide them. Think about how these partnerships will benefit both parties and align with your overall business goals.

The Business Model Canvas allows you to see all aspects of your business in one place, making it easier to identify weaknesses and opportunities. By analyzing each component, you can make informed decisions to optimize your model for better results.

Yes, the Business Model Canvas is versatile and can be used for various businesses, from startups to established companies, in different industries. It helps structure and clarify the business model for any venture.

The frequency of updates depends on your business and market dynamics. In rapidly changing industries, you might need more frequent updates, while others may do so annually or when major changes occur.

Use your Business Model Canvas as a visual aid during presentations. Walk stakeholders through each section, explaining how your business operates and creates value. Encourage questions and discussions to ensure clarity and alignment.

If you want to create professional-looking Business Model Presentations, take a look at the following Business Model Canvas templates , ready to edit and easy to use.

1. Free Business Model Canvas Template for PowerPoint

business model canvas sequence

Build a top-notch company presentation using Free Business Model Canvas Template for PowerPoint. The cool scheme is relaxing to the eyes. The clear layout can provide the audience with quick understanding of the entire report in just one slide.

Use This Template

2. Animated 3D Business Model Canvas Template for PowerPoint

business model canvas sequence

Created with a 3D Model, this professional PowerPoint Template is ideal for creating videos or animated versions of your Business Model Canvas. Very popular among educators and speakers of the entrepreneurship niche.

3. Business Model Canvas PowerPoint Templates

business model canvas sequence

This Business Model Canvas PowerPoint Template is created 100% with editable PowerPoint Shapes, allowing the user to customize the content and visual appearance of the presentation. Suitable for educational presentations where you need to navigate each section of the BMC, or for investors presentations where you need to deep dive on each section of your Business Model.

4. Business Model Canvas Template for PowerPoint

business model canvas sequence

Our most popular Business Model Canvas Template. Ideal for working in groups and iterating with different BMC’s. Its suitable for cooperation editing, and allows very simple compositions. Well suited for developing your MVP and crossing the assumptions that were negated by reality.

5. 3D Perspective Business Model Canvas PowerPoint Template

business model canvas sequence

This Business Model Canvas Design is inspired in the idea of empty boxes, that entrepreneurs need to fill with their ideas. The design is simple to edit and decorated with a colorful theme. Designed to impress every audience.

6. Lean Canvas PowerPoint Template

business model canvas sequence

This Lean Canvas template for PowerPoint and Google Slides is perfect for anyone who needs to pitch a business idea to investors, present their idea to stakeholders or company leadership. This template is 100% editable, allowing the user to customize the content and visual appearance.

7. Product Management Canvas PowerPoint Template

business model canvas sequence

The Product Management Canvas PowerPoint Template is a strategic planning and modeling presentation. This is a single-slide template showing various aspects of product planning and successful management. The purpose of this canvas is to consider all aspects of the product.

8. Editable Business Model Canvas PowerPoint Template

business model canvas sequence

Editable Business Model Canvas PowerPoint Template is a professional presentation representing the Business Model Canvas in “board” format. All the presentation design is completely editable and the user can move, or add, post-its like text boxes to work with the canvas.

9. Simple Business Model Canvas Template for PowerPoint

business model canvas sequence

If you are looking to create an aesthetic Business Model Canvas Template, the Simple Business Model Canvas Template for PowerPoint will allow you to give your presentation the style you need. You will be able to add sticky notes with information for each of the sections of your Business Model.

10. Business Model Canvas Template with Widget Design

business model canvas sequence

100% editable Business Model Canvas template for Google Slides and PowerPoint presentations, with a widget design and look and feel.

business model canvas sequence

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Acquisition, Business Model Canvas, Channels, Cost Structure, Customer Development, Customer Relationship, Customer Segments, Key Activities, Key Partners, Key Resources, Lean Startup, Management, Minimum Viable Product, MVP, Prototyping, Revenue Streams, Startup, Steve Blank, Strategy, Value Proposition Filed under Business

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2 Responses to “What is a Business Model Canvas? Quick Guide + Examples”

If your business is a non-for-profit , how can you adapt your MVP? You are not selling anything as such, so how do you test if your product (MVP) will be purchased?

Hi Elena If there is a “business model”, there is always a business. So, you are selling something. Even non-for-profit sell. They just sell at “cost” or “subsidized”, but there are customers which pay at the end. Otherwise, rather non-for-profit, it is philanthropy and there is no “business” around. Hope this helps. Regards GV.

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business model canvas sequence

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Columbia Business School

The Business Model Canvas - A Useful Tool

By: Damon Phillips, Sandra Navalli

This case lays out the steps for creating a Business Model Canvas (BMC)-a comprehensive and intuitive framework intended to facilitate description and discussion of a new venture idea. Focusing on…

  • Length: 18 page(s)
  • Publication Date: Nov 5, 2019
  • Discipline: Entrepreneurship
  • Product #: CU351-PDF-ENG

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This case lays out the steps for creating a Business Model Canvas (BMC)-a comprehensive and intuitive framework intended to facilitate description and discussion of a new venture idea. Focusing on both the efficiency and value generating aspects of a new business, the model directs the founding team members to consider key aspects of a core model, including the company's value proposition, customer relationships, revenue streams, cost structure, and competitive environment. A variation on the model for nonprofit organizations, a Social Impact BMC, is also presented, adding additional items such as impact metrics. The case includes several real world business examples and asks students to prepare a traditional BMC for the for-profit company (Nespresso) and a Social Impact BMC for the social impact example (ConBody) using the tools outlined in the case.

Learning Objectives

Students will answer the question: How should a business model be developed and communicated to best support the launch of a new venture?

Nov 5, 2019




Social advocacy organizations

Columbia Business School


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business model canvas sequence

Business Model Canvas

Business Model Canvas example

What is the Business Model Canvas?

The Business Model Canvas provides a structured and visual “one-pager” approach to understanding how a company, project, or product can create, deliver, and capture value. It’s essentially a snapshot that helps describe and assess new or existing business models.

Developed in 2010 by Yves Pigneur and Alexandre Osterwalder, authors of “Business Model Generation,” the Business Model Canvas was initially intended to be a tool for entrepreneurs and small business owners. Since then, it has been widely adopted by companies of all shapes and sizes around the world. There are many reasons for this:

  • It has many use cases. At the start of a project or product development cycle, for example, it can help teams identify a clear path towards success. On the other hand, once a project or product has launched, it can be used to assess and refine the current business model based on evolving market trends or other constraints.
  • It is highly visual. Unlike a traditional and detailed business plan, the Business Model Canvas provides a snapshot of a business’s or product’s economic model that can be understood easily at a quick glance.
  • It connects the dots. Once completed, the Business Model Canvas helps teams both see the links between different aspects of a business or product and also highlight potential or problematic gaps. This is essential for being able to prioritize key areas of improvement to help a new or existing business model over time.
  • It is fun to create. The Business Model Canvas workshop is all about identifying a path toward innovation. It’s an exercise in creativity—without a definitive start and finish—and a great tool for constantly challenging yourself and finding new ideas.

How to complete the Business Model Canvas

Sometimes called a "business matrix," the Business Model Canvas is made up of nine key sections built around three key themes:

  • Desirability (Sections 1 to 4): How does the business create value?
  • Feasibility (Sections 5-7): How does the business deliver value?
  • Sustainability (Sections 8 and 9): How does the business capture value?

The business model canvas

As you work through the nine different sections, you should ask the following questions:

Section 1: Customer Segments

Who are your customers? What target demographics are you hoping to serve? Are they consumers (B2C) or other companies (B2B)?

Section 2: Value Proposition

How are you addressing customer problems? How can your business or product offer to address those problems? Why should your customers prefer your business or product over a competitor’s? What makes your business or product unique?

Section 3: Customer Relationships

What kind of relationship will you have with your customers? Are your customers autonomous? Do they require support? Are they a community? How will you communicate with your customers? What tone will you use? How do you plan to retain customers?

Section 4: Distribution Channels

What owned and operated channels will you use to reach your customers? What third-party channels will you use to promote your business or product? How will your customers find your business or product?

Section 5: Key Activities

What activities must be done in-house to create and deliver value? Which activities can be outsourced?

Section 6: Key Resources

What resources (human, financial, or material) are needed to deliver value? What resources are needed to manage the customer relationship? What resources are you currently lacking?

Section 7: Key Partners

Who are the partners you can not do business without? Who are your suppliers? Who are your advocates? Who are your other strategic partners?

Section 8: Revenue Streams

How does your business make money? Do you sell individual (one-off) products or services? Do you sell subscriptions? How much are customers willing to pay for your product or service?

Section 9: Cost Structure

A few things to keep in mind:.

  • The sections of the Business Model Canvas should be completed in sequential order. There’s a logic to it, as each section builds upon the next.
  • Don’t feel the need to start from scratch as you work through the Business Model Canvas. For example, if you’ve already established Personas in another exercise, use those to fill out Section 1. The idea here is to bring all of the pieces together on a single page, not to reinvent the wheel entirely.
  • If you haven’t yet established a clear value proposition for your business or product, use the Value Proposition Canvas—another tool created by Alexandre Osterwalder.
  • Each of the sections should not be “easy” to complete. Take the time to cover all of your bases and ask all necessary questions. And don’t be surprised if, in the beginning, you’ve identified multiple value propositions or too many customer segments. This is part of the process. The goal is to get all ideas on paper, discuss, refine, and then revisit over time as your business or product evolves.
  • As you fill out each of the sections, be sure to keep the content as short, sweet, and concise as possible. Remember, this doesn’t need to be as detailed as a traditional business plan; this is simply a snapshot of your business model. It should be easy to understand at a quick glance.
  • Keep in mind that all of the sections of the Business Model Canvas are linked to one another. If you modify the information in one section, you’ll likely need to modify details in other sections. Consistency here is the key to driving long-term profitability.

Suggested resources to learn more about the Business Model Canvas

  • An overview video of the Business Model Canvas by Strategyzer: Business Model Canvas Explained .
  • An article by business consultant Isaac Jeffries explaining how to fill in the sections of the Business Model Canvas: How to fill a Business Model Canvas .


What is the Right Fill Order for a Lean Canvas?

Ash Maurya

A question I get a lot is: Why isn’t the Lean Canvas laid out more logically? Anyone that has attempted to fill one can relate. You must jump around from box to box in seemingly random order.

The main reason for this particular layout was legacy. Lean Canvas was derived from the Business Model Canvas . And instead of changing the canvas layout, I chose to adopt a self-imposed design constraint: Every time I added a new box (like Problem), I’d remove an old box (like Key Partners).

To compensate for usability, I published a suggested fill order in my first book: Running Lean.

business model canvas sequence

Over the years, however, I found myself tweaking this fill order for better flow. While starting with customers and problems was always the common thread, ordering the other boxes changed ever so slightly.

business model canvas sequence

The original question then morphed into: Why is there a different suggested fill order across your books and the online app? Which is the right order?

After years of coaching and reviewing thousands of Lean Canvases, I have finally uncovered the right fill order, and I’m ready to reveal it.

Are you ready? Wait for it…

There is none.

Good ideas can come from anywhere.

I made a short list of idea sources recently:

1. Scratch your itch 2. R&D/Invention 3. Analogs 4. Accidental discovery 5. Customer requests 6. External changes 7. Growth Directive 8. Exploit an Unfair Advantage 9. Innovation Theory

As you can see from this list, ideas (yes, even good ones) can come from anywhere. The best way to find a good idea is to have lots of them.

Idea generation doesn’t have to start with customers and problems.

However, the real challenge isn’t idea generation but idea validation.

While a fill order shouldn’t constrain idea generation, there is an optimal ideal validation order.

An effective validation plan prioritizes the testing of your riskiest assumptions first. How do you uncover your riskiest assumptions? This is where a Lean Canvas, properly used, can help.

Ideas are jigsaw puzzles.

As with jigsaw puzzles, ideas can have many different starting points. Irrespective of where you start, you still need to end up with a picture that comes together (business model story).

The goal of sketching a Lean Canvas is deconstructing an idea so that you see it more clearly. While imposing a starting point (like customer and problems) was well-intentioned (because they tend to the riskier boxes), I found that too many people would often fake them anyway. They would write problem statements to justify a solution that they already wanted to build. And, in the process, they gave themselves a false sense of comfort.

Everything looks like a nail when you’ve already decided to build a hammer.

Yes, this is the Innovator’s Bias. The most amazing part is that people don’t even realize they are doing this. So now I take a different approach.

Before you can confront your Innovator’s Bias, you have to be able to see it.

Instead of imposing a specific order, I now direct people to fill out their canvas by starting with their idea backstory. These triggers reveal a lot about the situation, context, biases, and pitfalls that often also come along for the ride.

Here’s how I do this:

How to Deconstruct an Idea

1. take a quick snapshot of an idea.

The goal of a first Lean canvas isn’t achieving perfection but taking a snapshot. I recommend setting a timer for 20 minutes and filling out as many boxes as possible within that time limit. It’s okay to leave boxes blank.

Start with your idea's backstory. Even though your idea may have felt like a flash of inspiration, ideas can always be traced back to one or more specific events or triggers that caused you to take action.

The Uber founders, for instance, supposedly got the idea after they were unable to find a taxi after an event in Paris. They encountered a problem and decided to do something about it (scratch your itch). If I were sketching that canvas, I’d start with the problem box.

If you’re a researcher with a discovery or invention you’re commercializing, you’re starting with the solution box. You might as well make that explicit on the Lean Canvas.

If management asks you to find a new market revenue stream, make that your explicit starting constraint.

If you want to give it a go, you can get started with a blank Lean Canvas template at .

2. Study your chain of beliefs

What were the first three boxes you filled? Where you start is quite telling.

Filling out a Lean Canvas is essentially stacking a chain of beliefs that build on each other. The early links in the chain constrain and shape your idea. Also, any faulty or weak assumptions early in the chain have a ripple effect. This is why it’s particularly insightful to study and be critical of the early links in your chain of beliefs — your idea backstory.

business model canvas sequence

What’s interesting to note here is that the seemingly random order of the Lean Canvas is a gift in disguise. Had the Lean Canvas been organized more logically, people might have been led to fill it in that order and miss following their own more natural thinking order.

Not surprisingly, the solution box often makes the top starting point for most ideas. Next in line are probably revenue/growth directives and exploiting a preexisting unfair advantage.

As you work through your chain of beliefs, categorize each one into these buckets: - a leap of faith (gut instinct), - an anecdotal observation, or - a fact (based on empirical data).

This will help you see how grounded your idea is currently.

3. Reorder your chain of beliefs

The point of this exercise isn’t to fault your idea-generation method. Remember that “good ideas” can come from anywhere. But how you act on your idea is a much greater determinant of success than the source of the idea itself.

For an idea to succeed, it needs to simultaneously address three types of risks: customer, market, and technical. We can also show this as the intersection of IDEO’s three circles:

business model canvas sequence

Ensure the starting links in your chain cover all three risks and are ideally grounded in factual data. If not, you know what to do next. Get some answers by running some learning experiments.

The Universal Starting Point

For most products, feasibility isn’t what’s riskiest but desirability, then viability. In other words, getting your customer’s attention is the first battle — more so today than ever.

To help you home in on your desirability story, I created a Lean(er) Canvas which lets you focus on this almost universal starting risk.

Read more about the Lean(er) Canvas.

Reorder your Chain of Beliefs with a leaner Lean Canvas

Reorder your Chain of Beliefs with a leaner Lean Canvas

Give Yourself Permission to Scale

Give Yourself Permission to Scale

You might also like.

What is the Right Fill Order for a Lean Canvas?

Why and How to Model a Non-profit on the Lean Canvas

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Developing a business model canvas

  • February 4, 2021

=MC Consulting | Developing A Business Canvas Model - Illustration of a man in an office pointing to a strategy whiteboard

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The latest from =mc consulting, my top tip from making the ask, birmingham museum goes behavioural, we’re all (not) going to the zoo tomorrow, so donate to the animals you love, bernard ross leading donor decision lab at international fundraising congress in holland, making the ask: =mc consulting directors author a groundbreaking new book on successful high value solicitation.

The canvas ensures your approach is thought through by asking you to scope the nine essential elements of a business model and showing how they connect systematically .

The canvas is one of the newer strategic tools, based on brilliant work done by two European management consultants Alex Osterwalder and Yves Pigneur . It has been further developed by Angela Cluff and Bernard Ross at =mc consulting to make it useful for public bodies, charities, INGOs and NGOs.

Nine Key Elements

The canvas, in essence, asks you to explain how your existing or new business idea works in terms of nine key interlinked elements. These elements are the essential components that make up your business model.

Here is what every section in the canvas means and the kinds of content it contains:

1. Key Partners

Individuals or agencies, normally external, who contribute to some part of your business canvas. These can be suppliers, affiliates, vendors and even competitors. You may explore here what resources/services you get from them and link them to how they add value.

2. Key Activities

3. key resources, 4. value proposition, 5. customer relationships, 6. distribution/engagement channels, 7. customer segments, 9. revenues, sequence for developing a strategy canvas.

You can create the canvas from almost any starting point:

  • Considering what you might do with partners
  • Working out how to reach a financial target
  • Establishing who might be a new customer?
  • Thinking about something you can do and how to monetize it?

However, it is normally done in a particular sequence, ensuring you begin with and then build on the more important components.  This allows you to focus and then elaborate on each item separately. A common sequence would be:

  • Begin by identifying your current or potential Customer Segment(s)
  • Consider what you have to offer and how it meets customer needs- your Value Proposition
  • Next map out the Customer Relationships
  • Then consider the most appropriate Channels
  • Identify the Key Activities you need to undertake
  • Identify the Key Resources you need to acquire or have access to
  • Establish who could come on board as Key Partners
  • Clarify your potential Revenue Streams
  • Work out the Cost Structure to deliver your Value Proposition

But you can begin as you would with a jigsaw and simply fill in what is obvious, and then build out to the other sections.

What the canvas doesn’t cover

Note that the canvas doesn’t explore some other elements that you might want need to create a complete business case – these include :

  • context in which you might be operating?- normally developed though a PEST or SWOT
  • competition who else is in the market or what alternatives are there to your proposition?
  • culture: does your agency have a positive approach to developing new ways of working?
  • competencies: do you need to develop some organisation skills to deliver the model?
  • capital: how will you secure the startup finance needed to underpin development?

There are other tools that can help you scope these.

How to find out more

=mc consulting has worked with a wide range of charities on adapting their business models. 

We’ve used the model with a range of organisations from major INGOs like Doctors without Borders USA and UNICEF International , UK charities like the British Red Cross , NSPCC , local authorities such as London Borough of Brent , London Borough of Hackney , Rotherham MBC and small social enterprises like Crossroads Care in Kent and Age Exchange .

If a Business Canvas Model sounds interesting and if you’d like to find out more about them or strategic development generally then =mc consulting  can help you consider how or what to change.

Developing a Social Business Model Canvas | Cover Image

You can download an explanation of the model and how you can use it here .

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