What is Business Model Canvas

What is Business Model Canvas?

6-8 minutes

What is the Business Model Canvas?

The Business Model Canvas (BMC) is a strategic management and entrepreneurial tool which is a visual chart that allows you to describe, design, challenge, invent, and pivot your business model. It provides an organizational blueprint for further planning and action. The resulting canvas is a single-page business plan that represents how an organization creates and delivers value to its customers in the future. You can design a business model canvas by yourself but it is more effective if done by a group of people, for example with colleagues or domain experts. The canvas collects information under nine areas critical to an organization by addressing value proposition, customers, infrastructure, and finances. The Business Model Canvas is useful for:

Startups and entrepreneurs

• New products or services within an existing business model
• Organizations reassessing their old business model
• Alignment of plans throughout all levels of the organization
• Organizations seeking new relationships with customers, key partners, and investors
• Consultants and advisors tasked with assisting or evaluating an organization
• Businesses undertaking mergers or acquisitions

The Nine Basic Building Blocks of Business Model Canvas

The Business Model Canvas breaks your business model down into nine easily-understood blocks which show the logic of how your company intends to make money. It typically uses sticky notes to add items to your printed Business Model Canvas, in this way you can easily more the position of an item from one building block to another.

Build My Canvas with this Template

You can create your Business Model Canvas by completing the building blocks in the following order:

1. Customer Segments – Who are the customers?

Define the different groups of people or organizations you aim to reach and serve. Who are the customers? For whom are you creating value? Who are your most important customers?

2. Value Propositions – What’s compelling about the proposition?

Describe the products or services that create value for your customers.

• Why would a customer choose your company?
• What customer problem or need do you solve?
• Which products or services are offered?

3. Channels – How are these propositions promoted, sold and delivered?

Determine how you reach your customers to deliver the value.

• How does your company reach customers?
• Which communication, distribution and sales channels are used?
• How would customers want to be reached?

4. Customer Relationships – How do you interact with the customer through their ‘journey’?

Define which kind of relationships your company has with the customers.

• How personal is the relationship with the customer?
• What type of relationship does the customer expect?