BUSINESS

MODEL CANVAS
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.
What is a Business Model
Canvas?
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.
What is a Business Model
Canvas?
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.
What is a Business Model
Canvas?
The Business Model Canvas is a
powerful tool for visualizing and
assessing your business idea or
concept. Developed by Alex
Osterwalder and Yves Pigneur,
it condenses essential business
elements into a single page.
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 is a
powerful tool for
planning,
analyzing, and
communicating
your business idea.
Nine Key Elements of the
Canvas:
oCustomer Segments: Who are
your target customers?
oValue Propositions: What value
do you offer to customers?
oChannels: How do you reach and
interact with customers?
Nine Key Elements of the
Canvas:
o Customer Relationships: How do
you build and maintain relationships?
o Revenue Streams: How do you
make money?
o Key Resources: What
assets/resources are crucial for your
business?
Nine Key Elements of the
Canvas:
oKey Activities: What actions
are necessary to deliver value?
oKey Partnerships: Who do
you collaborate with?
oCost Structure: What are your
fixed and variable costs?
What are the
Benefits of Using
the Business Model
Canvas:
Why do you need a
business model canvas?
 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.
Benefits of Using the
Business Model Canvas:
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.
Benefits of Using the
Business Model Canvas:
The comprehensive overview
also ensures that the team
considers all required
components of their business
model and can identify gaps
or areas for improvement.
Benefits of Using the
Business Model Canvas:
The BMC allows the team to
have a holistic and shared
understanding of the business
model while enabling them to
align and collaborate
effectively.
Benefits of Using the
Business Model Canvas:
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.
Benefits of Using the
Business Model 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.
Benefits of Using the
Business Model Canvas:
It’s easier to edit and
can be easily shared
with employees and
stakeholders.
Benefits of Using the
Business Model Canvas:
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.
Benefits of Using the
Business Model Canvas:
The business model
canvas can be used by
large corporations and
startups with just a few
employees.
Benefits of Using the
Business Model Canvas:
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.
Benefits of Using the
Business Model Canvas:
You can use a BMC template
to facilitate discussions and
guide brainstorming sessions
to generate insights and ideas
to refine the business model
and make strategic decisions.
Benefits of Using the
Business Model Canvas:
The BMC is action-oriented,
encouraging businesses to
identify activities and
initiatives to improve their
business model to drive
business growth.
Benefits of Using the
Business Model Canvas:
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.
Note
 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.
Here’s a step-by-step guide on how
to create a business canvas model.

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

Step 3: Draw the canvas

Divide the workspace into nine
equal sections to represent the
nine building blocks of the
business model canvas.
Here’s a step-by-step guide on how
to create a business canvas model.

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

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

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

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.
When filling out a Business
Model Canvas, you will
brainstorm and research 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.
Customer
Segments
Part 1
Customer Segments
 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. allows you to better serve their needs, specifically
by customizing the solution you are providing them.
 After a thorough analysis of your customer segments,
you can determine who you should serve and ignore.
Then create customer personas for each of the selected
customer segments.
There are different customer segments a
business model can target and they are;

 Mass market: A business model that

focuses on mass markets doesn’t
group its customers into segments.
Instead, it focuses on the general
population or a large group of people
with similar needs. For example, a
product like a phone.
There are different customer segments a
business model can target, and they are;

 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.
There are different customer segments a
business model can target and they are;
 Segmented: Based on slightly
different needs, different groups
could be within the main customer
segment. Accordingly, you can
create different value propositions,
distribution channels, etc. to meet
the various needs of these
segments.
There are different customer segments a
business model can target and they are;

 Diversified: A diversified
market segment includes
customers with very
different needs.
There are different customer segments a
business model can target and they are;

 Multi-sided markets: this

includes interdependent customer
segments. For example, a credit
card company caters to both their
credit card holders and merchants
who accept those cards.
 Customer
Relationship
Part 2
Customer Relationships
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.
There are several types of
customer relationships
 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 regarding 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.
Channels
Part 3
Channels
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
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.
Revenue
Streams
Part 4
Revenue Streams
Revenue streams are the sources
from which a company generates
money by selling its product or
service to the customers. And in this
block, you should describe how you
will earn revenue from your value
propositions.
Revenue Streams
A revenue stream can belong to one of
the following revenue models,
 Transaction-based revenue made
from customers who make a one-time
payment.
Revenue Streams
A revenue stream can belong to one of
the following revenue models,
 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.
There are several ways you can
generate revenue from

 Usage fee: by
charging the
customer for the use
of its product or
service
There are several ways you can
generate revenue from

 Subscription
fee: by charging the
customer for using its
product regularly and
consistently.
There are several ways you can
generate revenue from

 Lending/ leasing/
renting: the customer
pays to get exclusive
rights to use an asset
for a fixed period.
There are several ways you can
generate revenue from

 Licensing: The
customer pays to get
permission to use the
company’s intellectual
property.
There are several ways you can
generate revenue from

 Brokerage
fees: revenue generated
by acting as an
intermediary between
two or more parties.
There are several ways you can
generate revenue from

 Advertising: by
charging the customer
to advertise a product,
service, or brand using
company platforms.
 Key
Activities
Part 5
 Key Activities
 Whatare 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 of superior quality.
Example
Key Activities
Production:
Baking and selling cupcakes.
To manufacture and distribute high-
quality cupcakes by conducting the
baking process, packaging for
distribution, and managing delivery
logistics to fulfill consumer demand.
There are 3 categories of key
activities.
 Problem-solving: finding
new solutions to
individual problems faced
by customers.
Key Activities
Problem-Solving: Providing a
tutoring Service.
To enhance students’ academic
performance by developing
educational materials, delivering
tutoring sessions, and offering
homework assistance through tailored
educational support.
There are 3 categories of key
activities.
 Platform/ network: Creating and
maintaining platforms. For
example, Microsoft provides a
reliable operating system to
support third-party software
products.
Key Activities
Platform/ network: Operating an
online store for local artisans.
To provide a digital marketplace
for local artisans by developing and
maintaining an e-commerce platform
and facilitating transactions between
crafters and consumers.
 Key
Resources
Part 6
Key Resources
This is where you list which key
resources or the main inputs
you need to carry out your key
activities 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 Resources
 Human (employees)
• A team of skilled bakers and sales staff to ens
ure production efficiency and customer servic
e for a bakery business.
 Financial (cash, lines of credit, etc.)
• A bank loan was secured to finance a coffee
shop's initial setup,
covering equipment, ingredients, and marketi
ng efforts costs.
Key Resources
 Intellectual (brand, patents, IP, copyright)
• A trademarked unique logo and name for a c
lothing line to build brand recognition and protect
the business identity.
 Physical (equipment, inventory, buildings)
• A fleet of delivery vehicles owned by an o
nline grocery delivery service to ensure timely an
d efficient delivery of products to customers.
 Key
Partners
Part 7
Key Partners
Key partners are the external
companies or suppliers that will
help you carry out your key
activities. These partnerships are
forged to reduce risks and acquire
resources.
Types of partnerships are
 Strategic
alliance: partnership
between non-
competitors.
Bakery and Coffee shop
Key Partners
Strategic Alliance
A partnership between a bakery
and a local coffee shop to cross-
promote each other’s products
without direct competition.
Types of partnerships
are
 Coopetition: strategic
partnership between
partners.
Key Partners
Coopetition
A strategic partnership between
two mobile phone
manufacturers to collaborate on
research and development while
competing in the market.
Types of partnerships are
 Joint
ventures: partners
developing a new
business.
 Key Partners
Joint Ventures
Two tech companies partnering to de
velop a new software solution, combi
ning their expertise to create an inno
vative product.
Types of partnerships
are
 Buyer-supplier
relationships: ensure
reliable supplies.
Key Partners
Buyer-Supplier Relationships
A restaurant establishes a reliable supp
ly
chain with a local farm to ensure a con
sistent and fresh supply of organic ingr
edients.
 Cost
Structure
Part 8
Cost Structure
 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).
Cost Structure
 Fixed Costs: Rent of delivery track (xxxx)
 Variable
costs: Labor and Fuel for the
water pump (xxxx)

Other significant costs:

 Maintenance of the water pump (xxxx)
 Marketing and branding of the product
(xxx)
 Value
Propositio
n
Part 9
Value Propositions
 This building block 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 different from
your competitors. If you are offering a new product, it
should be innovative and disruptive. And if you are
offering a product already 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

The quality of our tilapia is

supreme, promising
healthy, safe freshwater
food.