What is a Business Model Canvas?
The Business Model Canvas (BMC) is a strategic management template for developing new or documenting existing business models. It’s a visual chart with 9 elements describing a firm’s value proposition, infrastructure, customers, and finances.
History of the Business Model Canvas
Created by Alexander Osterwalder and Yves Pigneur, the Business Model Canvas was first introduced in Osterwalder’s 2005 dissertation and later popularized in their 2010 book “Business Model Generation.”
Why Use a Business Model Canvas?
1. Visual and Intuitive
Unlike traditional business plans that can be dozens of pages long, the BMC fits on a single page, making it easy to understand and communicate.
2. Flexible and Iterative
The canvas format allows you to easily update and pivot your business model as you learn and validate assumptions.
3. Comprehensive Yet Simple
Despite its simplicity, the BMC covers all essential aspects of a business model in 9 key building blocks.
The 9 Building Blocks
1. Customer Segments
Who are you creating value for? Who are your most important customers?
2. Value Propositions
What value do you deliver to the customer? Which customer problems are you solving?
3. Channels
How do you reach your customer segments? How do you deliver your value proposition?
4. Customer Relationships
What type of relationship does each customer segment expect? How do you acquire and retain customers?
5. Revenue Streams
For what value are your customers really willing to pay? How are they currently paying?
6. Key Resources
What key resources does your value proposition require? What about your channels, customer relationships, and revenue streams?
7. Key Activities
What key activities does your value proposition require? What about your channels, customer relationships, and revenue streams?
8. Key Partners
Who are your key partners? Who are your key suppliers? What key resources are you acquiring from partners?
9. Cost Structure
What are the most important costs inherent in your business model? Which key resources and key activities are most expensive?
How to Use the Business Model Canvas
- Start with Customer Segments - identify who you serve
- Define Value Propositions - determine what value you deliver
- Map out Channels - how you reach customers
- Establish Customer Relationships
- Identify Revenue Streams
- List Key Resources needed
- Define Key Activities required
- Identify Key Partners
- Calculate Cost Structure
Try It Yourself
Ready to create your own Business Model Canvas? Use our free interactive tool to start mapping out your business model today.