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.
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 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.
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.
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.
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).
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).
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.
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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.
Of all of the start-up tools out there, the Business Model Canvas is one of the most well-known and relied-upon to help entrepreneurs transform an idea into an organized strategy and an actionable business plan.
The Business Model Canvas gives entrepreneurs a wide snapshot of every aspect of their business – everything from the value proposition and customer segments to operations and the financials. The tool itself, however, is no more complex than a series of nine boxes representing business segments drawn across one sheet of paper. A large part of its effectiveness is in its simplicity. The exercise forces owners to stay focused and concise as they map out their business according to each of the boxes to hone in on their business strategy and plan.
A Business Model Canvas lets you put your entire business down on paper and assess your strategy, planning gaps and exposure to risk.
According to Bruce Gitlin, SCORE mentor and business development expert, the Business Model Canvas can help entrepreneurs address specific risks and acquire more information about competitors, costs, customer segments or a market niche.
"Many start-up entrepreneurs and small businesses are so busy trying to get started and survive that they spend little time planning. When they do try to plan, they are often confused and don't know where to start,” explains Gitlin. “This tool sets an overarching framework for developing a business strategy, a detailed business plan, and/or a prioritized action plan.”
You can easily create your own Business Model Canvas and go through the exercise yourself.
When planning your start-up, go through your own Business Model Canvas exercise and integrate your completed canvas into your business plan. If your business is already operating, going through the exercise is just as valuable. You’ll have the opportunity to assess your business plan using actual data and refine your strategy to get closer to your goals.
Here is a breakdown of the nine Business Model Canvas building blocks and how to think through each one as you create your own canvas.
- Key Partners
Who are the buyers and suppliers you need to form relationships with? What other alliances will help you accomplish core business activities and fulfill your value proposition to customers?
- Key Activities
What are the most important activities you must engage in to fulfill your value proposition, to secure distribution channels, to create and strengthen customer relationships, to optimize revenue streams, and more?
- Key Resources
What resources do you need to create value for your customers and sustain your business?
- Value Proposition
What core problem does your business solve? What benefits does your business deliver? And, what products or services will you offer to meet the needs of your customers?
- Customer Segments
Who will your business serve? Will you serve a single customer type or multiple customer segments? Which customers are the most critical for your business’ success?
- Customer Relationships
What types of relationships will you forge with your customers? What are the relationship expectations from each customer segment?
- Sales Channels
Through what means will you reach your targeted customers and deliver your products and services to them? Which will be the most cost-effective? How are your sales channels integrated?
- Cost Structure
What are all of the costs that you’ll incur while operating your business? There are two primary types of cost structures: value-driven and cost-driven. A part of this block is determining which structure makes the most sense for your business and factoring that into your cost strategy.
- Revenue Stream
How will you charge for our product or service? What are customers willing to spend? And, how much will each revenue stream contribute to your overall annual revenue?
Identifying planning gaps between these nine building blocks is the real value of the Business Model Canvas.
According to Gitlin, gaps in planning stand out when using the tool, making it effective for entrepreneurs who are new to starting and running a business.
"The Business Model Canvas helps visualize what is important and forces users to address key areas,” he says. “It can also be used by a team (employees and/or advisors) to understand relationships and reach agreements."
Completing your own Business Model Canvas is one of the most valuable planning steps in your overall business plan. Whether you’re a new business owner crafting a business plan for the first time or an owner looking to address planning gaps in a current business, going through the Business Model Canvas exercise is even more valuable with a SCORE mentor by your side.
Copyright © 2023 SCORE Association, SCORE.org
Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.
The 9-Step Business Model Canvas Explained (2023 Update)
Written by Raquel Alberdi
Business | entrepreneurship, 11 comments(s).
Blog » The 9-Step Business Model Canvas Explained (2023 Update)
“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”.
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:
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:
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.
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.
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:
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.
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.
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 Hudson Yards, New York
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.
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.
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.
As you can see, we’ve filled in the entire right-hand side of our business model canvas. We touched upon:
- 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.
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.
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:
- 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.
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.
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:
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.
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 .
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.
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.
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I am a DBA student. I have used your site a lot. Thank you for the information
Well defined steps, Thanks for good contents.
Dear Sir many thanks for you guideline. it was very effective for me. Thanks a Million
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
you’ve done a great job. keep it up
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.
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The Business Model Canvas: A Quick How-To Guide
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.
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.
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 Twitch.tv 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.
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.
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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The Business Model Canvas
Understanding what makes your company successful.
By the Mind Tools Content Team
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
The Business Model Canvas is the property of BusinessModelGeneration.com / strategyzer.com , 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.
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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The Business Model Canvas
What is the business model canvas.
The business model canvas is a tool designers use to map out a business or product’s key actors, activities and resources, the value proposition for target customers, customer relationships, channels involved and financial matters. It gives an overview to help identify requirements to deliver the service and more.
“A business model describes the rationale of how an organization creates, delivers, and captures value.” — Alexander Osterwalder, Co-creator of the Business Model Canvas
Learn about the business model canvas and how it helps in design.
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The Business Model Canvas – Flexible Chart, Early-Warning System and More
In service design , two tools are essential to use early in your design process: the business model canvas and the value proposition canvas . You can use the business model canvas to build an overview of changes to be made to an existing business (e.g., a merger) or of a totally new business opportunity or market gap . At the start of your design process, it’s vital to map out the business model of your service to see how it will fit into the marketplace. You’ll also need to ensure what you propose can bring maximum value to both your customers and business, and keep doing so in terms of customer retention, profitability and more.
To gain the most accurate vision of a proposed product or service, it’s essential to understand all the components and dynamics of not only the customer experience but also the service as a whole ecosystem . This ecosystem contains all the channels and touchpoints that must work together to deliver and sustain maximum value to the customer.
This canvas gives you several important advantages, namely these:
It’s collaborative – so you can bring the various partners together on the same page to generate and analyze ideas, and have an early testing ground for concepts before you advance to service staging a prototype.
It’s human-centered – so you can keep close track on how to create and maximize value for customers as well as stakeholders and other partners.
It makes it easier to collect rich data – if you have a clear purpose and strategy in mind.
A business model canvas typically contains 10 boxes:
Key Partners – The people who will help you fulfill the key activities, using the key resources.
Key Activities – Those vital actions that go into the everyday business to get things done; these are all the activities needed to realize and maintain the value proposition, and to power everything else involved.
Key Resources – The tools needed to get those things done, stretching across all areas the canvas covers to include, for example, customer retention.
Value Proposition – The item you think will create value for your customer: e.g., a new idea, a price drop. This is a summary of what your business will deliver to customers, and feeds into the value proposition canvas, the tool you’ll use to expand this.
Customer Relationships – Where you envision the relationship each customer segment expects: e.g., customer acquisition, retention and upselling (i.e., How do you get customers? How do you keep customers? How do you continue to create value for them?).
(Note: boxes 5 and 4 are closely linked as everything you do revolves around retaining the customer and considering the customer lifecycle.)
Customer Segments – Your most important customers (e.g., seniors); consider the value of personas here.
Channels – How you deliver the value proposition. Will it be online, through physical means or a combination? Here, you identify which channels are the best (both desirable for customers as well as cost-efficient and cost-effective for the brand).
Cost Structure – Here you find the most essential cost drivers. This allows you to consider the return on investment (ROI).
Revenue Streams – Where you find potential revenue sources (e.g., advertising).
Sustainability – How sustainable your offering is overall, to the environment, to the social good, etc.
© Strategyzer AG, modified, CC-BY-SA-3.0
How to Build a Business Model Canvas
For the best results, follow these guidelines and aim to fill in all the gaps, looking out for cause-and-effect relationships that run between boxes/throughout:
Complete the top seven boxes (Key Partners to Customer Segments) – using all the information you can gather from your research.
Complete the next boxes:
Cost Structure – Determine the cost drivers from the Key Partners, Activities and Resources boxes; and
Revenue Streams – Determine these from the Customer Relationships, Customer Segments and Channels boxes.
Once you have established these, you can work to estimate them in monetary terms.
Complete the Sustainability box – according to the insights you’ve found.
Here’s an example of a business model canvas as a work in progress:
© Interaction Design Foundation, CC BY-NC-SA 3.0
Overall, remember your canvas is a flexible tool. It’s also a living document that you can revisit and use to find the most effective alternatives. With a clear sense of goals, a keen eye for detail and ear for input, and a readiness to refine this canvas, you can use it to fine-tune the best service prototype every time.
Learn More about The Business Model Canvas
Take our Service Design course , featuring a template for service blueprints.
Read this example-rich piece by experienced strategy designer Justin Lokitz for tips on using the business model canvas .
Find some additional tips on how to make the most of your business model canvas here .
Literature on the Business Model Canvas
Here’s the entire UX literature on the Business Model Canvas by the Interaction Design Foundation, collated in one place:
Learn more about the Business Model Canvas
Take a deep dive into Business Model Canvas with our course Service Design: How to Design Integrated Service Experiences .
Services are everywhere! When you get a new passport, order a pizza or make a reservation on AirBnB, you're engaging with services. How those services are designed is crucial to whether they provide a pleasant experience or an exasperating one. The experience of a service is essential to its success or failure no matter if your goal is to gain and retain customers for your app or to design an efficient waiting system for a doctor’s office.
In a service design process, you use an in-depth understanding of the business and its customers to ensure that all the touchpoints of your service are perfect and, just as importantly, that your organization can deliver a great service experience every time . It’s not just about designing the customer interactions; you also need to design the entire ecosystem surrounding those interactions.
In this course, you’ll learn how to go through a robust service design process and which methods to use at each step along the way. You’ll also learn how to create a service design culture in your organization and set up a service design team . We’ll provide you with lots of case studies to learn from as well as interviews with top designers in the field. For each practical method, you’ll get downloadable templates that guide you on how to use the methods in your own work.
This course contains a series of practical exercises that build on one another to create a complete service design project . The exercises are optional, but you’ll get invaluable hands-on experience with the methods you encounter in this course if you complete them, because they will teach you to take your first steps as a service designer. What’s equally important is that you can use your work as a case study for your portfolio to showcase your abilities to future employers! A portfolio is essential if you want to step into or move ahead in a career in service design.
Your primary instructor in the course is Frank Spillers . Frank is CXO of award-winning design agency Experience Dynamics and a service design expert who has consulted with companies all over the world. Much of the written learning material also comes from John Zimmerman and Jodi Forlizzi , both Professors in Human-Computer Interaction at Carnegie Mellon University and highly influential in establishing design research as we know it today.
You’ll earn a verifiable and industry-trusted Course Certificate once you complete the course. You can highlight it on your resume, CV, LinkedIn profile or on your website.
All open-source articles on the Business Model Canvas
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Business Model Canvas
What is the business model canvas.
A business model canvas provides a high-level, comprehensive view of the various strategic details required to successfully bring a product to market. The typical use case for this tool is to outline the fundamental building blocks of a business, but it can be used effectively for individual products as well. The exact ingredients may vary, but these are some of the typical components included:
- Customer segments —Who is going to use this product?
- Product value propositions —What is this going to do for the customer to make their life/job better?
- Revenue streams —How will the company make money from this product?
- Channels —How will the product be sold or distributed?
- Customer relationships —What is the success and support strategy for new customers?
- Key partners —What other companies or individuals are part of the development and go-to-market strategy?
- Key activities —What must happen internally to release this product?
- Key resources —What people, materials and budget are required to pull this off?
- Cost structure —How much will it cost to develop, manufacture, distribute, and support the product?
Asking and answering these questions should be de rigueur for any new product, but this particular framework is useful for distilling the supporting business case down into something easily digestible. By forcing everything to be on a single page, each question must be answered succinctly, which often cuts through any grandstanding to illustrate whether each area is truly addressed and viable.
How do product managers use the business model canvas?
The business model canvas serves two primary purposes for product managers : focusing their thinking during its creation along with expediting and framing the conversation when communicating with others.
Because the business model canvas is a comprehensive summary of what the product will do, who will use it, why they’ll use it, how it will happen, and how the money works, it requires a lot of thinking and homework to put it together. This exercise is very helpful for product managers to fully understand the market opportunity and refine their story while uncovering potential problem areas and fully vetting their impact. Plus the process of boiling everything down to a single page ensures that what is included is as truthful and well supported as possible.
The business model canvas can serve as a continually referenceable touchstone for the product development process and beyond, essentially serving as a mission statement for the product. As conditions on the ground change and more is learned about the product’s market reception and usage, the canvas can be updated to accurately reflect the latest information; reviewing the canvas periodically is a worthy activity in and of itself.
As a communication tool, the business model canvas is an ideal document for our short attention span world and is as useful with the executive team as it is with a junior developer. Since it only contains the most salient and relevant information, the audience won’t be drowning in details or distracted by supporting evidence or non-sequiturs. The canvas can also create a universal vocabulary for the product and get everyone using the same language and concepts going forward.
Tips for using the business model canvas
Here is how to make the most of the business model canvas and the process of creating and maintaining it:
- Note assumptions and challenge them —Since a business model canvas is developed while a product is still “theoretical” there is often a lack of actual facts to rely on. Instead, educated guesses, informed opinions and assumptions are utilized to build it out. While there’s often no escaping these, anything in the canvas that is an assumption versus a proven fact should be called out, with every effort made to both challenge the assumption and anticipate the impact if the assumption turns out to be incorrect.
- Bounce it off a virgin audience —Fellow employees and even board members will approach a business model canvas with a trunkload of inherent biases. To truly test the veracity and completeness of a canvas, allow some outside parties to validate it independently. It should be a self-explanatory document, so allowing them to review it and provide feedback without any dialogue or explanations is a great test of its worthiness and thoroughness.
- It’s easy to update, so keep it current —Unlike longer, weightier documents, the single-page nature of the business model canvas means there’s no excuse for it to languish and fall behind the business’s current line of thinking or newly gathered information. Reviewing it on a regular basis and maintaining its accuracy enhances its usefulness and is a helpful process to note when assumptions or plans have changed.
- An ever-present reminder —Thoughts, plans, goals, and assumptions were laid out succinctly in the canvas with great care and deliberation. Going forward the canvas can be continually referred to for guidance, inspiration, and level setting as folks become swept up in the momentum of product development, sales, and marketing.
- Present it in pieces —Sure, the entire business model canvas fits on one piece of paper, but there is a lot of things on that 8 ½ x 11 inch page. When presenting it, discuss each piece individually, gradually revealing the entire contents. This will prevent information overload and allow the team to convey things narratively instead of an information dump.
- Reference all the evidence —Any hard data should be clearly referenced (if not included) in the canvas to give the arguments and statements as much legitimacy as possible. Reviewers will be trying to poke holes (as they should), so firm things up whenever there’s a chance.
- Be specific —No one needs a business model canvas to understand fundamental business case elements; it is intended to tell the story and rationale for this particular product. Cut out anything generic and make it as relevant to this exact opportunity as possible. In particular, link individual customer segments with their respective value propositions, since a product won’t be all things to all people.
- Create multiple canvases —During the early phases, generating more than one business model canvas based on divergent assumptions, target markets, or value propositions can be a useful tool for exploring different directions the product could head. After the plans are firmed up, multiple canvases can still be employed, this time to see how different scenarios pan out when key factors change… it can be used as a wargaming tool to prepare for different potential outcomes.
- Who, what, and why first. How and how much second —Although a business model canvas includes everything from a value proposition and personas to implementation costs and resources, everything should be driven from the market opportunity and rationale for bringing a product to market. If those aren’t solid, spending cycles on technology and costs is a waste of time.
Creating a business model canvas puts new product ideas under the microscope and pulls together disparate sources of intelligence, opinions, hunches and research into a single piece of paper. It forces critical thinking and analysis of assumptions and guesses and provides an excellent reference point for the entire organization.
Once the canvas is approved and productization begins, the canvas can also serve as a straw man for the product roadmap, lining up future features and functionality based on the priorities laid out in the document to achieve market success.
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What is the business model canvas and why do i need it.
Starting a small business is a monumental task. It seems like there are a million things you have to take care of before you can make your first dollar. You need to register your business, set up your website, work out your budget, figure out your marketing plan, test your products, and establish good relationships with your manufacturers and suppliers.
You also need to create your business plan and your business model. So much to do.
You know what a business plan is. It’s your step-by-step guide on how your business will achieve its objectives. What you might not fully understand is you business model.
A business model is simply a design for the successful operation of a business. It’s how you create value for yourself (e.g. make money) while delivering products or services to your customers.
There are numerous types of business models, and they can all be mapped onto physical chart called the “business model canvas”.
The business model canvas and was developed by Alex Osterwalder, and if you don’t have a business model canvas it’s a great tool to use to improve the focus and clarity of what your business is trying to achieve.
It eliminates all of the fluff from the traditional business plan and lets you zero in on what’s important.
The Business Model Canvas Explained
The business model canvas is broken into nine building blocks for your customers. We’ll break down each of those segments so you can get a better understanding of what each of them means for your company.
#1 – Value Propositions
The first section is about your value proposition. Your value proposition is what your company is making and who they’re making it for. It’s not about your specific idea or product, it’s about solving a problem or filling a need. It’s also about who you are solving that problem for.
Once you know what problem your solving and who you’re solving it for, you can get into what exactly your product or service is. This is where you list all the benefits and features of your product and what they do to solve the problem.
#2 – Customer Segments
Perhaps the most important part of your canvas is the customer segments. If you don’t know who your business is catering to you’ll never be able to sell to them. You need to figure out who your customers are and why they would buy from you. You want to get very specific and figure out where your customer lives, what their social habits are, how old they are, if they’re male or female, etc. You want to be so detailed that you could draw a picture of your customer, put it on a wall, and have it detail their exact persona. On day one this is nothing but a hypothesis, but as you start testing and selling your products, you will be able to change this accordingly.
#3 – Channels
Your channels are what you use to deliver your product from your company to your customer. In the old days you really only had one channel and that was the physical channel. You had a storefront and your goal was to get people to visit your store.
With the rise of technology, a storefront is no longer necessary. Now many people use the internet and mobile devices as their channels. Even if you have a physical channel setup, you’re most likely still going to have a web presence. You need to decide which outlet or outlets are best for you to get your product to the customer.
#4 – Customer Relationships
Your customer relationships are the fourth piece in your business model canvas. This section is about how you get your customers, how you keep your customers, and how you grow your customer. The channel you choose to distribute your product will also help determine your customer relationships.
A physical store will acquire its customers differently than an online store. If you’re using a website as your main channel, you need to figure out how to get them to your website, how to get them to buy once they are there, and how to get them to hang around and buy more of your products. Just like previous steps this is only a hypothesis on day one and will be figured out as your business grows.
#5 – Revenue Streams
Your revenue streams are how you will actually make your money from your value proposition. What value is your customer paying for and how are you going to capture that value?
Depending on your company it could be a direct sales model, a freemium model, a subscription model, or a licensing model. Again, the model you choose depends on your business, and your business could use multiple revenue models. Your revenue streams aren’t about the actual pricing of your product, it’s just your way of capturing revenue.
#6 – Resources
The next section of your business model canvas deals with is your resources. This is what you need to sell your product, the assets that are required for you to be successful.
The most important resource for many new companies is financing. Do you have enough cash on hand to fund your business? WIll you need funding or a line of credit? There are also physical needs like a store, manufacturing plant, or delivery trucks. You might need intellectual properties as patents and customer lists. You might also need a good, strong workforce of salesmen, programmers and manufacturers.
#7 – Key Partners
Your key partners are the people and companies who are going to help you grow your business. There are some things you aren’t going to be able to do and some you just won’t want to do on your own, so you’ll want to partner with people that can do them for you. Two of the most common partnerships are suppliers and buyers.
The two main questions you need to ask yourself before forming a partnership is what you’re going to get from them and what activities they are going to perform. If you have a one man startup, your partnerships will likely be different than the partnerships a larger company has.
In your first year you might choose to do everything yourself just to save money. As your business grows, you will be able to invest in partnerships that can save you time and help grow profits.
#8 – Key Activities
Your key activities are the most important things your business must do to make your business model work. If you’re in the production business you’ll be making products. Maybe you’re a consultant and you’re in the business of solving problems. You could also be in sales and be responsible for getting people to buy various products.
Whatever it is that your business does, your key activities are what you need to become an expert in for your business to be successful.
#9 – Cost Structure
Your cost structure is what it’s going to cost you to keep the business running. You have to think beyond the obvious costs like your payroll, rent, and materials and be sure you are including everything.
You need to know what the most important costs are, what your most expensive resources are, and how much your activities and partnerships cost. Then you will need to ask the typical accounting questions like what your fixed and variable costs are, and any economies of scale. Anything that is going to cost you money to keep your business operational needs to be included here.
The Lean Business Model Canvas
Something that has become increasingly popular over the last few years is the “lean business” or “lean startup.” The lean business is essentially a business method that gets you from idea to business as fast as possible.
In a lean business you put out wh at is called your “minimum viable product”. This is your product in its most basic form with none of the extra bells and whistles. You put that product out to a select group of people to see if they like it. If they like it you can move on with that product, if they don’t you either pivot or scrap the idea all together.
The lean model allows you to get to market as fast and as cheaply as possible. The lean business model canvas was made in the spirit of the lean business. It’s more actionable and entrepreneur based and focuses on the way time can affect the revenue stream of a business. When the lean business model canvas was created, four more elements were added.
#1 – Problem
A problem box was created because many businesses spend a lot of time and money on a product that isn’t needed or doesn’t solve a problem. It’s important to know what problem you are solving before you do anything else.
#2 – Solution
Once you know what problem you are solving, it’s time to work on your solution. This is where you would describe your MVP (minimum viable product).
#3 – Key Metrics
Your key metrics are the range of products or services you want to provide. It is key to choose the right metrics because choosing wrong could lead to disaster for your business.
#4 – Unfair Advantage
Your unfair advantage is just that – any unfair advantage you might have over your competitors. It is very important to know if you have any unfair advantages over your competitors, or if they have any over you.
To truly make it the “lean” canvas, they had to remove the elements they didn’t think were necessary. They removed:
- Key activities
- Key resources
- Key partnerships
- Customer relationships.
They were removed because they were either a waste of time to a lean startup, covered in another element, or they were more outside focused and not focused directly on the business.
Whether you’re an established business or just getting started, a business model canvas is an amazing tool to help you reach your goals. It provides you with a one page document that cuts out the fluff lays everything out right in front of you. It’s easily editable so as your business changes you can change your canvas to match. And if you’re creating a lean startup, there is a business model canvas made just for you.
For other Canvas Models check out Toptal’s Technology Product Canvas
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Business Model Canvas Explained: Definition, Pros, Cons, and Building Blocks
So, here's the thing. We all know that we need structure to work effectively, but where do we start with so many options available? One tool worth considering is the Business Model Canvas (BMC) . Used effectively, it can give solid structure to your planning.
In this article we will examine how the model works and a few ways to use it effectively. Then, we will describe its best practices and some recommendations on getting started. Finally, we will explore possible alternatives.
Ready to get to know all about the BMC? Let's begin.
The Business Model Canvas, explained
The Business Model Canvas is a strategic management tool that helps businesses visualize and analyze their business models. It consists of 9 fundamental building blocks that describe the core aspects of a company's value proposition, infrastructure, customers, and finances (more on that later, we promise).
By using it, organizations can gain a deeper understanding of their overall business model , identify areas for improvement, and develop new strategies for growth. One of the key benefits of the BMC format is that it's very visual. Used adequately, it allows organizations to create a display of their business model in alignment with strategic business objectives and the overall value proposition.
The nine BMC building blocks were initially presented in 2005 by Alexander Osterwalder. They were based on his Ph.D. work on business model ontology, supervised by Yves Pigneur. Since its release, the authors have developed other related tools, such as the Culture Map and the Value Proposition Canvas, which have helped the BMC tool to evolve and added value to it.
Business Model Canvas examples
Some examples of the BMC include:
- Strategy planning
- Business planning
- Business modeling
Lean Canvas vs. Business Model Canvas
Both the Lean and Business Model Canvas enable you to capture your entire model on a single page. The primary difference between them is that the Lean Canvas focuses mainly on solving a particular problem. The Business Canvas Model, on the other hand, is more sales orientated and usually focuses on selling products or services.
Advantages and disadvantages of the Business Model Canvas
Even though the BMC offers a series of features in order to effectively visualize and analyze your organization's business model, there are also some possible drawbacks to be aware of – and avoid.
To start on the right note, the benefits of the Business Model Canvas include:
- A clear and comprehensive business model overview in a single visual format. This makes it easier to understand, articulate, and communicate.
- Strong collaboration and breaking down silos. Using the BMC approach incentives people to work as one team, as it involves all stakeholders, and enables them to actively participate in developing, improving, and refining the business model.
- Colleagues constantly progressing with feedback (to borrow from an ITIL principle). The BMC approach allows for a fast and efficient testing of different business model configurations, speeding up the innovation process and reducing the time to market.
- A structured and systematic approach to analyzing and designing business models, which helps identify areas for improvement and innovation.
- A flexible approach that enables innovation instead of limiting it. The framework can be adapted to different types of businesses, industries, and customer groups.
However, if you choose to work with this management tool, you need to consider its potential disadvantages :
- Using the BMC approach effectively can be challenging without prior knowledge of business modeling concepts and terminology. You will need to put the work in and do some pre-reading to get the most out of it.
- Because it's so visual, it may oversimplify the complexity of a business model, making it more challenging to articulate some of the aspects of the organization's operations and performance. This makes it unsuitable for highly-specialized or complex businesses.
- Because it's a framework rather than a prescriptive standard that must be strictly adhered to, it doesn't provide detailed guidance on implementing or executing the business model, which can lead to difficulties in translating the canvas into action.
- It can rely on assumptions and hypotheses, which may not always be accurate or relevant for real-world situations.
The 9 building blocks of a Business Canvas Model
The Business Model Canvas is organized in nine building blocks that represent a business model's key elements. These building blocks are:
- Value Proposition - The unique value the business provides to its customers and how it differentiates itself from competitors. In other words, it’s what sets your business apart, what makes it special, and what value it brings.
- Customer Segments - The different groups of customers the business targets with its products or services. This building block looks at your most important customers.
- Customer Relationships - The business' relationships with its customers and how it interacts with them. This is a fundamental building block as not only does it help you build and maintain a relationship, it also enables you to map out the cost and deliverables needed to continue to improve that relationship.
- Channels - T he different channels that the business uses to reach and interact with customers, including physical and digital channels.
- Key Partnerships - The relationships and collaborations that the business has with its suppliers, vendors, and other external partners.
- Key Activities - The key activities that the business must perform to deliver its value proposition and operate successfully. This building block helps you to define your most mission-critical actions and prioritize them accordingly.
- Key Resources - The key resources the business requires to operate, including human resources, physical assets, and intellectual property. This can also include relationships, distribution channels, and virtual assets.
- Revenue Streams - The different sources of revenue that the business generates from its customers, including one-time sales, recurring revenue, and other revenue streams. This building block also helps determine how each stream contributes to the business profit.
- Cost Structure - The various costs that the business incurs to operate, including fixed costs, variable costs, and other expenses. It also helps you identify your most expensive assets and activities to make effective financial plans for the future.
How to build a Business Model Canvas in 14 steps
The Business Model Canvas is flexible – no one size fits all. But for our money, there are 14 steps to effectively build it.
Step 1: Define the purpose
The first step is to define the purpose of the Business Model Canvas. Where are you now, and where do you want to be? What do you hope to achieve? Who is the target audience? Have you double-checked to ensure what you want to achieve is in line with the strategic objectives of the rest of the business?
Step 2: Identify the nine building blocks
Identify the nine building blocks of the BMC, review each in relation to your business, and understand their purpose.
Step 3: Define the Value Proposition
What will add value? Start by defining the unique value that your business offers to customers. This will be the foundation of your canvas.
Step 4: Identify your Customer Segments
Define the different groups of customers your business targets and their specific needs and preferences so you can focus and direct your efforts accordingly.
Step 5: Define Customer Relationships
Identify your business' relationships with its customers and how it interacts with them. You can also use this step to identify your most important relationships so you can focus more effort on maintaining and improving them.
Step 6: Determine the Channels
Identify your business's channels to reach and interact with its customers, including physical and digital channels. From a service desk perspective, this could be offering a tier 0 channel with self-service or AI-enabled support capabilities before providing tier 1 and level 2 channels which offer a more people-centric user experience .
Step 7: Define Key Partnerships
Identify your business's relationships and collaborations with its suppliers, vendors, and other external partners. Remember, it's not just relationships with customers and stakeholders that matter, your suppliers are part of your team, so manage those relationships appropriately.
Step 8: Identify Key Activities
Define the key activities that your business must perform to deliver its value proposition and operate successfully.
Step 9: Determine Key Resources
Identify the key resources that your business requires to operate, including people, knowledge and wisdom, financial assets, and IT assets.
Step 10: Determine Revenue Streams
Identify the different sources of revenue that your business generates from its customers. If you have a finance team, work with them to identify current revenue streams and plan for future ones.
Step 11: Determine Cost Structure
Work with your finance team to identify the various costs that your business incurs to operate, CAPEX, and OPEX costs.
Step 12: Build the Canvas
Once you have defined all of the building blocks, you can start creating the canvas to visualize what you are planning to accomplish.
Step 13: Review and refine
The BMC isn't a one-and-done approach. Review your model and seek feedback from your stakeholders to correct the course when needed.
Step 14: Keep going!
In the words of Walt Disney, "Keep moving forward." Build and refine your model over time to reflect current and future activities more accurately.
How to complete a Business Model Canvas
No one likes a blank page, do they? The difficult part is always getting started, but I promise, if you follow these steps, you'll be off to a great start:
- Start with the Value Proposition - Before you do anything else, fill in the Value Proposition block in the center of the canvas. This should describe the unique value that your business provides to customers and how it differentiates itself from competitors. Focus on getting this point right because value is everything in terms of the BMC.
- Add in your enablers - This will include your key activities, customer segments, relationships (both customer and supplier relationships) assets, key activities, and channels.
- Add in your financials - Put in your revenue dreams and your cost models to make your BCM more transparent and ensure there are no hidden costs.
- Progress iteratively with feedback - Once you have filled in all the building blocks, review your canvas, iterate, and redefine as needed. Seek input from stakeholders and make adjustments.
- Give the gift of clarity - Remember, this is a visual model, so don't get too stuck on the details or use too much jargon. The effect you're looking for is clear, concise, and visual.
- Relationships matter - We are talking about the relationship between each building block, so ensure they are correctly represented in your diagram.
Six alternatives to the Business Model Canvas
While the Business Model Canvas is a popular tool for developing and communicating a business model, other options are available too. Some alternatives include:
- Lean Canvas - This tool is similar to the BMC but focuses on startups and small businesses. It includes fewer blocks and focuses on validating hypotheses and testing assumptions quickly.
- SWOT Analysis - This tool helps to identify a business's strengths, weaknesses, opportunities, and threats. This can be a valuable tool for assessing the current state of a company and identifying areas for improvement.
- Business Model Innovation - This involves developing a new business model that is different from the traditional one used in the industry. It can be done through creative thinking, exploring new technologies, or adopting a new approach to customer relationships.
- Blue Ocean Strategy - This framework helps businesses to create new markets and uncontested market space. It involves identifying and focusing on areas of innovation that competitors have not explored.
- Value Proposition Canvas - This tool helps businesses to define and communicate their value proposition to customers. It focuses on the customer's needs, desired outcomes, challenges, and how the company can better meet those needs than its competitors.
The Business Model Canvas or BMC is a strategic management tool that helps businesses visualize, design, and analyze their business models. Some of its common applications include business planning, value propositions, and modeling.
If you want to give it a shot to plan your organization’s strategy, make sure that you have your BCM template ready with the nine key elements that need to be completed. And don’t forget to follow through our six tips on how to get started!
Frequently Asked Questions
How do you make a good business model canvas .
To make a good Business Model Canvas, clearly define the unique value proposition of your business and ensure that the key building blocks of the canvas (such as channels, revenue streams, and cost structure) are aligned with the overall strategic objectives of the business. Review and improve the canvas as needed to continue improving and aligning with business needs.
What are the four types of business models?
The four types of business models are product, service, platform, and sub-subscription-based.
What are the three sections of the Business Model Canvas?
Value Propositions, enablers, and financial planning.
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Why a business model canvas is important to organizational innovation.
How can an organization innovate?
That's the question every business leader should be asking themselves in 2016. Failing to innovate successfully could mean closing your doors in today's business and technology climate.
To achieve organizational innovation , every facet of a business needs to move together in the same direction. That can be difficult without a clear visual of what your business model is and how your activites should be aligned. You need to identify what your company wants - and is prepared - to do before innovation can turn from a buzzword into an action.
Need help with your company's innovation strategy? Request a consultation. We'd love to talk.
Are you familiar with a Business Model Canvas? You should become familiar - the Business Model Canvas is a methodology on the rise. It helps companies visualize and position their business models for growth and innovation.
What is a Business Model Canvas?
Strategyzer defines it : "The Business Model Canvas, is a strategic management and entrepreneurial tool. It allows you to describe, design, challenge, invent, and pivot your business model."
The Business Model Canvas breaks your business model down into easily-understood segments: Key Partners, Key Activities, Key Resources, Value Propositions, Customer Relationships, Channels, Customer Segments, Cost Structure, and Revenue Streams.
By digging into these elements of your company, you can recognize and act on areas that can be improved. It also reveals clear paths on which to build your organizational innovation strategy.
Gaining a better understanding of your business never hurts. It helps you communicate your goals to your team. It helps communicate to clients why they should do business with you. It helps pull into focus what your business does and how it will continue to do it - successfully - into the future. The Business Model Canvas is an invaluable tool for startups and Fortune 500 staples alike.
Watch this for more information on why your company should use the Business Model Canvas:
How can it help organizational innovation?
Innovation is disruptive. But, not every business is prepared for disruption. Without a plan, pivoting is next to impossible. For an organization to innovate, it has to have a fine-tuned strategy that guides it towards a viable future business model. Using a tool like the Business Model Canvas can serve to unite your company under a clear visualization of where your organization sits today and where it can be tomorrow (and how it will get there).
The Business Model Canvas moves innovation out of the 'in-theory' stage and into the planning stage. See clearly, for example, what your strongest revenue streams are and how they can complement each other. Or, more closely examine your value propositions and discover better ways to position your product or service to customers. Use customer segments to find out exactly who you're talking to and how to approach them more effectively.
Your company's future is hidden in the details. Find it and you'll be ready to innovate successfully.
Learn More About Organizational Innovation:
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Pentingnya Menerapkan Business Model Canvas
Oleh: Anisa Safira Braza
Seperti yang kita tahu, bahwa didalam sebuah bisnis, apapun bentuk bisnis itu, pasti dari para pebinis ingin mengoperasikan kegiatan bisnisnya menjadi bisnis yang baik dan berjalan sesuai dengan goals bisnis tersebut. Di dalam sebuah bisnis juga memerlukan strategi, manajemen, maupun sistem yang mempermudah orang-orang di dalamnya untuk bekerja secara efektif dan sesuai goals yang dimiliki perusahaan. Salah satu model bisnis yang terbukti efektif dan sering diterapkan adalah bisnis model canvas . Nah, berbicara tentang bisnis model canvas, pasti sudah tidak asing lagi. Maka dari itu kita akan membahas apa itu bisnis model canvas dan seberapa pentingnya menerapkan bisnis model canvas terhadap bisnis?
Bisnis model canvas merupakan sebuah tool dalam strategi manajemen untuk menterjemahkan konsep, konsumen, infrastruktur maupun keuangan perusahaan dalam bentuk elemen-elemen . Terdapat elemen Key Partners , Key Activities , Key Resources , Value Propositions , Customer Relationship , Channels , Customer Segments , Cost Structure dan Revenue Streams .
Jika dilihat lebih teliti, bisnis model canvas membagi hal- hal penting ke dalam beberapa fokus yang jelas. Hal ini memudahkan para pelaku bisnis dalam berbagai aspek dan bisa diterapkan oleh perusahaan baik skala besar maupun kecil.
V alue proposition merupakan nilai jual produk/jasa kita sehingga konsumen memilih perusahaan kita daripada kompetitor. Sebelum menentukan hal yang lain, value proposition sangat krusial untuk diketahui agar bisnis kita menjual apa yang konsumen benar- benar butuhkan dan memastikan apakah perusahaan kita menjual s olusi atas permasalahan mereka.
Berikut adalah beberapa perta nyaan yang dapat membantu:
- Apa penyebab masalah itu terjadi?
- Mengapa konsumen ingin masalah tersebut hilang?
- Apa manfaat bisnis saya untuk konsumen?
Value proposition saling berkaitan erat dengan segmentasi konsumen kita . Target konsumen bisa dibagi menjadi berbagai segmen sesuai kebutuhan, contohnya, berdasarkan usia, gender, ho bi maupun tingkat konsumerisme.
Lalu, bagaimana cara mengetahui secara spesifik target konsumen kita? Berikut contoh pertanyaannya:
- Kepada siapa solusi Anda paling memberikan dampak positif?
- Apakah solusi Anda cocok untuk perorangan atau bisnis lain?
- Bagaimana karakter perorangan atau bisnis tersebut?
- Solusi Anda cocok untuk laki-laki atau perempuan? Atau keduanya?
- Berapa umur mereka?
Jadi, tadi kita sudah menentukan Value Proposition dan segmentasi konsumen. Selanjutnya adalah memahami konsumen kita dan “mendekati” mereka. Cara mendekati konsumen ada banyak, baik secara personal, by phone, dan sebagainya. Di dalam customer relationship, kita dapat mengetahui cara apa yang paling efektif untuk berinteraksi dengan konsumen maupun calon konsumen. Misalnya memiliki bisnis online yang menjual produk aksesoris rambut dengan target usia 18-25 tahun. Tentunya target konsumen adalah perempuan yang suka berdandan atau berpenampilan rapi. Lalu bagaimana membuat mereka mau membeli produk aksesoris rambut? Dengan memberikan informasi seputar perawatan rambut, tips mengikat rambut, dan sebagainya.
Cara termudah menjangkau konsumen milenial adalah dengan b erinteraksi lewat channel yang sering dida tangi oleh target konsumen , berkomunikasi sesuai dengan bahasa mereka (ala milenial misalnya) dan memberikan konten-konten yang relevan dengan interest mereka.
Di bagian customer relationship, kita sudah membahas cara pendekatan dengan konsumen sesuai dengan bahasa dan interest mereka. Kini saatnya benar-bena r menemui dan berbicara mereka.
Bisa dikatakan, channel merupakan tempat pertemuan kita dengan konsumen. Pertanyaan berikut dapat membantu mengidentifikasi tempat mana yang ide al untuk bertemu dengan mereka.
- Dimana konsumen Anda berada?
- Apakah mereka aktif menggunakan sosmed?
- Apakah mereka suka mendengarkan radio atau aplikasi music?
- Apakah mereka suka menghadiri event atau seminar?
- Apakah mereka menonton TV?
Hal ini dapat menentukan dimana kita harus meletakkan advertisement. Apakah di billboard, di Instagram, di koran dan lain sebagainya.
Key activities merupakan aktivitas bisnis yang dijalankan sehari-hari agar dapat mencapai value proposition. Beberapa panduan pertanyaan yang perlu di jawab:
- Aktivitas bisnis seperti apa yang dapat diterapkan di dalam perusahaan untuk membantu Anda agar konsumen puas?
- Bagaimana dengan distribusi produk/jasa Anda?
- Apakah Anda memiliki tenaga ahli untuk menjalankan kegiatan perusahaan sehari-hari?
Agar tetap kompetitif di dalam industri bisnis yang kita geluti, kita a membutuhkan sumber daya yang tepat karena ini adalah asset yang kita miliki untuk mendukung aktivitas perusahaan. Beberapa contoh sederhana key resource adalah computer, ruang kerja, karyawan, kendaraan, listrik, dan lain sebagainya.
Dalam sebuah bisnis, membutuhkan partner kerja yang mendukung perusahaan kita . Jika sampai saat ini belum menemukan keunikan dari produk/jasa kita dikarenakan kurangnya netwoking, kit a membutuhkan partner kerja yang dapat membantu mencapai value proposition.
Jika membuka sebuah bakery, kita membutuhkan supplier bahan kue yang jaraknya dekat agar bahan yang dikirim selalu fresh. Nah, supplier itulah yang menjadi key partner kita dalam berbisnis agar bisa selalu menjaga kualitas roti yang di jual.
Cost structure merupakan skema finansial yang membiayai operasional perusahaan kita . Berapa uang yang harus dikeluarkan untuk melaksanakan aktivitas perusahaan per harinya? Berapa biaya untuk sumber daya yang dipakai? Berapa harga pemasaran produknya?
Setiap perusahaan membutuhkan aliran pendapatan untuk tetap bisa menjalankan aktivitasnya sehari-hari. Revenue stream merupakan sumber pendapatan perusahaan dari berbagai sumber, seperti hasil pen jualan, dividen dan sebagainya.
Bisnis model canvas merupakan teknik yang efektif untuk diterapkan di dalam perusahaan karena dapat membantu memetakan bisnis kita secara terstruktur. Kita juga dapat menggunakan bisnis model ini untuk mewujudkan ide-ide menjadi hal yang konkret.
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Business Model Canvas : Pengertian, Tujuan dan Manfaatnya
Business Model Canvas : Pengertian, Tujuan dan Manfaatnya – Untuk membuat atau membuka sebuah usaha, pastinya dibutuhkan rencana yang sangat matang dan jelas dari segala aspek. Kamu mau membuka bisnis sendiri, baik itu bisnis kuliner, fashion , edukasi, atau usaha lainnya?
Nah, pastinya kamu wajib membuat perencanaan yang maksimal supaya bisa menarik pelanggan dan produk atau jasa yang ditawarkan bisa laku keras. Karena itu, kamu wajib mengenal dan membuat business model canvas sebelum membuka usaha. Pembuatan business model canvas ini bisa membantu mengatur dan merencanakan usaha kamu, bahkan dari dasarnya.
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Sehingga bisnis kamu bisa sukses dan cepat berkembang. Mau tahu apa yang dimaksud dengan business model canvas dan elemen-elemennya? Yuk, kita simak dan pelajari berikut ini!
Pengertian Business Model Canvas (BMC)
Kamu sudah pernah mendengar tentang rencana bisnis yang satu ini belum? Business Model Canvas atau yang biasa disingkat BMC adalah sebuah strategi dalam manajemen yang berupa visual chart yang terdiri dari 9 elemen untuk membantu perencanaan bisnis sebelum dibentuk.
Model bisnis ini pertama kali diperkenalkan oleh Alexander Osterwalder dalam bukunya yang berjudul Business Model Generation . Dalam buku tersebut, Alexander mencoba menjelaskan sebuah framework sederhana untuk mempresentasikan elemen-elemen penting yang terdapat dalam sebuah model bisnis.
Tapi, kalau dilihat sepintas, sebenarnya alur model dari BMC ini sangat sederhana dan mudah kamu buat lho . Karena, secara garis besar, alurnya mengalir dari satu elemen bisnis menuju elemen penting berikutnya.
BMC Penting untuk Perusahaan
Nah, kenapa BMC ini sangat penting sebelum memulai bisnis? Karena dengan kesembilan elemennya, sebenarnya kita sudah bisa memvalidasi apakah satu ide bisnis itu potensial atau tidak. Karena itu, membuat bisnis model canvas adalah hal paling awal yang biasanya dibutuhkan seorang pengusaha pemula atau pengusaha yang mau membuat suatu usaha baru.
Pasti pertanyaan selanjutnya yang kamu ingin tahu yaitu apa saja kesembilan elemen ini dan bagaimana cara membuat sebuah BMC yang baik, kan ? Tenang, karena kita akan bahas semuanya disini!
Setelah mengetahui apa itu business model canvas dan isi dari 9 elemennya, tentu business model canvas ini dibuat bukanlah tanpa manfaat didalamnya. Adapun manfaat dari business model canvas yaitu:
Mempersingkat Waktu Penulisan Perencanaan
Jika menggunakan metode konvensional, maka pelaku usaha tentu harus menuliskan panjang lebar terkait perencanaan bisnis yang akan dibuat. Akan tetapi, dengan BMC maka perusahan hanya perlu mengisi poin-poin perencanaan bisnis sesuai dengan blok yang telah ditetapkan tanpa perlu menulis panjang lebar. Penentuan poin-poin penting ni semakin terarah dengan adanya blok yang telah disediakan.
Meningkatkan Fokus Perusahaan
Business model canvas dapat meningkatkan fokus perusahaan terhadap poin penting dari perencanaan penting yang telah dibuat. Dalam hal ini perusahaan perlu fokus pada elemen yang paling penting terlebih dahulu yang dinilai memberikan dampak besar dan mendorong pertumbuhan perusahaan. Intinya, BMC dapat membantu pemahaman dan dapat melihat gambaran keseluruhan bisnis sehingga dapat terlihat kekuatan dan kelemahan tergantung pada inputnya. Hal tersebut akan membangun model bisnis sedemikian rupa sehingga keseluruhannya terdiri dari dan lebih besar dari jumlah bagian yang ada.
Perlu diketahui dengan menggunakan business modle canvas maka pelaku bisnis tidak perlu membuat perencanaan bisnis yang sangat panjang dan menghabiskan banyak waktu. Business model camvas dapat dijadikan brainstorming saat meeting dengan seluruh karyawan. Bagian penitngnya business model canvas dapat mempercepat proses meeting dan membuat diskusi menjadi lebih terstruktur agar tidak melenceng ke pembahasan yang lain.
Business model canvas dapat mengurangi risiko dari kekeliruan dalam eksekusi bisnis. Jadi, secara tidak langsung BMC ini dapat dijadikan dokumen blueprint perencanaan bisnis untuk suatu perusahaan. Sebagai contoh ketika ada pelaku bisnis yang sedang melakukan eksekusi bisnis maka mereka dapat menjadikan BMC sebagai panduan perusahaan untuk menjalani eksekusi bisnis berdasarkan poin yang telah dirancang sebelumnya. Dengan demikian perusahaan dapat mengurangi risiko kekeliruan dalam eksekusi bisnis.
Tujuan Business Model Canvas
Pembuatan business model canvas bertujuan dalam membantu perusahaan guna merancang perencanaan bisnisnya serta menetapkan dan memvalidasi berbagai poin penting dalam bisnis seperti sumber daya yang ada,aktivitas, hubungan yang hendak dijalani dengan pihak-pihak terkait, mengenai pendapatan serta pengeluaran yang harus dikeluarkan.
9 Elemen Business Model Canvas
Ini dia kesembilan elemen yang terdapat dalam business model canvas yang wajib kamu ketahui dan pahami saat melakukan perencanaan bisnis:
Elemen pertama yang harus kamu miliki dalam memulai business model canvas ini adalah menentukan segmen pelanggan mana yang akan menjadi target bisnis kamu.
Misalnya, ada 2 stasiun televisi yang menyajikan 2 acara berbeda untuk memenuhi segmen pelanggan yang berbeda, warung makan dengan makanan sehari-hari untuk mahasiswa dan karyawan, atau untuk e-commerce yang berkembang sekarang ini. C ustomer segments mencakup si penjual barang dan pembeli sesuai dengan kebutuhan.
Elemen ini merupakan penjelasan dan rincian dari keunggulan produk, dan apa saja sebenarnya poin-poin yang bisa mendatangkan manfaat yang ditawarkan perusahaan bagi target pelanggannya. Hal ini menjadi kesempatan bagi kamu untuk menjabarkan kekuatan dan keunggulan yang membedakan bisnis kamu dengan bisnis yang lain, atau keunikan usaha kamu.
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Melalui penggunaan channels atau alat pemasaran yang tepat, kamu baru bisa menyampaikan value propositions kepada customer segments . Jadi, kamu bisa mulai memikkirkan channels yang mau kamu gunakan dengan baik, karena penentuan channels adalah salah satu elemen penting bagi keberhasilan sebuah bisnis. Misalnya, kamu bisa memasarkan bisnis kamu lewat media sosial, brosur, website , dan lain-lainnya.
Revenue streams ini merupakan bagian yang paling vital, di mana perusahaan atau usaha memperoleh pendapatan dari pelanggan. Elemen ini harus dikelola semaksimal mungkin untuk meningkatkan pendapatan bisnis. Jangan sampai ada bahan baku, produk, atau kinerja yang tidak dimanfaatkan secara maksimal ya untuk mendatangkan keuntungan yang besar.
Key resource atau sumber daya ini merupakan elemen dalam business model canvas yang berisikan daftar sumber daya yang sebaiknya direncanakan dan dimiliki perusahaan. Tujuannya untuk mewujudkan value proposition mereka.
Semua jenis sumber daya, mulai dari pengelolaan bahan baku, penataan sumber daya manusia, dan penataan proses operasional harus kamu perhatikan saat membuat model bisnis. Sebab, hal ini akan berdampak pada jangka panjang di bisnis kamu.
Pastinya pelanggan menjadi hal yang sangat krusial dalam sebuah bisnis, kan? Terutama pelanggan setia atau loyal. Nah, untuk terus mendapatkan pelanggan yang loyal, perusahaan harus menjalin ikatan dengan pelanggannya secara intens.
Perlu pengawasan yang ketat dan intensif supaya pelanggan tidak mudah berpaling ke bisnis yang lain hanya karena jalinan hubungan yang kurang baik. Pastikan pelanggan-pelanggan bisnismu mendapatkan pelayanan yang terbaik ya.
Kamu juga harus tahu bagaimana cara bisnis kamu bisa terus keep in touch dengan para pelanggan. Misalnya, kamu bisa mengirimkan newsletter, layanan after sales , dan sejenisnya untuk pelanggan kamu secara rutin.
Key activities ini merupakan semua aktivitas yang berhubungan dengan produktivitas bisnis, yang ada kaitannya juga dengan sebuah produk. Dimana kegiatan utamanya adalah menghasilkan proposisi nilai.
Jadi, pada dasarnya, elemen ini menjelaskan bagaimana kamu bisa menciptakan value preposition perusahaan dengan melakukan beberapa aktivitas. Supaya produk atau jasa kamu lebih dikenal dan diterima banyak orang.
Elemen ini berfungsi untuk pengorganisasian aliran suatu barang atau layanan lainnya. Posisi-posisi partner kunci tersebut bermanfaat untuk efisiensi dan efektivitas dari key activities yang telah dibuat.
Tidak ada salahnya menjalin hubungan baik untuk menciptakan siklus bisnis sesuai dengan ekspektasi, kan? Kamu bisa bekerjasama dengan beberapa perusahaan atau usaha lainnya untuk meningkatkan performa usaha kamu supaya lebih cepat meningkat.
Elemen terakhir yang juga tidak kalah pentingnya dengan kedelapan elemen lainnya yaitu struktur pembiayaan bisnis atau cost structure . Mengelola biaya secara efisien akan membuat bisnis yang dijalani menjadi lebih hemat dan bisa meminimalkan risiko kerugian. Hal ini juga bisa menentukan proposisi nilai yang tepat untuk pelanggan. Karena itu, pastikan kamu membuat laporan keuangan yang tepat dan sesuai untuk bisnis kamu.
Lean Business Model Canvas
Istilah lean startup merupakan sesuatu yang cukup popular beberapa tahun terakhir. Lean business ini pada dasarnya merupakan metode bisnis yang membawa pelaku usaha dari id eke bisnis secepat mungkin.
Dalam lean business, pelaku usaha akan mengeluarkan apa yang disebut dengan istilah minimum viable product (MPV) atau produk minimum yang layak. Artinya produk ini merupakan produk paling dasar tanpa tambahan bahan fitur apapun.
Sebagai pelaku usaha, Anda hanya perlu meletakkan produk tersebut ke sekelompok orang tertentu untuk melihat respon mereka apakah mereka menyukainya ataukah tidak. Jika mereka menyukainya maka Anda dapat melanjutkan dengan produk tersebut. Selanjutnya jika mereka tidak menyukainya maka Anda dapat mengubah atau langsung membuang ide tersebut.
Perlu diketahui bahwa model lean dapat memungkinkan Anda untuk mencapai pasar secepat dan semurah mungkin. Lean business model canvas ini dibuat dengan semangat lean business sehingga ini lebih dapat ditindaklanjuti dan berbasis kewirausahaan dan berfokus pada cara waktu yang dapat mempengaruhi aliran pendapat bisnis. Namun, saat lean business model canvas dibuat maka ada empat elemen yang wajib ditambahkan diantaranya seperti berikut ini:
Masalah dibuat karena banyak pelaku bisnis yang menghabiskan banyak waku dan uangnya untuk produk yang tidak mereka perlukan sehingga hal ini tidak dapat menyelesaikan masalah. Untuk itu, penting bagi pelaku usaha untuk mengetahui masalah apa yang akan dipecahkan sebelum melakukan hal lainnya.
Setelah mengetahui masalah apa yang sedang dipecahkan maka selanjutnya adalah memikirkan solusinya. Disini pelaku usaha haruslah mendeskripsikan minimum viable product (MPV) atau produk minimum yang layak.
Selanjutnya adalah metrik utama, metrik utama merupakan sebuah rangkaian produk atau layanan yang ingin disediakan. Metrik utama merupakan kunci untuk memilih metric yang tepat karena jika pelaku usaha salah memilih metric maka hal ini akan menyebabkan bencana pada bisnis yang sedang direncanakan.
Kelebihan Pelaku Usaha
Setelah masalah, solusi dan metrik selanjutnya pelaku usaha pastikan memiliki hal yang mungkin dimiliki yang lebih baik daripada pesaing Anda. Penting juga bagi pelaku usaha untuk mengetahui apakah memiliki suatu keunggulan diatas pesaing ataukah tidak. Dan apakah pesaing memiliki keunggulan diatas Anda sebagai pelaku usaha ataukah tidak.
Agar benar-benar menjadi canvas “lean” dalam sebuah perencanaan bisnis, pelaku usaha harus menghapus beberapa elemen yang mungkin saja dinilai tidak terlalu penting. Namun hal ini hanya berlaku tergantung dari jenis bisnis yang dijalankan, umumnya seperti:
- Kegiatan usaha
- Sumber daya
- Kemitraan utama
- Hubungan konsumen
Beberapa point diatas dikeluarkan karena dinilai hanya membuang-buang waktu untuk stratup yang rampin atau lean. Mencakup dari elemen lain, elemen untuk ini hanya fokus pada bagian luas dan tidak langsung fokus pada bisnisnya.
Alasan Business Model Canvas Penting Untuk Perencanaan Bisnis
Berdasarkan penjelasan diatas dapat diketahui bahwa business model canvas sangat penting digunakan perusahaan untuk merancang sebuah bisnis. Berikut merupakan alasan mengapa business model canvas penting untuk perencanaan bisnis:
Memperjelas fokus bisnis
Seperti yang telah dijelaskan sebelumnya dengan adanya business modle canvas maka hal ini dapat membantu pelaku bisnis membuat rancangan bisnisnya dan memperjelas fokus bisnisnya.
Meski terdengar spele, namun siapa sangka business model canvas membantu pelaku usaha menyortir jenis bisnis dan mengetahui kemaan arah bisnis akan berjalan sehingga bisa dinilai bahwa business modle canvas berisi patokan tentang perencanaan bisnis yang bisa dikembangkan saat bisnis mulai berjalan. Semua sudah tertuang secara akurat di business model canvas Anda.
Sesuai target pasar
Kegagalan bisnis baru biasa disebabkan karena produk mereka kurang tepat di pasaran. Hal ini terjadi karena produk yang diciptakan tidak sesuai dengan kebutuhan pasar atau salah memilih target pasar. Namun dengan business model canvas maka pelaku bisnis terbantu dalam memvisualisasikan produk sehingga dapat memperhitungkan target yang tepat.
Risiko gagal yang kecil
Meski terdengar spele, namun business model canvas dapat meminimalisir risiko kegagalan mulai dari membantu menyusun perencanaan bisnis, sumber pendanaa, bagaimana membuat produk, dan bagaimana menjualnya ke target pasar.
Teruji oleh banyak bisnis
Business model canvas sudah teruji kebenaran dan keakuratannya. Tidak hanya pada bisnis yang baru berjalan bahkan yang sudah berjalan juga dapat terbantu oleh business model canvas ini. Business model canvas menjadi solusi strategi perencanaan dan pengembangan bisnis yang tepat.
Bagaimana? apakah kamu siap untuk membuka bisnismu dengan perencanaan matang menggunakan business model canvas ini? Dengan menggunakan business model canvas ini semua proses dan perencanaan bisnis kamu bisa lebih teratur dan bisa dijalankan dengan baik.
Nah, untuk semua laporan keuangan atau cost structure bisnis kamu, serahkan saja semuanya ke JojoExpense dari Jojonomic! Laporan keuangan kamu pasti akan lebih jelas dan akurat, apalagi dengan sistem otomatisnya yang bisa kami pantau dari gadget kamu setiap saat. Sehingga bisa meningkatkan produktivitas perusahaan atau bisnis kamu. Pastinya juga hemat waktu dan biaya! Yuk, coba aplikasinya sekarang jangan sampai ketinggalan!
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Juli 25, 2021
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5 Alasan Kenapa Business Model Canvas Penting untuk Perencanaan Bisnis
Business Model Canvas atau bisa disebut kanvas model bisnis merupakan bagian penting dalam perencanaan bisnis. Setiap bentuk bisnis yang akan dibangun sebaiknya dilengkapi dengan perencanaan tentang bisnis itu sendiri agar perkembangan bisnis lebih jelas.
Sebuah bisnis dengan perencanaan yang tepat akan lebih memungkinkan untuk sukses dibanding bisnis tanpa perencanaan. Perencanaan bisnis yang tepat bisa dilakukan dengan model bisnis kanvas.
Pengertian B usiness Model Canvas adalah perencanaan strategi yang digunakan oleh pemilik bisnis untuk merancang model bisnis dan rancangan pendukung lain seputar bisnis.
Model bisnis ini membantu pemilik bisnis melihat peluang lebih jelas dan melakukan riset pasar agar bisnis bisa berjalan lebih baik.
5 Alasan Business Model Canvas sangat Penting
Dari pengertiannya, bisa diketahui bahwa Business Model Canvas adalah bagian yang penting untuk merancang sebuah bisnis.
Bahkan untuk menemukan bisnis model yang tepat, seorang pemilik bisnis dianjurkan untuk membuat rancangan bisnis yang bisa dilakukan dengan membuat Business Model Canvas .
Berikut adalah 5 alasan kenapa Business Model Canvas sangat penting untuk merancang sebuah bisnis:
Memperjelas Fokus Bisnis
Adanya Business Model Canvas tidak hanya membantu pemilik bisnis untuk membuat rancangan bisnis, tetapi juga memperjelas fokus bisnis.
Banyak bisnis membutuhkan cara untuk mencapai pelanggan mereka. Jika langkah yang diambil salah, maka bisnis bisa gagal.
Dengan adanya model bisnis ini, cara untuk meraih pelanggan akan lebih jelas dan lebih terfokus.
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Business Model Canvas Akurat
Meskipun terdengar sepele, Business Model Canvas bisa membantu pemilik usaha untuk menyortir jenis bisnis dan kemana arah bisnis akan berjalan.
Model bisnis kanvas berisi patokan tentang bisnis Anda yang nantinya bisa Anda kembangkan saat bisnis mulai berjalan.
Jadi Anda tidak perlu berpikir terlalu jauh untuk bisnis Anda karena perencanaan dan patokan sudah tertuang di dalam model bisnis tersebut.
Ini akan meminimalisir hal-hal yang tidak diperlukan ketika Anda mulai membangun bisnis sehingga Anda bisa lebih fokus memperlancar bisnis.
Sasaran Pasar Sesuai Target
Salah satu penyebab banyak bisnis baru yang mengalami kegagalan adalah karena produk mereka kurang tepat di pasaran.
Hal ini bisa terjadi karena produk yang dibuat tidak sesuai dengan kebutuhan pasar atau tidak memiliki target pasar yang tepat.
Dengan model bisnis ini, Anda akan terbantu untuk memvisualisasi produk Anda sehingga Anda bisa memperhitungkan dengan tepat apa produk yang benar-benar dibutuhkan oleh pasar dan siapa yang sangat membutuhkan produk Anda.
Model bisnis ini juga akan membantu Anda mencari cara untuk menjual produk Anda dengan cara yang sesuai dengan target pasar.
Risiko Bisnis Gagal Lebih Kecil
Business Model Canvas membantu Anda menyusun perencanaan bisnis mulai dari sumber pendanaan bisnis , bagaimana Anda membuat produk, hingga bagaimana cara menjual produk Anda ke target pasar.
Bahkan di dalam model bisnis ini Anda juga bisa menuangkan keunggulan produk Anda dibanding kompetitor, sehingga peluang sukses bisnis Ada lebih besar dan resiko gagal akan lebih kecil.
Sudah Teruji oleh Banyak Bisnis
Model bisnis ini sudah teruji secara metodologi di banyak bisnis. Tidak hanya bisnis yang baru berjalan, tetapi juga bisnis yang besar.
Penggunaan Business Model Canvas sebagai strategi perencanaan dan pengembangan bisnis sudah dilakukan beberapa perusahaan besar.
Perubahan yang terjadi pada perusahaan dengan model bisnis ini tidak hanya dari segi produk, tetapi juga dari sisi pendekatan kepada target pasar.
Dalam beberapa kasus, model bisnis ini juga mencakup strategi perencanaan keuangan.
Dengan memiliki strategi keuangan yang tepat, bisnis Anda niscaya akan berkembang secara berkelanjutan. Syaratnya, pengelolaan keuangan dijalankan sesuai strategi perencanaan itu sendiri.
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Abdul aziz umumkan apbd dki 2024 81,71 triliun, muhagumi: perjalanan inspiratif dari sales handphone hingga menjadi co host celebrity terkemuka, outbound dengan pesona alam yang indah di tsot, ppsdm migas sosialisasikan pengendalian gratifikasi, whistle blowing system dan benturan kepentingan untuk pegawainya, apa itu business model canvas dan apa keunggulannya.
JURNALPOST – Business model canvas termasuk alat yang direkomendasikan untuk membuat pemodelan bisnis yang terstruktur dan sistematis dengan mencakup aspek pengembangan dan pengelolaan. Tapi yang menjadi pertanyaan dasar, apa itu business model canvas?
Business model canvas (BMC) merupakan alat yang berguna untuk memvisualisasi semua aspek yang diperlukan untuk mengembangkan roadmap bisnis, termasuk konsumen, alur ke market, juga terkait rencana keuangan. Metode ini dikembangkan oleh Alexander Osterwalder.
Apa Itu Business Model Canvas?
Business model canvas merupakan representasi visual dari model bisnis yang akan diterapkan. Bentuknya berupa lembaran kertas yang berisi detil penjelasan strategi yang diperlukan bisnis supaya meraih sukses di market.
Metode ini akan memaksa pebisnis untuk menuangkan ide bisnis dalam secarik kertas sehingga bisa memvisualisasi bisnis, mendeteksi kelemahan, dan menguji strategi. Dengan memahami apa itu business model canvas, bisnis akan lebih sesuai dengan ekspektasi konsumen.
Bagian kanan dari BMC lebih berfokus pada kondisi eksternal, dalam ini konsumen. Sedang di bagian kiri, BMC lebih fokus pada situasi internal seperti bisnis serta produknya. Aspek internal eksternal bertemu di bagian value proposition sehingga memunculkan keseimbangan antara tuntutan dan harapan.
Komponen Business Model Canvas
Satu lembar business model canvas berisi sembilan kotak yang harus diisi, dan harus direvisi secara reguler guna memastikan model bisnis sesuai situasi yang berjalan. Tiap kotak mewakili komponen tertentu yang harus bisa dijawab.
#1. Customer segment • Segmen seperti apa yang dipilih? • Siapa konsumen terpenting untuk bisnis?
#2. Value proposition • Nilai seperti apa yang ingin disampaikan ke konsumen? • Konsumen seperti apa yang ingin dipuaskan?
#3. Distribution channel • Dari channel seperti apa konsumen ingin dijangkau? • Channel seperti apa yang bagus dan berapa biayanya? • Bagaimana integrasi channel tersebut ke bisnis dan konsumen?
#4. Customer relationship • Relasi seperti apa yang diinginkan konsumen terhadap suatu produk? • Bagaimana mengintegrasikan relasi tersebut ke dalam aspek harga dan format bisnis?
#5. Revenue stream • Untuk nilai seperti apa yang diharapkan konsumen sehingga mau membeli produk? • Apa dan bagaimana mereka membayar produk atau jasa? • Berapa besar prosentase keuntungan tiap produk berkontribusi pada profit keseluruhan?
#6. Key resource • Apa sumber kunci yang diperlukan value proposition? • Apa saja sumber daya yang penting untuk mendukung distribusi, relasi, profit, dan lainnya?
#7. Key activities • Apa saja aktivitas kunci yang diperlukan value proposition? • Apa aktivitas kunci untuk produk, konsumen, meraih profit, dan lainnya?
#8. Key partners • Siapakah kolega atau partner utama bisnis? • Apa yang motivasi di balik kerja sama tersebut?
#9. Cost structure • Aspek mana yang paling banyak memakai anggaran? • Aktivitas atau sumber daya apa yang paling mahal?
Keunggulan Business Model Canvas
Pertumbuhan usaha merupakan harapan terbesar tiap pebisnis, dan metode business model canvas bia mewujudkan harapan tersebut. Terdapat beberapa keunggulan business model canvas , antara lain seperti:
#1. Memberi tahu aspek terpenting Dengan BMC, pebisnis akan mendapat gambaran lebih lengkap tentang bisnis yang sedang dijalankan. Metode ini juga mampu menyorot aspek yang kurang penting sehingga bisa dihilangkan keberadaannya. BMC mampu mempertajam gambaran aspek yang penting untuk meningkatkan bisnis.
#2. Dasar pemikiran BMC merupakan alat yang sempurna untuk membebaskan pemikiran. Berbagai model bisnis alternatif bisa dicoba, bahkan sangat mungkin menemukan kombinasi ide dari penerapan BMC.
#3. Rencana terstruktur BMC mampu memberi ide bisnis baru dengan bentuk yang lebih terstruktur. Ini memberi keuntungan lebih karena bisa dicepat dipahami saat didiskusikan bersama. BMC menawarkan perspektif baru yang bisa dilihat dari berbagai sudut pandang.
#4. Mengedepankan kemandirian Dengan BMC, ide bisnis dapat divisualisasikan dengan jelas. Perusahaan juga bisa memanfaatkan BMC untuk membuat produk atau projek baru. BMC akan menunjukkan kemandirian dari kepentingan konflik karena memiliki gambaran jelas terkait persoalan dan solusi.
#5. Sistematis BMC tak akan bisa menggantikan ide rencana bisnis yang begitu mendetil, tapi jika menampilkan ide bisnis dengan BMC, pebisnis bisa mendapat gambaran sistematis tentang rencana bisnis. Terlebih saat ini sudah banyak template BMC yang sudah tersedia.
Dari semua penjelasan tentang apa itu business model canvas, metode ini patut dicoba karena mampu memberi pemahaman mendalam dan terstruktur tentang ide bisnis. Poin utamanya, BMC berperan layaknya pengingat apa yang penting dalam suatu bisnis.
- Model Canvas
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