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How to Buy Tecumseh Engine Parts Online

The Tecumseh company has been in business for more than 100 years, according to Tecumseh Engine Parts. That means there are lots of old Tecumseh engines out there, plus outdoor power equipment can take a lot of abuse even when newer. Get your Tecumseh model number ready for order parts.

The Tecumseh Website

The wholesale dealer locator on the Tecumseh website is a good starting point when you’re looking for somewhere to buy Tecumseh parts online. Consider using a Tecumseh parts diagram or your owner’s manual to determine which parts you need. Then, use the wholesaler locator tool on the Tecumseh website to find the closest place that sells it. You can either allow the website to use your location to find the nearest dealer or enter your address and ZIP code. This brings up a map with the nearest Tecumseh dealers pinned as well as a directory style listing at the side of the page. If you click on each dealer, the details note if the dealer has a website. Click on one that has a website and look for a shopping cart symbol to determine if that particular dealer Tecumseh sells parts online.

The Manufacturer of Your Outdoor Equipment

Various types of commercial and residential equipment are powered by Tecumseh engines. This includes things like lawn mowers, recreational vehicles, edgers, snow blowers, pumps and tillers. Some brands of generators, chippers, pressure washers, saugers and shredders are also powered Tecumseh engines. After using Tecumseh engine diagrams to determine the parts you need, consider visiting the manufacturer of your equipment to run a Tecumseh engine parts lookup through your manufacturer. Some manufacturers will offer replacement parts to keep your equipment in good repair as shown on the MTD Parts website.

Major Retailers That Offer Service

Some major retailers that offer after-sale service on outdoor equipment make parts available to customers, such as Sears Parts Direct. To use these sites, find the model number of your Tecumseh engine, then locate that number in the parts website. Using Sears as an example, you can then click the Shop Parts button, choose the type of engine parts you need by looking at the provided parts diagrams, then see what parts Sears offers for your particular engine.

Online Auction Sites

Online auction sites may provide a way to find used or lower-priced Tecumseh parts online. Search the auction site for the Tecumseh brand and the part name or number you need. Check the part’s condition, the seller ratings and shipping costs as well as the return policy before ordering so you can be sure you’re getting what you expect.

Major Online Retailers

Major retailers that sell various types of products rather than just a few things, such as Amazon and Walmart, may carry some parts for Tecumseh engines. To shorten the search time, search for parts using the part number when possible.

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What is Business Model Canvas?

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Do You Need a Business Model Canvas?

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What is a Business Model Canvas | Learn How to Create a Business Model Canvas 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.

Key Building Blocks of the Business Model Canvas

There are nine building blocks in the business model canvas and they are:

Customer Segments

Customer relationships, revenue streams, key activities, key resources, key partners, cost structure.

• Value Proposition

When filling out a Business Model Canvas, you will brainstorm and conduct research on each of these elements. The data you collect can be placed in each relevant section of the canvas. So have a business model canvas ready when you start the exercise.  

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).

Value Propositions

This is the building block that is at the heart of the business model canvas. And it represents your unique solution (product or service) for a problem faced by a customer segment, or that creates value for the customer segment.

A value proposition should be unique or should be different from that of your competitors. If you are offering a new product, it should be innovative and disruptive. And if you are offering a product that already exists in the market, it should stand out with new features and attributes.

Value propositions can be either quantitative (price and speed of service) or qualitative (customer experience or design).

What to Avoid When Creating a Business Model Canvas

One thing to remember when creating a business model canvas is that it is a concise and focused document. It is designed to capture key elements of a business model and, as such, should not include detailed information. Some of the items to avoid include,

• Detailed financial projections such as revenue forecasts, cost breakdowns, and financial ratios. Revenue streams and cost structure should be represented at a high level, providing an overview rather than detailed projections.
• Detailed operational processes such as standard operating procedures of a business. The BMC focuses on the strategic and conceptual aspects.
• Comprehensive marketing or sales strategies. The business model canvas does not provide space for comprehensive marketing or sales strategies. These should be included in marketing or sales plans, which allow you to expand into more details.
• Legal or regulatory details such as intellectual property, licensing agreements, or compliance requirements. As these require more detailed and specialized attention, they are better suited to be addressed in separate legal or regulatory documents.
• Long-term strategic goals or vision statements. While the canvas helps to align the business model with the overall strategy, it should focus on the immediate and tangible aspects.
• Irrelevant or unnecessary information that does not directly relate to the business model. Including extra or unnecessary information can clutter the BMC and make it less effective in communicating the core elements.

What Are Your Thoughts on the Business Model Canvas?

Once you have completed your business model canvas, you can share it with your organization and stakeholders and get their feedback as well. The business model canvas is a living document, therefore after completing it you need to revisit and ensure that it is relevant, updated and accurate.

What best practices do you follow when creating a business model canvas? Do share your tips with us in the comments section below.

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

FAQs About the Business Model Canvas

• Use clear and concise language
• Use visual-aids
• Customize for your audience
• Highlight key insights
• Be open to feedback and discussion

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

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

Written by Raquel Alberdi

Business | entrepreneurship, 9 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”.

-Reid Hoffman

After meeting with hundreds of entrepreneurs and business owners over the years I believe the LinkedIn co-founder and Blitzscaling author Reid Hoffman’s got it spot on.

People tend to focus on specific parts of their business, such as which software packages are being used, which is the cheapest supplier, how to optimize internal processes…?

They get so bogged down in the details of the day-to-day running that they lose the overall vision of their business.

Without this vision they are unable to scale, they make marginal profits, miss opportunities, struggle to innovate, and end up running “just another” business.

Another handy metaphor in understanding this common mistake is the soldier in the trenches .

Every meter of ground gained comes at a heavy cost, mistakes are made, and progress is hard-fought and slow…a day-to-day experience for 99% of entrepreneurs and businessmen.

But when you do have that 360 vision you see the entire battlefield. Decisions are much clearer, fewer mistakes are made, and progress is fast and methodical.

Fortunately, a business model framework exists that gives you both vision and clarity .

The Business Model Canvas provides entrepreneurs, business owners, and strategists with a tool to analyze, structure, and evolve a business while always keeping the bigger picture front of mind.

So let’s take a closer look at how it works.

Table of Content

What is the Business Model Canvas?

Created by Swiss entrepreneur and Strategyzer co-founder, Alexander Osterwalder, the Business Model Canvas is a visual representation of the 9 key building blocks that form the foundations of every successful business. It’s a blueprint to help entrepreneurs invent, design, and build models with a more systematic approach.

Why is it so popular within the business community?

Its simplicity. The business model canvas allows us to carry out a high-level analysis without drilling down and getting lost in the details. You just draw out the 9 building blocks on a blank canvas, fill them in as each concept relates to your business, and hang it somewhere everybody can see.

It’s a visual overview of your entire business on a single canvas.

While the Business Model Canvas is an extremely fluid concept and hyper-specific to individual companies, each canvas is still broken down into these 9 key building blocks:

Customer Segments

Value propositions, customer relationships, revenue streams, key resources, key activities, key partners.

When laid out on the canvas the model will look something like this:

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:

Fast fashion

Zara adds new clothes and designs to its collections every 2-3 weeks, both in its stores and online. It keeps the brand updated, fresh, and modern while maintaining its all-important medium price point

Great eCommerce experience

Once you enter Zara’s online store you’re presented with a clean, easy-to-navigate, and high-end feel. The customer segments are visible on the left navigation bar with a search tab to further aid customers with their online experience.

Localized stores

You can find a store in nearly all major retail locations (shopping malls, retail outlets, airports, etc.) meaning accessibility is not an issue for the majority of consumers.

Flagship stores

Zara demonstrates its aesthetic evolution to customers through its flagship stores. The recent opening of their Hudson Yards , New York City flagship is a great example of this. Customers shop around its vivid, minimalist layout offering them an experience aligned with the brand’s deeper, eco-friendly values.

Zara 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:

Customer segments

• Value propositions
• Revenue streams
• Distribution channels

Now it’s time to move over to the left side of the business canvas model and look at what we need, internally , to deliver our value propositions.

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:

• Manufacturing
• Retail process (point of sale and 3rd party management)
• Distribution channel / logistics

Design is a key activity as Zara’s value proposition is to provide stylish garments at an affordable price. Their collections need to be constantly updated to follow the latest fashion trends at the time.

To produce their collections Zara will also require manufacturing capabilities. Now Zara doesn’t own their own factories (we will get to that in the Key Partners section) but they still need to be involved in the garment manufacturing process.

Everything from fabric selection to pattern making, to detailing and dyeing affects the outcome of the final product which of course they have to then go on and sell.

The effective management of the retail and distribution channels (online, offline, shipping, and communication with providers) is also key. A breakdown in either of these activities, such as a poor relationship with an important provider will have serious consequences for the business.

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.

Value Proposition

Whether on the train to work, sitting in the car (if you’re not driving!), or relaxing at home in front of the TV, you can consume their online, on-demand video streaming service.

They also have a huge library of content for consumers to choose from, ensuring that people keep coming back, as well as increasing their mass-market appeal.

They also produce high-quality, original content to differentiate themselves from their competitors.

Most people access Netflix either through their website or mobile/TV App . Another popular channel that you may have picked up on is their affiliate partners .

You’ve perhaps signed up for a mobile, TV, and internet package where the provider offers Netflix as an extra to sweeten the deal, so to speak.

That would be an example of an affiliate partnership between Netflix and mobile service providers.

I doubt many consumers have had direct contact with Netflix unless it’s to resolve a subscription issue or general query. It’s very much a self-automated service – you download the app, select the program you wish to watch, and hit play.

Very simple, very effective.

Again, this doesn’t need much embellishment. Netflix generates money from the different tiers and packages put together in their subscription services.

This varies depending on the region to account for local markets, but on the whole, it’s sold at a low price point.

Originally, Netflix’s Key Resources would have been their unrivaled DVD collection combined with a cost-effective mail-order system.

Nowadays it’s undoubtedly the rights to stream online video content. Netflix has brokered deals with some of the biggest production studios worldwide.

Combined with their huge library of in-house productions , it’s more than enough to encourage customers to renew their subscriptions.

To help sustain interest in their product, Netflix understands they need to serve-up relevant content for each sub-sector of their mass audience. Therefore their machine learning algorithm selects content for consumers based on streaming habits (what they watched, at what time, etc,.) to personalize the customer experience.

This explains why over 80% of all content streamed on Netflix was cherry-picked by this algorithm, making it a Key Resource for their business model.

Also, Netflix accounts for a whopping 12.6% of global bandwidth usage . The literal capacity to stream their services must be met meaning bandwidth must also be included here.

Content procurement is arguably their biggest Key Activity. They need to find people to produce and deliver their original content, including actors, studios, writers, etc. as well as secure the licensing and streaming rights from 3rd party producers such as Sony, Warner Bros, and Disney.

Finally, they need a fast, easy-to-use application to host their online streaming service. This needs to be available for both TV and mobile devices if they are to deliver their “on-demand” value proposition.

K ey Partners

Seeing as Netflix’s entire business model is largely based around streaming 3rd party content, key partnerships need to be built with production studios . No content, no Netflix!

Also, as we touched upon earlier Netflix is one of the largest consumers of bandwidth worldwide. If the speed and delivery of their streaming service are to be continued then deals will also need to be made with internet service providers (ISPs).

Netflix’s biggest expenditures come from both their in-house content procurement and 3rd party licensing agreements . The high-quality standard of video streamed on Netflix is only possible due to the speed and performance of its online platform and application , which has additional costs of staff, software, etc.

To show you just how flexible the business model canvas can be, I wanted to throw in a slightly leftfield example. Vintae is a Spanish wine producer who, after a detailed analysis of the business model canvas, was able to innovate and disrupt one of the world’s most competitive industries.

As some of you may know, the wine industry is extremely competitive. It’s also steeped in history and tradition , making it very challenging for newcomers to grab market share, let alone think about year-on-year growth and revenue.

However, CEO “Richi” Arambarri looked at the traditional “ bodega ” business model and saw a chink in its armor.

A “small” innovation in the business canvas model helped them to become one of the region’s most important winery groups, with over 10 installations and a presence across all regional denominations (Rioja, Priorat, Rias Baixas, etc.) with year on year growth of 30% – practically unheard of in such a competitive industry.

So how did Vintae analyze the business model canvas to find a niche in their market?

To answer that question, we must first look at the traditional winery business model .

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.

Strategyzer

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.

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Perfect thought

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

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• ERP Services

The canvas method was first introduced by Alexander Osterwalder.  It can encourage as many employees as possible to be involved in developing the business model of his organization. The business model canvas has a big role for all entrepreneurs. For instance, as being more structured with one another, accelerating business design, and making it easier to determine future business strategies.

Starting a business is a challenging task. In addition to having capital, you also have to be good at planning, managing, and also developing the business. To easily simplify your entire business operational process, from E-Procurement to Meeting Management you can try using Hash Core ERP software . 

Also read: The Easy Guide to the Business Model Canvas

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Table of Content

The purpose of creating a business model canvas, 9 important elements of a business model canvas.

• Customer segment
• Value Proposition
• Revenue streams
• Key Resources
• Customer Relationship
• Key Activities
• Key Partnership
• Cost Structure
• Conclusion on Fixed Asset

BMC itself has helped many entrepreneurs from beginners to successful entrepreneurs. This element also helps businesses to validate the components of the field they are engaged in. Of course, Alexander has strong reasons why he created a business model canvas, such as:

• Improve Company Focus and Performance

 In the BMC itself, it is written that BMC can increase the company’s focus and of course be an impact and encourage the company to be better. This happens because the business model canvas itself has summarized the business.

• Can Know the Value of Proportion

The value of the proportion has the meaning of the placement between consumers and existing products in a business. By applying this method, you can find out the value of the proportion.

1. Customer segment

The first element of BMC is the customer segment. This is about who the target market of the product you are going to sell is. The purpose of the existence of customer segmentation is to create a marketing method that is much more targeted and on target. Thus, companies do not need to waste advertising or promotion costs.

For example, you are running a food and beverages business and food is one of the basic human needs that must be met. For this reason, the f&b business market is very wide open so that marketing can be maximized so that it can attract more customers.

2. Value Proposition

Starting a business / business, you must find out whether the product or service you offer can be useful for society or not. This happens because a product or service must have value so that you can find out the benefits that consumers get when using your business.

In the second element of BMC, there is a value proposition, there must be a balance between the product and the target market. If this has been established, then there will be a balance in the business.

If you pay close attention, the value proposition has 2 diagrams. Pie charts and squares, each of which has a specific purpose. In the pie chart, there are customer jobs, pain, and gain. Customer jobs consist of problems and desires that consumers want.

Pain discusses the perceptions obtained from customers in negative elements so that we have to return to the first point, namely Customer jobs to better understand the types of customers. Gain, discusses the positive perception of customers. In a sense, customers are satisfied with the products or services you offer.

In the box diagram, it is divided into 3 parts, namely, products and services, pain relievers, and gain creators. Products and services focus on what is offered to customers and doing good service. The pain reliever is responsible for presenting the negative view of consumers to the product, and the gain creator is the extra value that is in the product which will later be conveyed to consumers.

3. Channels

The 3rd element in BMC is channels. In this section, the value proposition that we have set can reach the market. In these channels, you must focus on how the products you offer can reach the “community”, you must have a strategy to introduce these products to the public, both through offline and online media. Channel selection should not be arbitrary, but must be appropriate in order to reach the target market.

4. Revenue streams

 Revenue stream is a stream of income from the business or business that you run, which is related to where the funds come from such as production sales, investments, asset sales and so on in order to get sustainable funds.

5. Key Resources

Key resources are aspects of BMC that companies should have to create value for customers, so there are several things that must be considered, such as:

• Physical assets: Factory facilities, buildings, vehicles, machinery.
• Intellectual property rights: Trademarks, patents, copyrights, customer databases and partnership databases, company confidential information
• Human: Labor
• Financial: The company’s financial resources cash, credit, bonds, stocks

6. Customer Relationship

Loyal customers are the most crucial thing in a business so you must establish good relationships with customers. It requires close and intensive supervision to communicate with customers. Like, asking customers back about the product itself. In addition, you also have to build good relationships, because loyal customers are the most crucial thing in the business world. Get every conversation with each prospect logged to help sales reps understand leads better and to optimize your customer service with using CRM-Leads software

7. Key Activities

In this 7th element, you have to focus on the business you are running, focus on your strategy, how do you get suppliers, how do you promote your business to increase branding in your business. In fact, Key activities themselves are closely related to the activities carried out by the company from the beginning of the process of forming goods to research and development of new products.

8. Key Partnership

This element of BMC relates to the parties you can collaborate with with the aim of supporting and optimizing the allocation of resources, reducing competitive risk and uncertainty, and improving performance. A good key partnership will form a more stable business cycle.

9. Cost Structure

The last element you should pay attention to is the financial structure. What is the process of going in and out of costs for your business to run. You can manage costs efficiently in order to minimize expenses.

Of course, your income and expenses must match so as not to lose. So that with the cost structure, your financial statements are stable and clear. This element is related to the Key Resource element.

In the key resource element, you must ensure that the company has the best Human Resources or employees who can develop over time. The reason is because employees are one of the company’s assets that affect the development of a business.

The business model canvas is a great tool to help you understand a business model in a straightforward, structured way. Using this canvas will lead to insights about the customers you serve. What value propositions are offered through what channels, and how your company makes money . The production process is also more directed, flows neatly, and will certainly produce products in the form of goods and services of higher quality. 

The application of BMC will make it easier for entrepreneurs to manage their business. however, it will be difficult without well-managed data. Therefore, HashMicro ERP Software can help businesses to manage data equipped with Business Intelligence features that accelerate decision making, explain a concept and method for improving the quality of business decision making based on data-based systems.

Also read: How To: Business Model Canvas Explained

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Understanding Business Model Canvas (BMC) and Its 9 Elements

Running a business requires careful consideration. It demands a well-thought-out strategy to ensure effective operations, efficiency, and profitability. Therefore, thorough planning is crucial, and one useful tool for this purpose is the business model.

One widely utilized business model is the Business Model Canvas (BMC). The BMC finds extensive application among companies, including large enterprises as well as newly emerging companies and startups. To gain a better understanding of the Business Model Canvas (BMC) and its significance, refer to the explanation below.

Also read : B2B Model Business: How It Works, and The Examples

What is the Business Model Canvas (BMC)?

What is Business model canvas? (source:pexels)

The Business Model Canvas (BMC) is a visual management tool used to articulate and depict business ideas and concepts. It provides a structured framework for designing a business model in a visual format, making it easily comprehensible and accessible. The BMC is represented as a chart or diagram, enabling a clear and concise representation of the key elements of a business model.

Functions of Business Model Canvas

The Business Model Canvas offers several advantages and functions that make it a preferred choice for businesses. By utilizing this model, companies can achieve enhanced effectiveness and efficiency, as it provides a clear and concise overview of the business.

Unlike traditional business plans that can span multiple pages, the Business Model Canvas is designed to fit on a single page, making it easier to understand and communicate company ideas. This concise format allows for a more streamlined and focused presentation of the key components of the business model.

Consequently, stakeholders and team members can grasp the essence of the business quickly and engage in meaningful discussions and decision-making processes.

The visual nature of the Business Model Canvas also facilitates better comprehension, as it presents business concepts and ideas in a graphical form that is easy to digest.

Overall, the Business Model Canvas provides a practical and approachable framework for businesses to articulate their concepts and strategies, allowing them to effectively communicate their vision and drive success.

Also read: What is a B2C Business Model: The Characteristics and Examples

9 Elements of Business Model Canvas You Need to Consider

There are a minimum of nine elements of the business model canvas that must be considered during its implementation. The explanation is given below:

1. Customer Segments

The first element involves identifying and understanding the target market or market segment for your business. It is crucial to recognize the potential customer base and focus on expanding your business within that segment.

2. Value Proposition

Once the target market is determined, it is essential to understand how your product or business can provide value and benefits to customers. This involves identifying and communicating the unique advantages and benefits of your offerings.

3. Channels

The channels element focuses on determining the appropriate marketing and distribution channels to reach your target customers. This can include websites, online marketplaces, social media advertising, or other mediums to connect with customers effectively.

4. Revenue Streams

Managing and maximizing revenue streams is a vital element of the business model. This includes identifying and optimizing various sources of income and ensuring they contribute to the overall financial success of the business.

Also read: 7 Tips on Writing A Good Startup Business Plan

5. Key Resources

Key resources encompass the essential assets and resources required to operate your business successfully. These resources can include physical assets (such as machinery or buildings), intellectual property (such as brands or copyrights), human resources, and financial resources.

6. Customer Relationship

Establishing and maintaining effective customer relationships is crucial for customer satisfaction and retention. This element focuses on how you communicate and engage with customers to keep them interested and prevent them from switching to competitors.

7. Key Activities

Key activities encompass all the significant tasks and actions within your business that create value and contribute to its success. This includes activities related to production, marketing, distribution, customer service, and other essential functions.

8. Key Partnership

Key partnerships involve identifying and establishing strategic collaborations or alliances with external parties. This can include business partners, suppliers, or other organizations that provide the necessary resources or expertise to support your business operations.

9. Cost Structure

The cost structure element involves analyzing and managing the costs associated with operating your business. This includes understanding the distribution and allocation of costs to ensure they align with your intended objectives and overall financial sustainability.

Also read: What Is a Business Proposal, The Definition, and Benefits

Example of Business Model Canvas Application

After understanding the meaning and components of the BMC above, here is an example of a business model canvas for a cake business that you can refer to.

Also read: 10 Successful Young Indonesian Entrepreneurs Starting a Business from Scratch

Tips on How to Create a Business Model Canvas

There are several tips for creating a business model canvas, including:

1. Analyze competitors

It is important to analyze your competitors’ businesses to identify opportunities for your own.

2. Determine the priority of the elements

Prioritize the nine elements of the business model canvas based on their importance to your business.

Also read : The Types of Business That You Should Know

3. Link business elements

Establish connections and linkages between different elements of your business model to ensure optimal functioning.

4. Assess the current condition

While planning for the future is crucial, it is equally important to focus on the current situation and adapt accordingly.

5. Conduct a review

Regularly review your business model canvas and the prepared components to identify any areas that can be improved or optimized.

That concludes the explanation of what the Business Model Canvas (BMC) is, along with the nine elements of the canvas that can help grow your business. Learn more about the details so that your business can run optimally.

More Reads:

9 Building Blocks of the Business Model Canvas

The 9 building blocks for any business model are as follows:, 1. customer segments, 2. value propositions, 3. channels, 4. customer relationships, 5. revenue streams, 6. key resources, 7. key activities, 8. key partnerships, 9. cost structure.

I am going to discuss each section of the business model to help you create more value not only for your business but for your customers.

The first building block of a business model is  customer segments.  This defines the different groups of people or organizations that a business plans to reach. Without profitable customers, how can any business succeed? When looking at customer segments, it is important to group people into multiple segments to better satisfy their needs. The groups could be small or large depending on their common needs, behaviors, location, or attributes. With these groups, you can better understand how to  communicate  properly with them and find out what works best for any demographic. Once you have a clear idea of who you are providing a service for, you can make the steps towards creating value for them.

The second building block is based on how your company bundles products and services to meet each customer segment’s needs. A  Value Proposition  creates a unique value for customers through a mix of elements that could be qualitative or quantitative. This could include price, speed, design, or customer experience.  What value do we deliver to the customer? What makes a person choose AT&T over Verizon Wireless or Sprint? Perhaps they decide to choose Virgin Mobile. Now, think about how each company offers value to its customer segments. Verizon might offer value to customers that are looking for the best cell service at an affordable price. They could also offer a great bundled deal with DISH network for a user that doesn’t want to pay two different bills. How about the customer that lives in the city with great coverage and is looking for the best price? That could be exactly what Virgin Mobile offers with a low cost and no contract involved. It is due to the value proposition that a person might want to choose one service over another. Don’t just try to offer what everyone else is with lower prices, think outside the box. It is often due to innovation  and  disruption that new businesses succeed. Think about how you can fill the gaps in customer needs and problems that other companies in your industry are not fulfilling.

The  channels  building block is how your company will communicate with each customer segment, delivering them your value proposition. These channels can include social media, websites, newspaper advertisements, and word of mouth to name a few. Evaluate how you communicate which each customer segment and how you can either improve or change that communication. Also, consider which methods of communication are the most cost-efficient. It is this sort of brainstorming that will improve how you reach each customer and build a relationship with them. To help with your brainstorming session, here are 5 channel phases to build upon:

1. Awareness

How do we raise company awareness and build upon our brand?

2. Evaluation

How do we reach customers to have them evaluate our value proposition?

3. Purchase

Through which channels can we direct customers to purchasing our products and services?

4. Delivery

How do we deliver the value proposition to the customers?

5. After Sales

How do we provide customer support after purchase?

This may seem like a standard set of phases for you.  Well, that is the point! These phases are in place to help build your thinking outwards towards all the possibilities to best serve your customer segments.

4. Customer Relations

I truly believe that this part of the business model is the most important. If you build personalization into your brand and company, then the sky is the limit! Although this service can be personal or automated, it is crucial to understand which method will best serve your customer’s needs. There are three driving motives for building relationships with your customers.

• New Lead Generation
• Customer Retention

With these motives, rank which goals are more important to your company than the others. From there, decide which issues you might come across with these goals and how to best communicate to your customer segments in each goal.

This building block measures the earnings a company generates from each customer segment. When targeting each customer segment, think about what each group is willing to pay. When you realize that different groups of customers are willing to pay at different levels, you can come up with different revenue streams to apply to each of these groups. A business model includes only two types of revenue streams:

• Transaction Revenues  – This results from customers who make one payment for a product or service.
• Recurring Revenues – These ongoing payments can include a prolonged value proposition or post-purchase customer service.

When deciding which type of revenue stream fits well in the communication with a customer segment, ask yourself: How are they currently paying? How would they prefer to pay? Does a certain method of revenue contribution to overall earnings?

What are the key resources that can set your business apart from the rest? What resources are key to offering your value proposition?  Key Resources  are the important assets that are available to you and are required to make your business plan a success. These resources allow you to create your unique value proposition, maintain important relationships with your customers, reach new markets, and create revenue. These resources can range from physical, financial, intellectual, or human assets.

The  key activities  building block describes the important process that a business must take part in for a business model to work. Much like key resources, these activities are required to maintain customer relationships, reach new markets, create value propositions, and earn revenues. Key activities can be grouped into three categories: 1. Production These key activities are the focus of manufacturing firms and relates to the designing, creating, and delivery of products. 2. Problem Solving These activities include knowledge management and training. Problem-solving is key to coming up with new solutions to customer problems.  3. Platform/Network  His category includes platform management, service positioning, and platform promotion. This is built around a company that relies on networks, software, and brands that can function as a platform.

The building block of key partnerships revolves around the network you build. This can include suppliers, partners, or even other businesses in your industry to create an alliance with. There are 4 main categories of partnerships:  1. Strategic Alliances with Non-competitors   2. Strategic Partnerships with Competitors   3. Joint Ventures to create new Businesses   4. Buyer-Supplier Relationships  With these 4 categories of partnerships, we find 3 main motives:  1. Optimization and Economies of Scale  This motive is based on reducing costs and can involve outsourcing or a sharing infrastructure. This optimizes the allocation of resources and activities so your company doesn’t rely on owning all the resources or performing every activity on its own.  2. Reduction of Risk and Uncertainty  This motive is brought on by competitors joining in strategic alliances in one area while remaining competitive in other areas.  3. Acquisition of Resources and Activities  It is rare for any business to have access to all the necessary resources and activities to create the most value to their customers. It is important to realize which assets are more cost-effective to outsource and to rely on other businesses to bring resources that you could not come up with on your own.

The cost structure building block describes all costs involved in operating a business model. When your business defines how to create value, maintain customer relationships, and generate income, it will see costs incurred on each of these levels. The cost structure of a business can be placed into one of two categories:

1. Cost-driven

This cost structure focuses on minimizing costs wherever possible. This process can include high automation, extensive outsourcing, low price Value Propositions, and the leanest possible cost structure.

2. Value-driven

With the value-driven cost structure, a business focuses on how the create the best value for each customer segment. This can include a highly-personalized service and exclusive services.

That concludes the 9 Building Blocks that go into a Business Model! These building blocks are put together to create a handy tool for your business known as the  Business Model Canvas. This model is meant to be a hands-on tool for your whole business team to add and take away items when needed. To print out a poster-sized canvas, please visit  www.businessmodelgeneration.com  I will leave you with three last instructions to help build your business model:

1. Print it out on a poster!

2. place the poster on the wall, 3. sketch out your business model.

**Affiliate Disclaimer** We may earn commissions on links – which help support our writing and does not cost you any extra when clicking through one of our links.

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