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How to Repair Canvas

If a tear or a rip happens to your canvas, whether a tote bag, a boat cover, awning or some other canvas item, you can fix it with just a few simple steps. Canvas repair is simple enough to tackle yourself.

Test the Canvas

Before you go to the trouble of canvas repair, check out the fabric to make sure it’s worth fixing. Sun and elements will take their toll on canvas fabric over time, and the material will fray, fade and become thin. Grasp the canvas tightly in both hands with your hands spaced about six inches apart and pull sharply. If the canvas tears easily, it’s best to replace it instead of repairing it.

Gather Materials

If you decide to repair the canvas, get a piece of matching canvas for a patch and a matching piece of backing fabric that won’t fray. You’ll also need heavy polyester thread for stitching, a sturdy needle for hand sewing and a roll of double-sided sticky tape to hold the patches in place while you sew.

Patching the Tear

Cut the piece of replacement canvas and backing fabrics so they are four inches wider and longer than the tear. Cut strips of the double-sided sticky tape to fit around the perimeter of both pieces of fabric, and affix the sticky tape strips to the undersides of both pieces. Position the canvas patch over the tear on the top side and the backing fabric patch under the tear on the under side, and press both pieces firmly into place.

Thread the needle with the polyester thread, pulling it to make a double strand for extra strength. Tie a knot in the ends of the thread. Stitch around the edge of the patch, making sure the thread goes through the top patch, the canvas and the backing patch. Take small and even stitches, positing them about one-eighth inch from the edge of the patch. When you reach your starting point, make a knot and clip off the excess thread.

No-Sew Fabric Repair

If your tear is only an inch or two in length, consider using an adhesive-backed patch instead of sewing on a patch. These patches are quick to apply, and they generally work well.

Clean the fabric well and allow it to dry if necessary. Most adhesive patches require that you prep the canvas with alcohol pad. Remove the adhesive backing and position the pad directly over the tear, making sure the patch extends out from the tear on all sides.

Liquid Adhesive

You might also try a liquid adhesive to repair canvas tears. Make sure the canvas is clean, and then position the canvas on a work surface so the tear is accessible. Place a sheet of paper under the canvas to protect your work surface. Position both sides of the fabric together, and apply the liquid adhesive along the tear to seal the two sides together. Allow the adhesive to dry according to manufacturer instructions.

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Using Business Model Canvas to Launch a Technology Startup or Improve Established Operating Model

What is a business model canvas, 1. conduct customer segmentation, 2. choose key partnerships, 3. sketch out key activities, 4. find relevant revenue streams, 5. describe your value propositions, 6. outline distribution channels, 7. identify key resources, 8. choose a customer relationships strategy, 9. classify cost structure, workshop materials, how to fill the business model canvas, a lemonade stand, the benefits of using the business model canvas, what the bmc excludes and why it should not bother you, lean canvas: a startup business model, how the business model canvas can help established businesses, what now life after the business model canvas, software to create a business model canvas.

Not that long ago, organizations had to rely on a number of established tools to build their business models, strategize, and innovate. The business plan use as we know it today started to decline in the 1980s and 1990s due to its complexity and time-consuming research process. This decline has – not surprisingly – been in step with the high-tech boom and Silicon Valley’s startup culture.

A business plan was integral to any organization that wanted to be associated with innovation. But what does it mean today? Despite – maybe due to? – their age and conventional status, business plans take time, effort, engagement of top consultancies, and financial resources to compile.

Today startups, especially of the tech variety, cannot afford such luxury. To keep up with competitors, grow rapidly, and innovate, they require a truly agile technique, a mind map of sorts that’s easy to write, edit, and comprehend.

Back in 2004, business theorist Alexander Osterwalder and his professor at the University of Lausanne Yves Pigneur suggested a business model design that could replace cumbersome business plans.

An approach that was soon named the Business Model Canvas (BMC) has since acquired a respectable number of loyal practitioners. Not only have startups employed the approach, but also such giants as Microsoft, SAP, and General Electric. Let’s find out what the Business Model Canvas is and explore the ways a software company can leverage this method to drive success.

BMC explained in less than 12 minutes

The Business Model Canvas is a visual template for identifying and organizing different elements of your business model. It’s divided the canvas into nine sections, each responsible for the most vital business elements of every organization.

• Customer Segments
• Key Partnerships
• Key Activities
• Revenue Streams
• Value Propositions
• Key Resources
• Customer Relationships
• Cost Structure

You can explore all the Canvas boxes in our online Business Model Canvas template . It’s free and easy to use. Remember to return to the article for a detailed explanation on using it.

Classic scheme of Business Model Canvas

With the abundance of methodologies for building a business model , there must be something really special about the Business Model Canvas that has earned it a place among the classic tools.

To start with a BMC, you will need : a small group of people, a board or a large sheet of paper, markers and sticky notes, and up to an hour of time. When you’ve gathered everything, it’s time to map out. Let’s get down in the weeds.

Your customers are going to dictate how your business operates every day. By knowing and understanding your customers, you’ll be able to define the core of your business – the Value Proposition.

If you are a software company, your customer segments can vary from private individuals to global organizations, and they all require different types of relationships, distribution channels, and payment options. Previously, we explained how to create a Buyer Persona for a SaaS business . In terms of BMC, the concept is similar.

Besides segmentation principles that we touched on in the article, there are some customer groups that should be considered for a software business:

Used apps and software. Technographic segmentation defines what devices, mobile apps, and desktop programs your customers most frequently use. That will let you know how clients with different devices experience your product and you’ll be able to tailor your content specifically to their needs. Since technology is now a massive driver of occupations and lifestyles, this is pivotal for understanding your target audience.

Top purchases . It’s no secret that half of freemium game revenue comes from 0.19 percent of mobile gamers . Despite the majority of users keeping up with their free plans, a freemium model still allows companies to drive revenue. Make sure you know the motivations of the people who are bringing you the biggest value but don’t overlook those who don’t spend a penny but watch your ads and contribute to the overall traffic.

Visitor tiers. Users behave differently depending on how many times they’ve already used your product. Just like with the device type, you can customize personal experience depending on whether they explore your product via guest mode or log in.

Let’s illustrate this and following sections using as an example  Venmo – a PayPal-owned service for bill-sharing and easy payments between friends that recently introduced an integration with Uber.

Venmo’s Customer Segments

This building block defines your network of partners and suppliers that make your business model work. Bear in mind that not all your partners are your Key Partners. There are four categories of partners you can identify.

Buyer-supplier is the most common type of business relationship that implies exchange of desired goods for both sides. It means a reliable source of supplies for you and a confirmed buyer of their products or your partners’.

Strategy alliances between non-competitors. The idea behind this partnership is to leverage each other’s resources. As a startup, you can collaborate with many different suppliers until you decide which ones support your business model best. When it comes to a mature business, you have a lot to risk and therefore need reliable and long-term relationships. This is exactly the type of partnerships Venmo makes. The tool provides integration with many eCommerce stores allowing users to make purchases with their Venmo account on a featured website such as Urban Outfitters, Uber, or GrubHub. In return, these websites can use Venmo as an additional payment method.

Venmo’s key partners

Joint-ventures are created when you need to fill the gap that only another business can fill, for instance, sell your product to a new niche. When you’re partnering with a company that has a missing element you require, it helps you grow your audience and increase sales. The affiliate plan we discussed earlier could be considered a joint-venture as well. Just like enhancing someone’s SaaS product with your API (or vice versa) or offering your customer upsells from a third-party.

Coopetition is a partnership between competitors. It usually happens when both companies are struggling to launch a product and want to spread the risks to achieve common revenue. For example, when Apple launched an iPad, the tablet became the biggest competitor to Amazon’s Kindle. So, the rivals cooperated to sell Amazon books via the iOS Kindle app, which helped Amazon to extend its e-book market and established iPad as a viable reading device. Sometimes coopetition partnerships lead to mergers. PayPal, for instance, was born from the merger of two competing financial companies.

Key Activities are what a company should do to make its business model work. For a pizza delivery service, it would be getting the freshest ingredients for the best price, preparing meals, organizing a call-center or a website, hiring couriers, etc. But in case you’ve developed an app that just gathers and transfers pizza requests, you have another set of actions such as supporting an app, organizing fast and seamless connections with partners, automatically updating menus, etc.

According to Business Model Generation , you can unite all your activities into three main categories:

• Production.
• Problem-solving.

Venmo, like most software providers, fall into the third category. Key activities for them are directly related to the platform. Consequently, the lion’s share of their budget is spent on supporting the system and scaling it up as the customer base grows.

Venmo’s Key Activities

Depending on the product or service you are trying to sell, you need to have a clear understanding of the ways you’re going to drive revenue from each Customer Segment.

A strategy that goes into identifying and managing your Revenue Streams is called a Revenue Model. Here are some of the revenue models that may work for you. See the article at the link for more information about monetizing your software business . Or check out our video on revenue models:

A 14-minute guide to revenue models

Advertising. Such platforms as YouTube, Twitter, Google, and Facebook, along with many other free-to-download apps and services have grown mostly thanks to advertising. Yes, Internet users tend to block ads, but organizations find ways to keep advertisements, from simply asking for AdBlock to be disabled to curating highly relevant ads.

Affiliate Marketing. This strategy is based on making commissions by referring other products and services to your audience. The key here is to select merchants in the same industry as you and recommend only the products you actually find beneficial to your users.

Subscriptions. This model would be the best match for your SaaS, PaaS, or IaaS business. It also applies to on-demand streaming services, such as Netflix, Spotify, or any online publishers, such as HuffPost.

Sponsorship. If you’re a small team of developers providing a useful, engaging, and preferably unique service, donations may be a way to go. Paint.NET is a free Photoshop analog that survives both by ads and donations. Include a PayPal donate button or kindly ask users to buy your team coffee or beer.

Freemium . It’s a no-brainer why this model is so extensively used by a number of web services. By attracting an audience to the basic set of features, you provide the paying customers (another Customer Segment) premium features.

Fee-based. This model requires a large pool of users who find the service valuable enough to pay a small fee. These fees can be either percent-based or flat and allow for easy income calculation. Venmo uses this model along with Uber, Stripe, and many online marketplaces. Its other powerhouse is data – by storing information about user financial activity, Venmo can make personalized suggestions and drive revenue from there.

Venmo’s Revenue Streams

The Value Proposition is the reason for a customer to buy your product. A good Value Proposition is a unique combination of features that will either solve a customer’s problem or bring them additional value.

The Value Proposition should be short. Make sure both you and your users can read it in less than 5 seconds and clearly understand what your product is all about. Drop vague descriptions and jargon.

Here are a few outstanding examples of Value Propositions that work:

• Trainer-led audio workouts for a fraction of the price of a live trainer. ( Aaptiv )
• Free, fast, detailed and entirely offline maps with turn-by-turn navigation – trusted by over 65 million travelers worldwide. ( Maps.me )
• Bookmate is the perfect way to enjoy books — whenever, wherever. ( Bookmate )
• The world’s best companies use InVision to design the products you love. ( InVision )
• We help big brands scale WordPress. ( Pagely )

Please note: You should have different Value Propositions for each Customer Segment.

A neat way to draft your Value Proposition is by using a Value Proposition Canvas . This is an official add-on to the BMC, developed by its original creators.

This map allows to describe your Value Propositions and Customer Segments in more detail Source: Strategyzer

You start with Customer Jobs on the right side of the map and sketch all big and small tasks you’ll help your customers accomplish with the product. Then move onto the Pains and Gains sections and describe every good and bad experience a customer has before, during, and after completing the job.

Next, go to the left side of the map and define your Products and Services . This is simple – just list all products and services your value proposition is built around. Finally, outline how exactly your product’s services are eliminating pains and generating gains in the Pain Relievers and Gain Creators sections.

For this exercise, invite people who are in direct contact with customers or people you are targeting.

In this video, we more techniques to help you identify your customer and market

Venmo has several value propositions focused on covering different customer needs. Its official tagline is short and simple: Share payments . The tool provides additional values with the social feed and eCommerce integrations, each of which will be important for different user groups.

Venmo’s Value Propositions

The Channels element reflects how a company aims at delivering Value Proposition to its Customer Segments. But that isn’t the only function of Channels; they can also create brand awareness and provide post-purchase customer support.

In the book Business Model Generation , Osterwalder and Pigneur highlight five phases of channels development. Each channel can cover more than one of these phases.

Five phases of distribution channels

Raising awareness . You can let your potential users know about your product through a wide range of channels. Currently, blogging and social media are the easiest ways to reach those who want to listen. Content marketing takes considerable effort, especially if you want to deliver quality content regularly, but it makes people engage and share content willingly. The awareness method that brings the most relevant and inclined-to-buy audience is word of mouth. However, it is also the hardest to scale.

Evaluating your Value Proposition. How can customers find your proposition helpful? They need hands-on experience. The try-before-you-buy technique, for instance, does just that. Don’t forget to guide them through a product to make sure they received the desired value or realized its potentials. Case studies and reviews could be another way to help customers understand the value before taking their wallets out.

Purchasing methods. Since we’re talking about software, your users will definitely be buying your product online. If you’re developing a mobile app, people should be able to find you in either the App Store or Play Market. If you distribute the app through another platform, make sure that users know that the payment process is safe and that they agree with the terms and conditions.

Delivering the product. Although a software product doesn’t require logistics and a complicated delivery process, you still have to make sure that your app has been installed correctly and runs the way it’s supposed to.

In our example, Venmo uses standard iOS and Android app markets to distribute, but it also has a website where users can view transactions without a payment option. Venmo also introduced a real debit card that users can obtain by applying online. As for its awareness-raising methods, Venmo relies on word of mouth and relationships with partners.

Venmo’s Distribution Channels

Post-purchase support. This is the phase that customers care a lot about. What is the cancellation policy? How do they contact you with a problem or a question? What is the onboarding process? Nowadays, many software providers use chatbots or a simulation as one of their post-purchase channel. (You can read our article about designing chatbots to learn more.) Also, you can send out customer surveys, track reviews and questions on social media, or create personal recommendations based on user activity.

Key resources play a direct role in creating your Value Proposition, delivering a service to your Customer Segments, and supporting Customer Relationships.

Resources are typically categorized into four assets: physical, intellectual, human, and financial.

Buildings, facilities, and vehicles, as well as any other tangible resource such as hardware or cooling system falls into the physical category. In the case of a software product, it also depends on what kind of delivery asset your product requires: whether you need to own hardware assets or they are sourced from a cloud provider.

For a software business, core resources will likely be human and intellectual assets. Intangible (intellectual) resources include patents, copyrights, licenses, and customer knowledge. The on-premise or cloud services you may be using for your business is also a form of intellectual resource.

As for human resources, all your software engineers, marketing specialists, and customer service representatives are valuable assets of any service-based business. However, it’s the costliest one as well. Consider outsourcing the services you can and remember to include accounting and legal consultants.

There are several ways that startups can get their financial resource, including bank loans, advances from strategic customers, and venture capital investors. In case your business revolves around an important cause, you can request a grant or start a crowdfunding campaign online. Of course, the majority of startups nowadays are self-funded (although, these typically receive the least press mentions). This process is also referred to as bootstrapping a business. Though, it is likely the hardest way to start a venture as it takes time to save money, bootstrapping allows you to have full control over your venture.

Venmo’s resources follow the standard model for software companies. Along with its own code base, a company acquires software licenses needed to build and maintain its services. Venmo also needs human resources such as programmers, QA experts, customer service specialists, management staff, and more.

Venmo’s Key Resources

When evaluating your Key Resources, ignore those that would be common for any business, but pay attention to the ones that are strategically important to you. For Amazon Prime, Key Resources would be licensed rights to stream films and TV shows. For Microsoft, Adobe, or Google, it would be numerous patents. And insurance and banking organizations can’t survive without financial resources.

According to Business Model Generation , there are five possible cases of Customer Relationships:

Personal assistance. Make sure your customer can contact you at any time prior to or after the purchase and make the contact channels diverse and accessible: via e-mail, phone, or chatbot. A specific approach to customer relationship is dedicated client care workers. They can be involved to deal with SaaS customers.

Self-service. This type of relationship is often maintained for the B2C client model. Except for automated updates and onboarding guidance, you don’t usually communicate with your users in this case. Venmo draws on a self-service model that provides users with an onboarding guide and a Help Center with FAQs. In some cases, users are free to directly contact support via phone, chat, or e-mail.

Venmo’s Customer Relationships

Automated service. This is how Netflix and Spotify maintain relationships with their customers. By providing AI-powered recommendations of movies and playlists, the services imitate human interaction and keep customers engaged.

Communities. To better understand customers’ struggles and facilitate connections between users, a company can create a community around a product or a brand where users can exchange knowledge. Have a look at Oracle . Their community with half a million active participants helps customers find advice among fellow users.

Co-creation. User-generated content is a feature of the modern web. Anyone who’s uploaded a video to YouTube has contributed a service. The role of the company, in this case, is to precisely match content creators and content consumers. Another good example is HiNative that allows people around the world to contribute questions and answers about their languages on the same platform.

Delivering Value, maintaining Customer Relationships, and buying Resources all incur costs.

For a typical product development software company, the major operational expenses usually include research and development (R&D) costs, sales and marketing activities, and support costs. Let’s break them down:

• According to MarketRealist , only 10 to 20 percent of costs in the software industry go for research and development, only 5 percent of that sum is actually spent on innovation, and the rest goes to testing.
• Due to the large competition in the market, marketing expenses of software companies usually surpass R&D costs, which is why about 25 percent of revenue is spent on marketing and sales. Depending on the product, this number can vary.
• Support costs are related to handling customer requests and retaining your audience. Since it’s difficult to retain customers of a software product, a big chunk of expenses goes to Customer Success Management and churn prevention.

Apart from operational costs, your Cost Structure should include:

• Capital costs – investments that go into acquiring or upgrading physical resources, such as buildings and computers.
• Overhead costs – the general operational costs that have no direct impact on delivering a product, such as electricity, or a processing time for installation and testing software.
• Staff costs – resources spent on hiring, training, and retaining employees.

As most tech companies, Venmo heavily relies on its R&D capabilities. Sales and marketing costs come in second, including customer support.

Venmo’s Cost Structure

Okay, we’ve covered the theory, but how do you map this all out in practice? We’ll give a few tips for planning your BMC session and avoiding common mistakes.

How to Coordinate a Business Model Canvas Workshop

The BMC methodology was created to be flexible, so there are no strict rules on how canvas mapping should work. There are, however, guidelines that will help you get started and not get lost.

Time you will need: Up to 2.5 hours. Limit yourself for more concentrated work.

Team to assemble: All concerned people should be present.

The canvas was created in the pre-pandemic world, when in-person communication was preferable. But today, we know that distributed teams can be just as effective. So, we’ll describe what you’ll need in both cases.

If you’re meeting in person , it’s recommended to have

• a large poster in B0 format or a white board of a comparable size,
• sticky notes of various colors,
• a camera to capture the resulting canvas.

For remote groups , make sure you have

• an online BMC template (we’ll list a few suggestions further). It doesn’t need to have collaborative features as one of the group members can be responsible for logging ideas.
• a plan B if technology fails. You can screen-record during the call or make screenshots at specific intervals so all data isn’t lost.
• pen and paper to capture ideas when people are waiting for their turn to speak.

Here are a few things that are important to make sure the Canvas works as intended.

Don’t write directly on the Canvas. This concerns your BMC on paper or white board. Instead, place sticky notes. Ideas should be easy to add, move, remove, or simply change in order.

One idea per note . Don’t create bullet lists on your sticky notes. If you don’t have enough space, be less expansive with your ideas or find a larger surface.

Color code. If you have several very different target audiences, it will help to separate them by color and then use corresponding colors when describing their Value Propositions, Channels, Relationships, and so on.

Use images . If you’re feeling creative, enrich your words with emojis, simple illustrations, or photos. We process things faster when there’s a visual attached, and it may give your teammates a better idea of what you mean.

Stay minimalist . Remember, this is the place to create the strategic overview, not operational tasks. You may go into detail in one of the following workshops but start with the big picture.

Business Model Canvas in Real Life: Examples

Understanding how the approach works is one thing and following someone else’s example is entirely different. If you’re still struggling to figure out what should go on your board, here are a few examples to get your wheels turning in the right direction.

Starting a lemonade stand is for many their first experience with running a business. And it’s also –  conveniently – a fine and simple illustration for a Business Model Canvas. Here, your partners, suppliers, resources, and even customers can all be your family and friends. As for revenue streams, it’s different from the software model and in most cases comes down to a finite price for a drink.

Business Model Canvas for a Lemonade Stand

Hotel alternative provider Airbnb concentrates on two big customer segments – guests and hosts – each of which can be broken down into subcategories. Same goes to value propositions: While some are attracted by cheap prices for greater value than hotels, others are searching for luxurious and unusual experiences that can be easily explored via the platform. Airbnb’s biggest source of revenue is its fees: Hosts are charged 3 percent and guests up to 20 percent. For a more detailed look at Airbnb’s model, check out this canvas created on Canvanizer.

Business Model Canvas for Airbnb

Uber is a common example used for understanding a BMC since it’s such a prominent business and a great case of innovation in technology. Just like Airbnb, another shared economy business, Uber has two big customer segments – drivers and riders. This segmentation is also geo-demographic as the service seems to employ drivers who live in areas with the highest unemployment rates. Uber is also an interesting scenario from a marketing standpoint – an innovative service, it enjoys a lot of free of media coverage.

Business Model Canvas for Uber

LinkedIn also offers multi-sided solutions for different customer segments – it’s widely used by recruiters to seek and contact talent, it helps people maintain a professional identity and connect with specialists in their field, and it can also be used by companies as a marketing channel. Despite keeping its main social function free, LinkedIn has three revenue streams for each customer segment. First is a paid account that widens one’s social reach, second is a hiring solution that helps recruiters manage job offerings, and third, ads that help brands target an audience based on their profile data.

Business Model Canvas for LinkedIn

For more examples, visit business model examples on Strategyzer – a great collection of thorough models to inspire you or compare to well-known companies.

Visible connections. The design of the canvas directly illustrates the way elements are connected and provides a clear understanding of the impact the building blocks have on each other. That’s why it’s important to follow the specific order to fill in your business model.

Changing and advancing. While many business strategy enthusiasts compare the BMC to a traditional business plan, these two methods have fundamentally different approaches. Business plans are heavy 100+-page documents that take time to write, read, and edit. The BMC is meant to be a living document that’s always changing and evolving. Thus, you and your team can make immediate decisions and add changes on the go.

Enjoy the advantages of the BMC by trying out our convenient widget below. You can quickly fill in the boxes, create your business model canvas, and download it without leaving this page.

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Business Model Canvas Tool

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Value Propositions are always at the core. If you have another look at the canvas, you will notice that one element – Value Propositions – is placed at the very center of the canvas. It’s a backbone, a bearing wall that separates the front stage and backstage of your business theater.

Speaking the same language. Eventually, the BMC makes your crew members understand each other better. By using the same definitions for reference, you provide a transparent communication between people and teams. You can take your BMC sheet to a meeting, brainstorm, use sticky notes to outline your new ideas, and later place the canvas directly on the wall, making it easier for ideas to be seen and adjusted.

By looking at the model and even after starting to work with it, many entrepreneurs argue that it excludes a lot of key factors for creating a thriving business. Executives are bothered by the lack of external factors. What about competitors? And why not include the organization’s mission and priorities?

The short answer is: Because that’s not what the BMC is for.

But let’s provide a broader explanation.

• The main purpose of the BMC is to visually represent how you intend to build or develop a successful business. It’s a simple scheme aimed at defining the pathway in the constantly changing market and providing a concise overview of how your operational processes link up with one another.
• Just as you can’t include profit as a resource, an external impact is more of an outcome than a building block of your business. Thus, instead of trying to fit those elements into the canvas, you can adjust the internal processes when complications arise.
• Imagination is the key. You can’t make the model work for you unless you want to work on it as well. It’s not a silver bullet and it’s not meant to apply to each individual situation. So, don’t make the approach restrictive. Stay creative and inventive when working with the canvas. Combine it with other tools, such as a Value Proposition Canvas, or use adaptations of the methodology. One of the most popular is Lean Canvas.

The Lean Canvas was created by Ash Maurya, CEO and Founder of LEANSTACK, as a version of BMC, specifically optimized for lean startups. The idea of a lean startup was introduced by Eric Ries in his titular bestselling book, where it was constructed on the following principles:

• handling uncertainty or venturing into marketing immediately,
• validated learning , meaning making discoveries as you go, and
• innovation accounting by defining and keeping in mind your success metrics.

Maurya made a few changes to the sections of the original BMC chart. To do that, he addressed the riskiest segments and articulated them to be more actionable: Key Partners was replaced with Problem, Key Activities was rebranded Solution, Resources were switched onto Metrics, and Customer Relationships was skipped in favor of Unfair Advantage.

Business Model Canvas evolving into Lean Canvas Source: Ash Maurya

Now, what do the updated canvas sections mean?

The Problem part addresses the way startups often fail by not having the right product/market fit . So, to launch a successful business, you must start with correctly identifying and understanding what the market is lacking.

After that, you can construct the Solution . Maurya wanted the small box of the canvas to “constrain entrepreneurs” and have them evaluate every idea that goes on the board, instead of sticking to the one they’re most passionate about. It’s also a great place to define your Minimum Viable Product (MVP) .

To minimize the chaos of numbers, Maurya proposes focusing on a few Key Metrics , so that the startup can ignore everything else and doesn’t spend time and resources on wasteful activities.

We talk about all main metrics for a software product in this video

Finally, the Unfair Advantage box must remind the startup that its success largely depends on how they’re different from similar products on the market and help preemptively plan for when followers and copycats enter the competition.

You may now be thinking, “Okay, all this sounds great, but isn’t it another startup tool? What if I want to take a fresh look at my established company and see how I can make it better?”

The tool’s versatility allows you to apply it in many different ways. You can strategize a logic behind a new initiative (like Amazon’s decision to allow its Prime users stream movies for free). Or even analyze the leaders’ success stories and learn to apply them to your business (see LEGO’s reinventing experience presented on a canvas). Osterwalder says, “Everybody needs to understand how to use this and use this as a shared language.”

Here are just some of the reasons to use the Business Model Canvas for your established business.

• Detect opportunity gaps and find new perspectives.
• Create your competitors’ business models and compare them to yours.
• Keep track of external changes in each building block.
• Pitch investors using a visual representation that others can understand.
• Test new business models.
• Map out potential changes.
• Align your team’s goals and actions.
• Look at the business from a customer’s perspective.
• Analyze new opportunities, partners, and channels.

Remember that you aren’t using the BMC to confirm what you already know about your organization, but rather to find flaws and pinpoint the ways to make your business processes more effective, and after evaluating the changes, act upon them.

The BMC is not a tool that you use once or twice and forget about it till the next evaluation of your company. It was designed and invented to become a part of every business’ day-to-day life, a map to guide your ship between rocks and shallows. So, what happens after you’ve laid out your business model?

Dashboard. Use the BMC to track the changes in your building blocks and the level of satisfaction of these changes. Color-code the most complex elements to focus on them more and attract the team’s attention to the current problems.

Meetings . Use the BMC as a brainstorming instrument at meetings to unify new ideas and manage them later in your work.

Understanding customers. You don’t have to create the BMC for companies only. Try understanding your customer by creating their own business models. For instance, SAP, the German software giant, uses the BMC in their pre-sales process . The SAP sales teams sketch the customer’s business model to prepare for sales meetings.

Onboarding. When hiring new talent, especially top management, you can use the BMC to give them an immediate understanding of where your company stands and help them join the team smoothly.

Even though a traditional approach is to grab a large piece of paper (or a whiteboard), a Sharpie and start filling in the canvas, there are several options to digitize this process. There are a few opportunities for Business Model Canvas software for you to use. It shouldn’t be too difficult to use, but make sure to find collaboration features if you create a canvas in a team.

AltexSoft’s Business Model Canvas template . When we set out to create our free BMC template, we wanted to build a minimalist experience for quick idea sketching and note-taking. The boxes have prompting questions and you can receive the finished result by email.

Canvanizer. This is a free, easy-to-use business model canvas tool that allows you to share the same canvas with your teammates using links similar to Google Docs so you can brainstorm together. You can export the canvas into CSV or an image format. Besides traditional BMC, Canvanizer suggests templates for various similar and related tasks. For instance, you can do SWOT Analysis, use Lean Canvas for startup planning, feedback canvas, customer journey canvas, and more.

Strategyzer . The tool is much more complex than Canvanizer. It allows for creating a Business Model Canvas and a Value Proposition Canvas with real-time collaboration support. Strategyzer comes with a built-in estimator module that can analyze revenue streams and assess whether the business idea is financially viable. Additionally, the product suggests a Testing Dashboard for Lean Startup development and has a number of other additional features that justify its price, ranging from built-in help to sticker color coding and advanced encryption. The base version costs $25 per month and supports unlimited canvases and an unlimited number of users. The enterprise package includes multi-team collaboration, portfolio management, and offers dedicated coaching.

CNVS. We used CNVS to create visualizations for this article. The tool is great if you don’t need bells and whistles but you like clean and slick design with cute monsters. And it’s totally free if you don’t consider subscribing to their newsletter a payment.  You can create traditional BMC, Feature Canvas, and Lean Canvas; share them with or with no editing access using a link; and that’s basically it.

“The same products, services or technologies can fail or succeed depending on the business model you choose. Exploring the possibilities is critical to finding a successful business model. Settling on first ideas risks the possibility of missing potential that can only be discovered by prototyping and testing different alternatives,” said Alex Osterwalder, creator of the Business Model Canvas.

No business plan works out the way you intend it to. The only way to be prepared and effective in the ever-changing market is to stay dynamic and ready to act. Instead of spending months or even years developing a strategy that may not even materialize in the end, you can adjust your processes on the go in the existing environment and surpass competitors while you’re still growing. Moreover, you will stay connected to your team with the power of co-creation and be sure that you’re on the same page with every party involved.

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I was wondering if you have a business with multiple business units, how many BMC shall we design? one BMC for all? or one BMC per business unit? Suppose my company sells food and sells computers…

There may be two scenarios. First one: If a company sells different goods, but has one value proposition like a cinema selling both movie tickets and popcorn, one BMC may be enough. Second, if a company solves completely different problems and has different products, it means that there are several business models. And that’s the case when you can make a few business model canvases. Let’s take Amazon for example. It has a marketplace and Amazon Web Services, so each business model has its own canvas.

Further Reading

Starting a saas business: 9 steps towards success, 13 signs your legacy systems need modernization, using microservices for legacy system modernization.

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Business Model Canvas Explained

Business Model Canvas is a business analysis framework. Swiss business theorist Alexander Osterwalder created it in 2010. Since then, the Business Model Canvas has become one of the most popular management tools for those who run a company. Osterwalder’s framework is a questionnaire that makes it easier to assess the state of your startup and to find its growth points. Let's find out what elements the model consists of and when the Business Model Canvas template will be useful for a startup.

Reading time: 6 minutes

How the Business Model Canvas works

A business model is a brief breakdown of the strengths, vulnerabilities, and development opportunities of a company. The framework helps you perform such analysis for a company of any size and age: from a startup to a long-standing large business.

Business Model Canvas is a table with 9 cells where each refers to a certain component of the startup. And if you fill out the table, you can visualize your business model.

👉Let’s take a closer look at each element:

1. Key partners. Here you should list all counterparties and also specify how you cooperate. For example, identify who is the key supplier and who is the information partner. This will help you understand what support your business can expect and what partners are missing.

2. Key activities. In this cell, write down activities the company performs to retain old customers and partners, attract new ones, and increase revenue.

3. Key resources. Here you need to write down resources that will help the company increase revenue and attract customers. These can be financial, reputational, informational, and human resources.

4. Value proposition. When filling the BMC model , make sure to include the problem that you help your client with. What will they get from interacting with your company? How will your product meet their needs? Perhaps you offer the best price, or you have the friendliest staff and customers are very pleased to contact you. Or maybe your product and service are not particularly different from the competitor’s but your company is eco-friendly or does charity work. All these details will form the value proposition of your startup.

5. Customer segments. Here you need to segment your target audience: describe who you work for and which of your customer segments are a priority.

6. Customer relationships . This section focuses on how the company interacts with its clients. Maybe you have a personal customer service or offer self-service? Do you sell a finished product or work together with the client? Make sure to consider and describe these details.

7. Channels. How do you communicate with current and potential customers? Maybe it’s social networks, in-app advertising, or support service? And how can people purchase your products and services?

8. Cost structure. Determine what your biggest expenses are. Then, decide which of them are key for your business, and which ones you can do without.

9. Revenue streams. What revenue streams does your business have? It could be sales, paid subscriptions, or rent. We recommend mentioning the main sources and criteria for pricing.

Business Model Canvas is a useful tool for building a comprehensive strategy at any stage of your business: it helps to define the future development direction. You can benefit from filling out such a table even on a startup stage when the business is just starting or has not launched yet. This will help you assess your product or service , as well as identify the weaknesses and strengths of your business or idea and correct them on the go. Now let’s look at a real-world example of how to fill out a Canvas for a startup.

How to create Business Model Canvas for a Meditation app

Let’s look at an actual case: building a business model for a startup meditation app . The platform will provide short online lessons with breathing practices, and meditation sessions that you can take at any time from any location. Let’s imagine that we are at the stage of searching for a software development partner and we are creating a Canvas.

1. Key partners. The key partner at the startup stage is the software development team. They will participate in testing hypotheses, improving and developing the application. Secondary partners are bloggers promoting a healthy lifestyle who will promote the app among their subscribers.

2. Key activities. To attract new customers, our startup conducts advertising campaigns on social networks and offers a free version of the app. To retain existing customers-ensures the smooth operation of the app regularly publishes useful content on a healthy lifestyle.

3. Key resources. The startup has a small budget for development in the first six months and a cool team of 5 professionals. Among them are well-known experts in breathing practices, so there is also a reputable resource.

4. Value proposition. The app is relevant to residents of big cities who are regularly stressed. They don’t always have the time and opportunity to attend face-to-face yoga and meditation classes. The app allows you to restore your resources in a few minutes of breathing practices anywhere. What sets us apart from our competitors is the high level of experts who record our video and audio tutorials.

5. Customer segments . Young people between the ages of 20 and 35 with medium and high incomes are interested in the app. There are two key segments of the target audience. The first group of users is people who are subject to nervous tension and are looking for new ways to cope with stress. The second segment includes people who are already interested in breathing practices, yoga, and meditation, and who want to study online. The third secondary segment of the audience is young people who just love to try everything new.

6. Customer relationships. Most communication takes place in the app: everything is clear, understandable, and convenient.

7. Channels. Communication with customers takes place through social networks and the email newsletter, and our startup provides services through the application that users can download from the App Store and Google Play.

8. Cost structure. The biggest expense item is app development and maintenance. The second is content: shooting video tutorials and recording audio tutorials inviting various speakers and trainers. The third expense item is advertising. And finally, employees’ salaries.

9. Revenue streams . The startup’s revenue sources include a paid subscription to the premium version of the app, and income from the ads shown in the free version.

Business Model Canvas shows that with a limited budget and app monetization, you need to invest in improving the app and creating high-quality video and audio tutorials. The budget for advertising in such conditions can be reduced by expanding the list of barter partnerships with bloggers: they advertise our product on social networks, and we invite them to our broadcasts so that our audience can learn about them. Since the product is still new to the market, most users will not risk buying a paid subscription right away; they need to understand the value of the product. So at first, you should also focus on the app’s advertising monetization model.

We once worked on a similar project: back at the beginning of the pandemic, we developed an application for online meditation classes . We don’t know if the client created a Business Model Canvas template but it would definitely be helpful. We managed to develop the app in 5 months: see how!

6 reasons to create Business Model Canvas for a startup

You can start creating Business Model Canvas , even when your business idea is fresh and you don’t know the market well . This is useful for a startup for several reasons:

1. You will get a clear vision. It’s good when info about target audience segments, UVP, and monetization options are written down, and not just stored in your head. Putting everything in words on paper or in a Word document is much more efficient.

2. The defined business model will make it easier to communicate with colleagues, partners, and investors. You won’t have to explain your own thoughts in a confusing way — you’ll be able to show clear theses and facts. The framework is an easy way to introduce your business to people.

3. Canvas will help you find weaknesses even before creating a product. When working with a framework, you bump into questions that you might not have thought deeply about at the start. For example, who your key partners are, and how your customer relationships will be built. 

4. Canvas is a dynamic framework, so you don’t have to fill it out once and for all and put it in a frame. Indicate, for example, that there are few partners and they are unreliable — this will show that you need to urgently look for new ones. And when you find them, add them to the table.

5. There are much more risks when your company is just starting, and you need to calculate every step carefully. Some well-known large organizations that have long-established themselves in the market may not need Business Model Canvas as much as a startup does.

6. Describing a business model in the framework at the startup stage is a good way to define a key element — the essence of your business model . With that, you will understand how to best monetize your product.

What should I do next?

Filling out the Canvas template for building a business model is the first thing a startup needs to do to better understand their product or service . And then all the fun begins — detailed market research, working on the product in detail, software development, and MVP testing. If you have already defined your business model in Canvas and have an idea of the direction you want to take, get in touch with us! We already have 140 experts on board who work with full-cycle development. You can come to us with an idea at any stage, and we will bring the project to life and provide any support you need.

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The Business Model Canvas

The Business Model Canvas is a strategic management and entrepreneurial tool. It allows you to describe, design, challenge, invent, and pivot your business model. This method from the bestselling management book Business Model Generation is applied in leading organizations and start-ups worldwide.

The Business Model Canvas enables you to:

• Visualize and communicate a simple story of your existing business model.
• Use the canvas to design new business models, whether you are a start-up or an existing businessManage a portfolio of business models
• You can use the canvas to easily juggle between "Explore" and "Exploit" business models.

About the speakers

Download your free copy of this whitepaper now, explore other examples.

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Mastering business models

A self-paced online course with 
Alex Osterwalder and Yves Pigneur.

Are you trying to improve your existing business model? Or trying to create a new one that can compete in today’s market?

• Create your own canvas

Create a new Business Model Canvas

The Business Model Canvas was proposed by Alexander Osterwalder based on his earlier book: Business Model Ontology . It outlines nine segments which form the building blocks for the business model in a nice one-page canvas. You can find a detailed explanation in his bestselling book "Business Model Generation".

If you want to try it a Business Model Canvas without entering your email address, please use our Canvanizer 2.0 Business Model Canvas Demo for a first impression.

Canvas Title:

Description :

Your Name :

More about the Business Model Canvas

The Business Model Canvas reflects systematically on your business model, so you can focus on your business model segment by segment. This also means you can start with a brain dump, filling out the segments the spring to your mind first and then work on the empty segments to close the gaps. The following list with questions will help you brainstorm and compare several variations and ideas for your next business model innovation.

Key partners

• Who are your key partners/suppliers?
• What are the motivations for the partnerships?

Key activities

• What key activities does your value proposition require?
• What activities are important the most in distribution channels, customer relationships, revenue stream…?

Value Proposition

• What core value do you deliver to the customer?
• Which customer needs are you satisfying?

Customer Relationship

• What relationship that the target customer expects you to establish?
• How can you integrate that into your business in terms of cost and format?

Customer Segment

• Which classes are you creating values for?
• Who is your most important customer?

Key Resource

• What key resources does your value proposition require?
• What resources are important the most in distribution channels, customer relationships, revenue stream…?

Distribution Channel

• Through which channels that your customers want to be reached?
• Which channels work best? How much do they cost? How can they be integrated into your and your customers’ routines?

Cost Structure

• What are the most cost in your business?
• Which key resources/ activities are most expensive?

Revenue Stream

• For what value are your customers willing to pay?
• What and how do they recently pay? How would they prefer to pay?
• How much does every revenue stream contribute to the overall revenues?

You love working with canvases? How about bringing innovation and collaboration to the next level with great canvases and a great app.

Canvanizer Free

• Basic Canvas templates
• Anyone with the link can access
• Can't change segment titles
• PDF & PNG export
• No images / standard font
• Desktop only
• Single canvases only
• No team features
• English only
• The "old" look&feel

Canvanizer Premium

• Over 40 popular canvas templates
• Private canvases / Revocable links
• Customize segment titles
• Upload images / choose fonts
• Mobile editing & camera use
• Project workspaces
• Team progress & collaboration
• Languages: EN,ES,FR,IT,NL,PL...
• View modes, filters, sidenotes...

Choose a canvas template:

Business model canvas.

The holy grail of design thinking tools..

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. You can also use the business model canvas to understand your own business model or that of a competitor! The Business Model Canvas was created by Alexander Osterwalder, of Strategyzer.

11 building blocks.

1. Customer segments . List  your most important (future)  segments. Look for the segments that provide the most revenue.

2. Value proposition . W hat are your products and services? What is the job you get done for your customer?

3. Revenue streams . List your top three revenue streams. If you do things for free, add them here too.

4 .  Societal and environmental benefits.

What are you giving back to your community and planet? 

5 . Channels . How do you communicate with your customer? How do you deliver the value proposition?

6 . Customer relationships . How does this show up and how do you maintain the relationship?

7 . Key activities . What do you do every day to run your business model?

8 . Key resources . The people, knowledge, means, and money you need to run your business.

9 . Key partners . List the partners that you can’t do business without (not suppliers).

10 . Cost structure . List your top costs by looking at activities and resources.

11. Societal and environmental costs.

What’s the negative impact of your business model?  

Your step-by-step guide.

Before you start..

You can learn a lot from your competition. Choose some competitors and map their business models. Armed with this information you’ll have deep insight into what customers want and what they are willing to pay for. You’ll have a clearer picture of just how customers’ needs are met across the entire industry, not just in your company. And, you’ll uncover vital information about how other businesses, maybe even very successful businesses, have created their own spaces in the market.

Get the right team of 3-5 people together.

Grab a large chunk of wall space.

Print or draw the canvas on a big sheet of paper.

Have plenty of sticky notes and markers ready.

Allow yourself 45-60 minutes of undisturbed time.

1. High level.

Start by mapping out the business on a high level: only the most important, vital aspects of the business model.

2. Connect the building blocks.

Link up the building blocks: every value proposition needs a customer segment and a revenue stream! When everything is on the board, take a step back. Have a short break. Did you miss anything? Forget something?

Pro tip: if you have multiple customer segments it is best to pick a colour for each segment in the post-it notes you use. That way you easily see if for each segment there is a value proposition and a revenue stream.

3. Current state.

Don’t mix ideas for a future state with what is going on right now, and don’t mix different departments!

Pro tip: if you work for a large organization you might find varying value propositions and business models. In that case ask the different departments to map out their own business models. You can compare them afterwards.

Take a step back check if every customer segment is linked to a value proposition and a revenue stream. Make sure everything on the left side of the canvas is needed to support the right side of the canvas. Everything else can go.

Rank your business model’s performance (0: bad, 10: excellent) for each of the following questions:

How much does switching costs prevent your customers from churning?

How scalable is your business model?

Does your business model produce recurring revenues?

Do you earn before you spend?

H ow much of the work can be done by others?

Does your business model provide built-in protection from competition?

On what cost structure is your business model based?

5. Next steps.

Pro tip: have an artist visualize your business model. It helps to create impact when sharing the model and it makes it easier for others to become connected. Checklist :

Take a snapshot picture of your business model canvas for easy to share future reference .

Ask team-members discuss the business model with others .

Trigger team-members to actively look for 1-2 blind spots .

Filter out the design criteria .

Test your assumptions .

Need some extra brainpower for your business model canvas?

Meet stefan. he is your expert..

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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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 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.