What is the Business Model Canvas?

The Business Model Canvas provides a structured and visual “one-pager” approach to understanding how a company, project, or product can create, deliver, and capture value. It’s essentially a snapshot that helps describe and assess new or existing business models.

Developed in 2010 by Yves Pigneur and Alexandre Osterwalder, authors of “Business Model Generation,” the Business Model Canvas was initially intended to be a tool for entrepreneurs and small business owners. Since then, it has been widely adopted by companies of all shapes and sizes around the world. There are many reasons for this:

How to complete the Business Model Canvas

Sometimes called a "business matrix," the Business Model Canvas is made up of nine key sections built around three key themes:

  1. Desirability (Sections 1 to 4): How does the business create value?
  2. Feasibility (Sections 5-7): How does the business deliver value?
  3. Sustainability (Sections 8 and 9): How does the business capture value?
The business model canvas

As you work through the nine different sections, you should ask the following questions:

Section 1: Customer Segments
Who are your customers?
What target demographics are you hoping to serve?
Are they consumers (B2C) or other companies (B2B)?

Section 2: Value Proposition
How are you addressing customer problems?
How can your business or product offer to address those problems?
Why should your customers prefer your business or product over a competitor’s?
What makes your business or product unique?

Section 3: Customer Relationships
What kind of relationship will you have with your customers?
Are your customers autonomous? Do they require support? Are they a community?
How will you communicate with your customers? What tone will you use?
How do you plan to retain customers?

Section 4: Distribution Channels
What owned and operated channels will you use to reach your customers?
What third-party channels will you use to promote your business or product?
How will your customers find your business or product?

Section 5: Key Activities
What activities must be done in-house to create and deliver value?
Which activities can be outsourced?

Section 6: Key Resources
What resources (human, financial, or material) are needed to deliver value?
What resources are needed to manage the customer relationship?
What resources are you currently lacking?

Section 7: Key Partners
Who are the partners you can not do business without?
Who are your suppliers?
Who are your advocates?
Who are your other strategic partners?

Section 8: Revenue Streams
How does your business make money? Do you sell individual (one-off) products or services?
Do you sell subscriptions?
How much are customers willing to pay for your product or service?

Section 9: Cost Structure
What are the hard costs associated with your business activities?
What are the resource costs associated with your business activities?
How are the costs allocated?

A few things to keep in mind:

Suggested resources to learn more about the Business Model Canvas