Business Model Canvas

The Business Model Canvas (also known as the Canvas Model Business or BMC), is one of the powerful innovation tools that you use in Business Model Hacking. In this blog I explain step by step how you can apply the Business Model Canvas in the right way for your company.

Download the Business Model Canvas: Powerpoint (easy to fill in template), A1 or A0.

Explanation Business Model Canvas

The Business Model Canvas has completely changed the way we think about business design. Alexander Osterwalder, created together with his colleagues at Strategyzer a powerful innovation tool to think in “business models” instead of just thinking in products in services.

The Business Model Canvas provides a visual overview in which the important components of a company are described on 1 page. The canvas shows how an organization creates, delivers and harvest value.

Advantages

  • It maps your company in a clear way
  • It is very visual and therefore easy to communicate with third parties
  • Multifunctional tool that is quick to set up and adjust
  • Helps to analyze your business from a distance
  • The Business Model Canvas allows you to quickly create new business model options

The building blocks of the Business Model Canvas

The Business Model Canvas consists of 9 different building blocks. Below is a clear explanation using an example of Hellofresh.

1. Customer Segments

Who are your customers? Most companies do not focus on everyone, but on a part of the market: one or more segments. Which customer segments are you targeting? Can a distinction be made between (paying) customers and users?

2. Value Propositions

A value proposition goes beyond just naming your products and services. It’s about the promise your customers make about the value your offering creates for them. How will your offer improve the lives of customers? Would they be sorely disappointed if your company shuts down tomorrow?

3. Customer Relationships

Channels refer to all the ways in which an organization interacts with the customer. Finding the right mix of channels is crucial to reach customers and convince them to choose your offer.

4. Revenue Streams

A company without a good revenue model is doomed to fail! The cash register has to ring, because a dripping money tap is not enough to survive. What is the revenue model? And what are the revenue streams per customer segment?

5. Key Resources

The key resources needed to realize the value proposition and run the business. Key resources can be owned by the company, but can also be leased or obtained from key partners.

6. Core Activities

The main activities that a company must perform to perform well.

7. Core Activities

The main activities that a company must perform to perform well.

8. Key Partners

There is an old saying that goes: “The whole is greater than the sum of its parts”. Partners can help an organization do things that alone would not be possible. The right partnerships help to be successful, grow and compete.

9. Cost Structure

What does the cost structure look like? What are fixed costs and which costs are variable? And are the revenue streams greater than the expenses?

When apply the Business Model Canvas?

The Business Model Canvas is a multifunctional tool that you can use in countless situations. Due to its versatility and the country of origin of the inventors, it is also called the Swiss army knife among innovation tools. With Business Model Hacking you use the BMC to critically examine your company and design new strategic options. The Business Model Hacks inspire and give new ideas to strengthen your company. This often produces many individual ideas that you then concretize with the help of the Business Model Canvas and transform them into prototypes of business models.

Tips when applying the Business Model Canvas

Below are a few tips. If you want more information about each tip, read the following blog:

1. Make sure the goal is clear

2. Match the level of detail to the goal

3. Only list the most relevant things on the canvas

4. The building blocks are connected to each other

5. Avoid unclear, woolly language on the canvas

6. Work out each idea on a separate canvas

7. Use different colors of post-its

8. Use pictures to reinforce

9. Distinguish between assumptions and facts

10. Separate the current situation from the future situation

Ready to create better business models?

Use Business Model Hacks in combination with the Business Model Canvas for maximum results.