6.8: Business Model Canvas

The business model canvas is a strategic planning tool used by managers to illustrate and develop their business model. The business model canvas template clearly identifies the key elements that make up a business. Additionally, it simplifies a business plan into a condensed form. In this way, the business model canvas template acts as an executive summary for the business plan.^[1]

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.^[2]

The typical use for this tool is to outline the fundamental building blocks of a business, but it can be used effectively for individual products as well. It can be used to identify potential opportunities for growth and expansion or areas that need improvement. The components may vary, but typically the business model canvas includes the following nine building blocks, and each is represented by a rectangle in the model diagram.

• Customer segments
• Value proposition
• Channels
• Customer relationships
• Key activities
• Revenue streams
• Key resources
• Key partnerships
• Cost structure