4.3 Business Model Canvas

A useful tool for visualizing any business model is the Business Model Canvas. This is a one-page template that maps out nine key building blocks of a venture: Customer Segments, Value Propositions, Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key Partnerships, and Cost Structure. The Canvas lets you sketch the whole plan in one view.

Figure: The Business Model Canvas – a one-page template for laying out a business idea. It covers areas like Value Proposition, Customers, Revenue Streams, and Costs.

Using the Canvas, a startup can fill in each block with brief notes. For example, under Customer Segments one might list “Millennials interested in sustainable fashion,” and under Value Proposition: “Eco-friendly, affordable clothing made from recycled materials.” The Revenue Streams box might say “Direct sales online + retail partnerships.” By filling it out, you see the whole picture. You can then revise the Canvas as you learn more, which keeps the business model flexible and clear.