Resources Strategy & Planning Business Model Canvas: Explained with Examples

Business Model Canvas: Explained

with Examples
Updated on: 12 December 2022 | 15 min read

Exploring Business Model Canvas?

Create one Learn how to Key building blocks of
using a create a the business model
template business model canvas
IN THIS GUIDE
What is a Business
Model Canvas
What Are the
Benefits of Using a
Business Model
Canvas
Got a new business idea, but don’t know how
How to Make a
to put it to work? Want to improve your
Business Model existing business model? Overwhelmed by
Canvas writing your business plan? There is a one-
What are the Key page technique that can provide you the
Building Blocks of
the Business Model solution you are looking for, and that’s the
Canvas?
business model canvas.
What to Avoid When
Creating a Business In this guide, you’ll have the Business Model
Model Canvas
FAQs About the Canvas explained, along with steps on how to
Business Model
Canvas
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.
Business Model Canvas Explained
Business Model Canvas Explained (Click on the template to
edit it online)

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.

As an example, check out the Business Model

Canvas for Netflix that we created to give you
an idea of how it works.

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.
Use Strategyzer Business Model Canvas to
visualize and design company’s business
model in a simple, structured format.

What are the Key

Building Blocks of the
Business Model Canvas?
There are nine building blocks in the business
model canvas and they are:
1. Customer Segments
 2. Customer Relationships
3. Channels
4. Revenue Streams
5. Key Activities
6. Key Resources
7. Key Partners
8. Cost Structure
9. 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.
Business Model Canvas Template
Business Model Canvas Template (Click on the template to
edit it online)

Let’s look into what the 9 components of the

BMC are in more detail.
Customer Segments
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.
Customer Persona Template for Business Model
Canvas Explained
Customer Persona Template for Business Model Canvas
Explained (Click on the template to edit it online)

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.
Create a Business Model
Customer Relationships
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.
Customer Journey Map
Customer Journey Map (Click on the template to edit it
online)

Channels
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.

Revenue Streams
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

Key Activities
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.

Key Resources
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
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

Cost Structure
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).
Value Proposition Canvas
Value Proposition Canvas (Click on the template to edit it
online)
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,
1. 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.
2. Detailed operational processes such as
standard operating procedures of a
business. The BMC focuses on the
strategic and conceptual aspects.
3. 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.
 4. 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.
5. 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.
6. 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.

This example, the Business Model Canvas for

a Restaurant, will give you a better idea of the
dos and don’ts when it comes to creating a
business model canvas.
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.
Check out the Amazon Business Model
Canvas to identify key components of their
business strategy, including customer
segments, value propositions, and revenue
streams.
What best practices do you follow when
creating a business model canvas? Do share
your tips with us in the comments section
below.

FAQs About the Business

Model Canvas

How do I determine my value

proposition? 

How can I build and maintain

customer relationships? 

What should I consider when

establishing partnerships in the
business model canvas?
 How can the business model
canvas help to analyze and 
optimize my business model?
Can I use the business model
canvas for different types of 
businesses?
How often should the business
canvas model be updated or 
revised?
How can I effectively
communicate my business model
to stakeholders using the 
business canvas model?

business model canvas

Author
Amanda
Athuraliya Amanda Athuraliya
Communications Specialist
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.
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View all posts by Amanda Athuraliya →

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