Business Model Canvas

The Business Model Canvas is a visual tool used to document a company's value proposition, customer segment, customer relationship, key resources, key activities, key channels, cost structure, and revenue streams all in one place.

The Business Model Canvas is a tool used to document a startup's business model in order to identify areas of strength and potential risk. Its purpose is to help founders determine how the business will generate sustainable revenue from customers in a meaningful way. The canvas’s nine top sections are divided into two sections representing customer-facing elements (value proposition, customer segment, customer relationship) and operational elements (key resources, key activities, key channels). The bottom sections of the canvas represent the financial aspects of the business (cost structure, revenue streams). By mapping out the elements of the business, founders can better understand how the business will operate and how to coordinate goals across all the departments.

An example of uses for the Business Model Canvas is for a new food delivery service. The company's objective is to provide an affordable, convenient alternative to home-cooked meals. Customers can choose from a variety of meals on the company's website and have it conveniently delivered to their door.

The value proposition of the business is providing an affordable yet convenient meal delivery service. The customer segment would likely be working professionals seeking a quick meal solution. The customer relationships the company should encourage are ones of loyalty and customer satisfaction through frequent orders and a great dining experience.

The key resources required could include a kitchen and staff, distribution and delivery, delivery vehicles, packaging materials, and marketing resources. The key activities will have to be preparation of meals, packaging, scheduling and planning deliveries, marketing, and customer support. Key channels of distribution include delivery vehicles, online ordering, and retail partnerships. The cost structure of the business model should include the costs of food, staff, marketing, packaging materials, delivery vehicles, and delivery fees. Revenue streams will come from customers ordering meals, wholesale orders, and partnerships with other food-related companies.

By mapping out the business using the Business Model Canvas, founders can better see how their business operates, how to coordinate goals and operations across departments, and which areas of the business need more attention. By doing this, they can adjust their strategy to better compete and discover opportunities to scale.