The Business Model Canvas is a template that is very popular with companies and organisations that are following the lean startup methodology and working toward new, innovative approaches to grow their businesses. The Business Model Canvas was created by Alexander Osterwalder in 2008, but since then, many variations have been implemented, as well as models designed for particular niches within the professional world.


But what exactly is a Business Model Canvas? Envision what is typically a single sheet that will align the company’s infrastructure, value proposition, customers and finances, to name a few. It is divided into nine different blocks, so that it is simple to see the important elements of an organisation — all in one glance.


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Business Model Canvas explained

Having the Business Model Canvas explained properly and thoroughly explained can help leaders see the best ways in which to apply it to a particular type of business. Therefore, it’s important to first understand the type of information that is included in the model. As mentioned, there are particular facets of an organisation that can completely paint a picture of how successful it can be — with the right leadership and the determination to take the necessary steps toward innovation. But perhaps most importantly, it makes the business’ model completely transparent, and therefore much easier to realise.



Value Proposition

The value proposition encompasses determining what you have to offer to your customers, whether it is to solve a problem or fill a need. Perhaps a customer requires a certain type of informational technology in order to start a new process, or maybe a product is needed that is in high demand for safety. Whatever the case, a company must fully understand by creating the product or designing the service, what problem has been solved, and who this will appeal to as a customer.



In this segment, it is important to not only understand the type of customer that your product or service may attract but to really understand them. What is their demographic, where are they located, and how receptive will be they be to different areas of the Business Class Model? During innovation, this may also be the moment where there is a pivot in the focus of a particular type of customer to another altogether.



This is all about delivering value. How will the product or service get into the hands of the customers? Will this be done mostly physically, via deliveries, or will there be downloads of other exchanges of valued information?



In a business, there are few things as important as the relationships that are built between a company and its customers. In this area of the model, it’s best to understand exactly what the plan is in regards to attaining customers, providing a value to them so that they will remain customers, and developing new ideas on how to involve them even more in other products or services that may be of benefit to them and will incur additional revenue.



Speaking of revenue, how is it that the business actually makes money? What is the strategy to create a service or a product that a client will be willing to pay for — hopefully on a residual basis? Flexibility and the willingness to make changes will be extremely important at this level, ensuring that the business is offering something that is of value and will eventually be in high demand.



As with any venture, certain resources will be required to achieve a successful plan. But what will these resources include? Information? Finances? Offices and other structures? A dedicated team?



Who can actually help leverage the model? All organisations will need to work with outside sources, whether that be suppliers, investors, actual business partners or companies from which to attain highly skilled employees. Also, will these partners be long-term or short-term? Will you need them from the beginning, or will they become important only during certain stages of the company’s progression?


Key Activities

To have a successful organisation, it’s imperative to determine areas of absolute expertise. If an online wholesaler is hoping to add a new product to an e-commerce store, then information on that product must be acquired at an expert level. If a business is offering a course or a study, then they must be extremely knowledgeable in that niche.



This may be the most obvious of all of the nine blocks of the Business Model Canvas. How much is all of this going to cost? Once there’s a set model and a plan of action to go along with it, the final step is to ensure that there are funds to pay for it all, negotiations occurring with an investor or ideas on how to raise seed money. Try to determine the closest number to a bottom line as possible, and then assess from there.


Business Model Canvas Examples

There are numerous Business Model Canvas Examples, especially since each company can model their canvas after their specific goals and what they hope to achieve. A big factor in designing and implementing a Business Model Canvas can be how innovative a business or an organisation is at the current time, along with the company’s intrapreneurship culture. This can be easily reflected in the steps that are taken throughout the Business Model Canvas, as well as the end results.


Each Business Model Canvas can change, as long as the nine building blocks are present so that the proper information can be attained. However, a good example is to adapt the canvas to fit a particular product or a market, or to fulfill a certain chain of supply and demand. As long as the basic information is included and understood, the Business Model Canvas can be designed with any business or organisation in mind.


Setting up a Business Model Canvas will ensure that a company’s overall goals are clear and obvious to everyone on the team, laying the groundwork for growth and ensuring that the steps are easily understood and can be followed by anyone — from interns to C-Level members of the organisation. In short, a Business Model Canvas keeps everyone on the same page, and when the path to a positive outcome is in full sight, it may be reached even faster and with more decisive intent.

Explore AfCE’s toolbox where you download our canvas for free.