The Business Model Canvas is a simple tool for analyzing and optimizing your business growth: here I explain what it is, how it is made, and why it can be useful for your business.

Valerio FiorettiWhat is the Business Model Canvas? What it is used for and why

Would you like to be able to list on one sheet of paper everything you need to develop, manage, market, and sell your product?

Oh yes, that would be very ingenious!

Not least because, if you've ever found yourself planning a new business venture-any kind-you know there are a lot of elements to consider: finding a centralized, essential overview can be quite complicated.

What if I told you that it is not utopia, but reality?

That's right: there is a real preset template that at a glance allows you to have the entire structure of your business clear in front of you.

It can be useful to you whenever you find yourself with a new business idea, but you don't know how to implement it, or you would like to improve your existing strategy, or finally you simply feel overwhelmed with writing your business plan.

It's called the Business Model Canvas and it's a fantastic tool that concentrates on a single page-yes, you read that right, a single page-the most important strategic details needed to successfully bring your company (or product) to market.

In a nutshell, it puts in black and white in a concise way how you intend to make money from what you do, considering customers, value proposition, partners, costs, etc. 

But let's cut to the chase: read on to learn more and find out what a Business Model Canvas looks like, how it can help you, and why.

What is the Business Model Canvas

We owe the invention of the Business Model Canvas to Alexander Osterwalder, a Swiss entrepreneur and consultant, who went on to help spread it somewhat around the world.

What exactly is it all about?

We can call it a visual strategic management tool, useful for quickly and easily defining and communicating a business idea or concept.

It may perhaps seem like something complex or articulate, but as I mentioned earlier it is actually a one-page document (yes, just one!).

On one sheet, it offers a general overview of all the elements you need for the growth and success of your business (we'll look at them one by one in a moment), in a simple and structured way.

It includes information about the customers you target, what value propositions you offer, through what channels, and how substantially your company makes a profit.

Whether you want to update your existing strategy or develop a completely new one, it helps you keep an eye on all the important information you need to evaluate and consider in order to successfully bring your business to market.

It is an effective alternative to the traditional business plan, which is usually presented in long, multi-page documents.

The ultimate goal of using the Business Model Canvas is to gain a better understanding of one's target customer base, how to make a profit, and how to provide a value proposition unique. 

Business Model Canvas: what it looks like

So what do you find in the Business Model Canvas?

Here is the original template of (the company founded by Osterwalder himself): 

business model canvas

As you see there are nine boxes, each for the different elements underlying business development. 

On the right side are those related to the sphere of the customer or market (which we can call external factors, because they are outside your control), while on the left side you find the data that concern the business activity (internal factors).

Both external and internal factors come together around the value proposition, that is, the exchange of value between your company and your customers.

In total, the constituent elements of the Business Model Canvas are thus as follows:

  • Value proposition
  • Customer segments
  • Channels 
  • Customer relations
  • Key Activities
  • Key Resources
  • Main partners
  • Cost structure
  • Revenue streams

Let us briefly look at them one by one.

#1 Value proposition

It is the beating heart of your business: it answers the question, "What do you offer your customers? What needs of theirs are you able to satisfy with your products or services? What do you bring back into their lives, making it easier for them?"

As you see, the value proposition has to do not so much with the characteristics of your offering, but rather with the needs and wants of your target audience that you, with your business, are able to satisfy.

Without it, your business loses meaning and it will be more complex for customers to identify with your brand e fidelity: is what they need as a reason to turn to you and not to someone else.

Ps. A super useful tool for developing your value proposition is the value proposition canvas: here I'll explain what it is e here you can find the guide for filling it out instead.

#2 Customer segments

This section answers the question: to whom do you turn?

It is the consumer whose problem you intend to solve as stated in your value proposition: here you describe its main characteristics and current and future needs.

This point can also include the size of your market and the various types of target segments you can identify within it.

#3 Channels

The question here is: How do you communicate with your customer? How do you get the value proposition to them? What distribution channels are most effective for you?

Whether it is through social media, articles from the blog, email marketing, the affiliates or the referral, paid ads, live events...

In short, considering the previous two points, this section defines the best way to reach your audience.

#4 Customer relations

Okay, after defining the value proposition and better understanding the customer segments, you need to ask: What is the relationship with your customers? How is it manifested and how is the relationship maintained?

It is how you interact with them, offer support and assistance, and support the development of your community. You can do this in person, in person or online, or by relying on others, using direct contact, through email or chat.

This point also includes how customers first came to you and how you were able to keep them loyal over time.

#5 Key Activity.

Here you define your business: what do you do concretely to realize and make available your value proposition? 

This section includes the activities needed to make your model effective and successfully connect with customers: investment, research and development, marketing, and so on.

#6 Key Resources

Here you are dealing with the resources you need to deliver the value proposition and meet the customer's needs: it's about the people, knowledge, means, and money you need to run your business and how you can go about getting them, if you don't already have them.

#7 Main Partners

Partners encapsulate all the companies, suppliers or other external parties you may need to carry out your activities and provide value to consumers, gaining a competitive advantage.

This answers the question, "If my company cannot realize the value proposition on its own, who else should I rely on to do it?"

Calculate that surviving alone is virtually impossible-that's why identifying and nurturing partnerships is essential to the long-term survival of any business. 

#8 Cost structure

This section describes the costs of developing and producing your product or service (the cost of the activities and resources required), whether fixed or variable.

It concerns, for example, how much you plan to spend on marketing and product development, how you plan to manage the financial data in your business plan, how you plan to structure the pricing of your offering, and so on.

#9 Revenue streams

So here is the last point, simple but not trivial: how you make money, that is, where your profits come from.

In fact, revenue streams refer to the way your business converts the value proposition into financial gain-they are effectively how you make a profit and the exact "location" from which this money comes.

There could be several: direct sales, subscriptions, licenses, partnerships, etc., and may also include information about any product or service offered for free.

Why is the Business Model Canvas useful?

Very well: now that you understand what the Business Model Canvas looks like, let's get a good understanding of why it is so useful.

What is it basically for?

Like all things, there is no one rule that always applies: such a tool can be used by companies for various purposes.

Someone may use the Business Model Canvas to map competitors for competitive analysis or as a means to discover untapped opportunities in the marketplace. Someone else to ensure alignment between the company's partnerships, activities, and value proposition and to ensure that it meets customer needs. And so on.

in general, we can say that you need it to get a bit of the picture when you want to develop new business ideas, explore potential business opportunities, or simply revamp your existing strategy.

That said, the Business Model Canvas is particularly useful because of several advantages:

  • Offers a picture of the business at a glance: It encapsulates in a single one-sheet document all the basic information underlying your business;
  • is simple and straightforward: allows you to have an immediate understanding of what is described, allowing you to focus on the most important details;
  • Is accessible to all and easily shared: not only can it be accessed from anywhere, but stakeholders can easily refer to it while making decisions;
  • enables rapid improvements: you can easily see how each part of the company performs relative to a larger structure, so that it is easier to point out flaws or identify solutions, making strategic improvements accordingly;
  • is flexible: in addition to being applicable to any type of business, you can change the information contained over time, adapting it from time to time to changes in the market or your needs.


So what do you think?

Overall, as I mentioned earlier, remember that the Business Model Canvas is an adaptable and modifiable tool-nothing is set in stone and should be modified when external conditions require it.

It is a real "living document" that you can revisit and use to find the most effective alternatives.

With a clear idea of your goals, a keen eye for detail and a readiness to refine it, you can use the Business Model Canvas to fine-tune your best value proposition every time.

Try it to believe it!

But tell me, were you already familiar with this tool or have you ever used it?

Let me know in the comments!

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