Business Model Canvas

What is a business model canvas (BMC)?

In today's fast-paced business world, clearly and concisely visualizing your organization's operating model is vital to success. That's where a business model canvas (BMC) comes in.

A business model canvas is a strategic tool used to visualize, create, and evaluate business ideas and models. A business model canvas is a visual representation of your business's key aspects. You use it to identify opportunities for growth and improvement and to maximize revenue potential.

Who uses a business model canvas?

A BMC is a useful tool for anyone who wants to improve their operating model. This can include key aspects like how to make money from your product or service, exploring new markets for expansion, or refining existing processes. A BMC makes it easy to understand and reach your objectives.

When to use a business model canvas

Now that we've explored why businesses are turning to a business model canvas for their strategic planning, let's look at some real-world examples. Here are three popular use cases for a BMC:

Developing a new business model

A BMC helps develop an operating model for a new venture. It can identify critical components and explore potential opportunities.

Refining an existing business model

Established businesses can use a BMC to refine their current operating model. It also helps to identify ways to optimize processes, reduce costs, or expand into new markets.

Validating assumptions

Startups looking for funding often use a BMC as part of their pitch to validate assumptions about their product or service offering.

Benefits of using a business model canvas

A business model canvas has a wide range of benefits to offer businesses of all types and sizes. Here are five key advantages:

1. Provides a structure for ideation

A business model canvas is a way to think about building a successful business. It separates the business into different pieces, like customer segments, revenue streams, and key activities. Using a BMC enables you to analyze each aspect of your business systematically.

2. Your value proposition is at the center

Your value proposition is the most important part of your business model. If you know it well, you can build your business model around it. Then, with the BMC, you can make sure every component delivers toward the unique value that sets your business apart.

3. Visual framework

Using a visual structure like the BMC makes it easier to understand how the different parts of your business are connected. The BMC will help you identify where you might need more resources or how you can optimize your current resources. Or you can use this visual format to easily explain your business model to stakeholders who aren't as familiar with the intricacies of your industry.

4. Complete view of your business

A BMC lets you see your business as a whole. Working through the different aspects of the BMC will help you understand how each contributes to your success. This complete view also helps you identify dependencies and risks, which can help you plan and adjust more effectively.

5. Everything is combined in one visual

The best thing about using a business model canvas is that it's in one visual which shows the key components of your business in a concise, easy-to-understand way. Having everything in one visual also makes collaborating with team members or stakeholders easier, making sure everyone is on the same page.

How to complete the BMC

Miro's BMC template can help you better understand your business. This template lets you explore the key components of your business using sticky notes. To start, go to the business model canvas template and complete each section.

Key partners

To make a business model canvas, identify the key partners needed to make your business model work. Think about suppliers, distributors, or other entities that could help your business run more smoothly or effectively. Consider the nature of these partnerships, how they benefit your business, and how you'll maintain those relationships over time.

Key activities

The key activities section of a business model canvas lists what your business needs to do to deliver value to your customers. Think about the core activities required to create your product or service, plus any supporting functions like marketing or accounting. When completing this section, focus on high-level activities and avoid getting bogged down in the details.

Key resources

This section of a business model canvas refers to the assets of your business. These might include physical resources like equipment and inventory or intangible assets like intellectual property or human capital. Consider which resources are critical to your business success and how you can best leverage them to achieve your goals.

Key proposition

The key propositions section of a business model canvas describes your business's value proposition. Think about what benefits your product or service provides customers. Then think about how it differs from what's already on the market. This section allows you to differentiate yourself from competitors and position your business for success.

Customer relationships

Identify how your business interacts with its customers in the customer relationship section. This section could include direct communication channels like email or social media. Also consider indirect customer loyalty programs. When completing this section, think about building trust and maintaining a positive relationship with your customers throughout each stage of the customer journey.

Channels

The channels section of a business model canvas describes how customers will interact with your business. It also describes the sale channels for your product or service. Think about online and offline channels and how each channel is used at different stages of the customer journey. When completing this section, focus on the channels that'll be most effective for your target audience.

Customer segments

The different groups of customers your business serves are described in the customer segments section. Think about each segment's needs or problems and how your product or service can address those needs. When completing this section, clearly define your target audience and consider potential future segments.

Cost structure

The cost structure section of a business model canvas lists expenses your business has. These include materials, labor, marketing, or technology. Consider fixed and variable costs and how your business can spend efficiently to maximize efficiency.

Revenue streams

If you have a business, you need to figure out how it makes money. Think about how you'll make money from your product or service. Your revenue streams may change over time as your business evolves.

Time to build your own business model canvas

A business model canvas gives businesses a structure and focus to help create clarity within their business plan and operations. Using a BMC, you can better understand how your business functions while setting yourself up for success.

So what are you waiting for? Use Miro's business model canvas template to create a high-level overview of your operating model and work towards realizing your organization's full potential.