The Business Model Canvas

channels

Section of the Canvas that includes ways of attracting customers, communicating with them, and delivering your product/service. Could be stores, websites, sales/customer service people, advertising

customer relationships

Section of the canvas that describes what kind of relationship you have with your customers. Could be personal assistance, automated services, etc.

cost structures

Section of the canvas that looks at the biggest costs for the business and if those costs are variable, fixed, cost driven, value driven, etc.

revenue

income from sales; the money a business acquires through sales, subscriptions, rental fees, advertising, etc.

variable cost

type of cost that depends on how much you produce - the more you produce, the more you have to pay

costs/expenses

all the money a business must spend in order to keep operating and deliver value

value-driven

business model focused on making high-end, high-quality products that people will be willing to pay high prices for.

cost-driven

business model focused on making no-frills products that can be sold for a low price

niche market

means that a business is focusing in on a particular group of customers - like skiers, or parents, or millionaires, or farmers

mass market

means that a business is not focusing on a particular customer segment but is selling to everyone.

business model canvas

one-page diagram designed by Alexander Osterwalder that allows you to plan out a "rough draft" of a business.

profit

revenue - expenses; the money a business gets to keep after it has paid its bills

revenue streams

section of the canvas that considers how much your customer is willing to pay, and how your customer will pay.

customer segments

section of the canvas that defines who you are selling to, including their needs/wants and defining characteristics

value proposition

section of the canvas that encapsulates why a customer would choose you over someone else. It explains what your product does to solve a customer want or need and what makes it stand out - could be convenience, low price, high quality, great design, status symbol, customization, etc.

key activities

section of the canvas that lists the actions a business must regularly take in order to operate. Could include design, delivery, manufacturing, programming, maintaining website, etc.

key resources

section of the canvas that lists the main things you will need to possess in order to make the business work - land, equipment, skilled employees, patents, money, etc.

key partnerships

section of the canvas that lists the other businesses that you will need relationships - buyers, suppliers, and others with whom you might partner or share resources.

fixed cost

type of cost that does not change no matter how much or how little you produce. For example: rent for your buildings, pay for your janitors

co-creation

type of customer relationship in which you allow your customers to generate valuable content - examples include people writing helpful reviews on Amazon or YouTubers posting videos

self-service

type of customer relationship in which you have no personal contact with your customer, but have it set up so they can help themselves (like a self checkout or a self-service car wash)

automated services

type of customer relationship in which you have no personal contact with your customer, but use technology to provide personalized service - like Netflix recommendations or online banking

personal assistance

type of customer relationship in which you or an employee are communicating directly with the customer, whether in person or over the phone