Chapter 14 – The Business Model Canvas

As we said, the Business Model Canvas (BMC) is a descriptive model of all the key functions of a business. A business could even have BMC diagrams for their departments or sub-functions (e.g., the Sales Department could have its own BMC). In either case, the BMC will help show how the business plans to succeed and achieve its goals.

The BMC is divided into nine elements as shown in the diagram below. The left half of the diagram is associated with internal functions while the right half of the diagram is associated with external or customer-facing functions, with some overlap.

Let’s briefly describe the BMC elements below.

• Infrastructure
  • Key Activities: What your business does (production, services, internal workings, etc)
  • Key Resources: What you need to perform the activities above
  • Key Partners: People and entities that support your business (e.g., suppliers)
• Offering
  • Value Propositions: Explanation of why you are valuable to your direct customers
• Customers
  • Customer Segments: People or groups who consume your product or service
  • Channels: How you meet your customers (in person, social media, TV, web, etc)
  • Customer Relationships: How you interact with your customers (e.g., self-service, assisted, etc)
• Finances
  • Cost Structure: Costs for the company, such as salaries, utilities, materials (think back to Infrastructure)
  • Revenue Streams: Money you bring in, such as selling products or services