Business Model Canvas

When to use it

Use this tool to visualize how the product or service you are designing will operate and exist as a business.

What’s the purpose

A business model canvas provides a comprehensive but succinct overview of how a business functions. It describes how value is created and acts as a basis for defining, analysing, improving and innovating. The canvas tool can be used either to map an existing model or plan a new direction, making it an essential part of your design toolkit.

How to do it

Using the ‘Business Model Canvas’ template, complete all the blocks following the prompts below:

It helps to begin at the top with customer segments. Think about the demographics and segmentation of your potential target audience and who you have access to. Consider who you’re solving a problem for: their age, gender, and characteristics.
Next, define your value proposition (if you’ve completed a ‘Value Proposition Canvas’ you can copy it across to here). Think about who your solution is designed for and what benefits the solution provides to them. Try writing these as sentences like this: “Our idea helps user X to achieve benefit Y or solve problem Z”.
Now that you know who your target audience is and what value you are delivering to them, outline how you will acquire and maintain relationships with each one.
Next, outline the channels of communication that will be used to ensure that your solution reaches your users. How do users come into contact with your solution?
Then, think about partners. These are the external people and organizations that will help the business to succeed.
After that, you can move onto key activities, the most important things that the business needs to do well, and key resources, the assets (material and people) needed to deliver the activities of the business.
Finally, complete the lower sections: cost structure, which includes any expense incurred as a result of operating the business model, and revenue streams, which is any financial gain as a result of operating the business model.

Helpful tips

Some areas will be speculative at this stage. That’s okay. As you work through the canvas, keep a note of the areas that could be improved and come back to these when you have completed the full canvas.

Using this method in your day-to-day work

Evaluate your current business model today by working through the template. Share it with your team and allow them to adjust and iterate it. Highlight key areas to work on - you can traffic light these with red, amber and green dots to show areas of strength or vulnerability. Print this out and hang it on the wall and review it regularly. Treat it as a living document.