The Business Model Canvas: Your Blueprint for Business Innovation

The business model canvas is a great resource for entrepreneurs. It can aid you in establishing an official business plan and help you reach your business goals.

The Business Model Canvas: The Outline


The business model canvas is made up of 9 key parts:

  • Customer Segments
  • Value Proposition
  • Channels
  • Customer Relationships
  • Revenue Streams 
  • Key Resources
  • Key Activities 
  • Key Partnerships
  • Cost Structure

The Breakdown:

Let’s break down each part of the business model canvas.


Customer Segments

Customer segments are used to identify and understand your customer base. You can do this by identifying your target audience(s), then breaking them into groups based on other things like needs, how to reach them, profit opportunities, etc. There are also segmentation strategies which can help you to identify your market. There are different types of markets like mass markets, niche markets, or diversified. The most important thing is to identify your target customer in this step of the process. 


Value Proposition

The value proposition for your business is very important. You need to have something that sets you apart from other businesses in the same industry. Examples of this could be bringing newness to your customers or the industry, improving an existing product or service, or customization. The best question to ask yourself is “What makes you better than others?”. If you can’t answer that question you need to brainstorm ways to make your business stand out among others.



This is all about how you communicate to reach your customer segments. How you communicate to your customers is important because it is part of the customer experience. You want to be providing your customers with the support they need.


Customer Relationships

Having a relationship with your customers is important, especially if you want loyal returning customers. Relationships can range from personal to automated – you have to pick which is best for your customers and your business. Your customers are going to be your brand ambassadors. If they value you, your business will be an extension of them.


Revenue Streams

You need to know how you are making money, how much, how many streams, and how you are pricing things. There are different types of revenue streams like one-time and recurring purchases and many different ways to generate revenue like fees, memberships/subscriptions, and renting are some examples. When it comes to pricing there are two different types: fixed and dynamic. Fixed pricing will always be the same, whereas dynamic pricing changes based on different things like availability, demand, and negotiation.


Key Resources

Key resources describe the most important assets required to start a business. The resources allow you to create and offer a value proposition, maintain relationships and earn revenue. Key resources are physical, financial, intellectual or human. Resources can be owned or leased by the company or acquired by partners.

Key Activities

Key activities are what is going to make your business model work, these are the actions you take to operate a successful business. There are three categories of key activities: production, problem solving, and platform/network. Identifying the key activities in these areas will help you operate a successful business.


Key Partnerships

Every business has partnerships, businesses need other businesses to operate. Having a network of suppliers and partners makes your business model work. Some examples of partnerships would be alliances between non-competitors, cooperation between competitors, and buyer-supplier relationships. It is important to have these partnerships so that you as a business can maximize what you are doing. In having these relationships you can allocate resources (not do everything), reduce risk, and acquire resources. 


Cost Structure

Just like the title infers, cost structure is about describing all of the cost to operate your business model, including the cost associated with key resources, key activities, and key partners. There are two different types of cost structures which are cost-driven and value-driven. Cost-driven focuses on minimizing costs and value-driven is based on creating value. Know the difference between fixed and variable costs when building your cost structure to adjust based on company needs. It would also be very helpful to know categories of costs so you know where you are spending your money.



The business model canvas is a great way to start building your business plan and developing what you want your business to look like and achieve. The model is very flexible and there are other similar models out there to use for your business needs. Start your business off on the right foot by building a business model. 


Written by: Shayla Lofton