Business model

The Business Model Canvas, explained simply

The Business Model Canvas describes a business model in nine building blocks on a single page: customer segments, value proposition, channels, customer relationships, revenue streams, key resources, key activities, key partners and cost structure. Its purpose is not documentation but exposing untested assumptions.

The customer segments block needs a number: sizing your market with TAM, SAM and SOM →

Below are all nine blocks, each with the question it answers and a filled-in example. The example runs through the whole article: a mobile bicycle repair service in Portland.

Customer segments

Who do you create value for?

ExampleWorking cyclists in Portland who have no time to visit a repair shop

Value proposition

Which problem do you solve, better than others?

ExampleBike repair at the office or at home, appointment within 24h, fixed price

Channels

How do you reach your customers?

ExampleOnline booking, Google search, company partnerships, sticker on the bike after every service

Customer relationships

How do you win and keep customers?

ExampleAnnual-inspection reminders, subscription for frequent riders, a personal regular mechanic

Revenue streams

What do customers pay for, and how?

ExampleFixed price per repair ($49–149), maintenance subscription $15/month, company contracts

Key resources

What do you absolutely need?

ExampleEquipped cargo bikes, tools, 2 mechanics, a booking system

Key activities

What must you do well, permanently?

ExampleRepairs, route planning, spare-parts logistics, appointment management

Key partners

Who do you need at your side?

ExampleSpare-parts wholesaler, companies with bike fleets, bike shops without mobile service

Cost structure

What are the biggest costs?

ExampleWages, spare parts, cargo bikes (leasing), software, marketing

Zooming into blocks 01 and 02: the Value Proposition Canvas, making offer and customer meet →

Practical tip: write each entry as an assumption ("We believe that …") and mark it green once real customers have confirmed it. A canvas with nine green fields is worth more than any 40-page plan.

Frequently asked questions

When should I create a Business Model Canvas?

As early as possible, but in pencil: the canvas is not a finished plan but a collection of assumptions you test in the market step by step. Before investing the first euro, every one of the nine fields should hold at least one tested assumption.

What is the difference between a Business Model Canvas and a business plan?

The canvas fits on one page and shows the logic of your business model at a glance, ideal for early stages and fast iteration. The business plan is a detailed document with multi-year financials that banks and grant bodies typically require.

Which field is the most important?

The value proposition combined with the customer segments, the right half of the canvas. If nobody has the problem urgently enough, or your solution is not clearly better, perfect partners and channels will not save you.