Business Model Canvas: Definition, Elements, How to Create, and Examples

Running a business requires the best possible planning. One way to prepare is to use the Business Model Canvas. Have you ever heard of this one business design mockup? Many companies use the Business Model Canvas concept, especially for those who are just starting a business. Entrepreneurs generally use this business model by growing their business in a more efficient way to reach their target market.

For more information about this business model, see the full explanation below!

Definition of Business Model Canvas

A business model canvas, also known as a business model canvas, is a company's internal management strategy that easily maps out consumer, financial, and infrastructure goals on one page. This is a peculiarity compared to the usual business plan format, which is usually written on a sheet of paper.

Therefore, it is not surprising that the Business Model Canvas is the model for business planning for many startups. Although more compact, each panel must contain several supporting members. Thus, the representation flows from one component to another until the end. 

Key Elements of the Business Model Canvas

1. customer segments

Customer segment means you need to determine which user segment your company is targeting. Target consumers can be divided into different segments according to needs, such as age, gender, hobbies or level of consumption.

2. value proposition

Simply put, a value proposition is the selling point of a product/service that makes users decide to buy/rent it from your company. An example is what the user needs. If you give them what they need, they will buy the products your business sells.

In the Canvas business model, value proposition can also be a solution to user problems. Either a solution that hasn't existed before, or a solution with a new, more efficient approach. So try to create a unique selling proposition for your store.

3. Channel

The Business Model Canvas channel is a means of interaction between users and your business, whether to promote sales, purchase the products and services offered, or even respond to complaints.

The most common example of a canvas business model that uses this element is social media, where companies can interact directly with their users to share important information or respond to complaints.

4. Customer Relations

Customer relationship helps you choose the best strategy for interacting with customers. Not only about when the product is marketed or during promotions, but also how to respond to complaints and how to make consumers reluctant to buy the product. 

5. Revenue Streams

Revenue streams are a source of income for companies. In this element, you need to know where and how the company generates its revenue.

6. Key Activities

Key activities are all functions related to business productivity related to the product, with the main task of creating a value proposition for the product. 

7. Key Resources

Key partnership is a BMC element that contains a list of resources that a company must design and implement to achieve its value proposition. It implements the most important functions.

8. Key Partnerships

Key partnerships are a list of external resources that you will need to make your current business model work. 

9. Cost Structure

Cost structure is the financial system that finances the company's operations. How much money must be spent to manage business operations per day? What is the cost of the resources consumed? What is the market price of this product? 

How to Create a Business Model Canvas

Even though it looks simple, there are several steps that must be taken to do it. How to create a business model canvas is as follows.

1. Do a Competitor Analysis

The first step in creating a business model is to analyze the strengths and weaknesses of companies in the same industry. That way you can see their successes and failures, and identify what deficiencies can be addressed.

In addition, this information allows you to take innovative steps to reach and target markets better than your competitors. 

2. Sort Elements Systematically

The next step in creating a business model template is to systematically arrange the nine elements above. For example, let's start with customer segmentation, followed by channels, defining a timeframe, etc.

3. Make Sure All Elements Support Each Other

Equally important when creating a business model template is ensuring the nine elements support each other, resulting in a chain of processes. This makes the implementation process easier.

4. Do a Review

The next step after completing the business model template is to review and re-evaluate possible future implementations. If necessary, you can ask for an assessment from a trusted mentor or third party. 

Example of How to Use the Business Model Canvas

To understand even more, this time we offer several examples of business model materials from various industries as illustrative examples:

1. Example of a business model Gojek Canvas

Below is an example of an online delivery service business model:

One thing is different Gojek with transportation service providers in general is a significant resource. If in general transportation service providers need to have assets in the form of vehicles and also a large parking area, the company Gojek don't need it. Because of the business model Gojek offers new value when the service relies on partner drivers with their own vehicles. This is one of the reasons why the business model Gojek seem more efficient and can offer a lower price. 

2. An example of a business model canvas for a food company

Below is an example of a business model canvas for a food company. If your business is engaged in the culinary field, the example below is a simple example that you can apply. All you have to do is adjust the segmentation to your target business customers. Then combine it with other elements. 

So that's a summary of the Business Model Canvas from understanding to examples. Hope it is useful!