Developing a Business Idea Using the Business Model Canvas
Senior 3 · Entrepreneurship
Developing a Business Idea Using the Business Model Canvas
Lesson 2 of 4
22 min
In lesson 1, Ishimwe needed answers to several questions at once: who her customers are, what she offers them, how she reaches them, and whether she will earn more than she spends. Writing these in long paragraphs makes it hard to see how they fit together. The Business Model Canvas puts them on one page, in nine boxes, so the whole business can be seen, discussed and changed at a glance.
The canvas was developed by Alexander Osterwalder with Yves Pigneur and made widely known by their book Business Model Generation (2010). It is now used by start-ups, large companies, cooperatives and charities around the world.
Definition
Business Model Canvas (BMC): a one-page visual template with nine building blocks that describes how a business creates value for its customers, delivers it and earns money from it.
Building block: one of the nine boxes of the canvas, each answering one key question about the business.
Value proposition: the bundle of benefits that a product or service offers to a customer group: the reason customers choose it.
| Block | Key question | Example: an intercity bus company |
|---|---|---|
| Customer segments | For whom do we create value? | students, traders and workers travelling between two towns; people sending parcels |
| Value propositions | What value do we offer each segment? | safe, on-time, affordable trips; parcels delivered the same day |
| Channels | How do we reach and deliver to customers? | bus stations, ticket offices, phone booking |
| Customer relationships | How do we win and keep customers? | polite staff, a helpline, reserved seats for regular travellers |
| Revenue streams | How, and how much, do customers pay? | a fare per trip; a fee per parcel |
| Key resources | What must we have? | buses, trained drivers, an operating licence, ticket offices |
| Key activities | What must we do well? | running trips on time, maintaining buses, selling tickets |
| Key partners | Who helps us? | fuel suppliers, garages, the bus-station operator, an insurer |
| Cost structure | What are the main costs? | fuel, wages, repairs, insurance, station fees, loan repayments |
The right side of the canvas is about customers and value; the left side is about what the business needs to deliver that value; the bottom row is about money. Each block affects the others: more parcels (a new value proposition) need storage space (a resource) and add revenue (a revenue stream).
Worked example 1: reading a canvas
Use Osterwalder’s YouTube sketch. (a) Name the customer segments. (b) What value does each get? (c) Who pays?
(a) Advertisers, users who produce videos, and viewers. (b) Viewers get free videos; producers get an audience for their videos; advertisers get the attention of a large audience. (c) Advertisers pay; viewing is free.
Lesson: a business can serve several customer segments, and the segment that pays need not be the one that uses the service most. Such a business is called multi-sided.
Business Model Canvas Explained, from Strategyzer, the company founded by the canvas’s creator. Watch for the order in which the blocks are filled in, and compare it with the steps in lesson 4.
Its limits: a canvas has little detail on figures, timing and competitors, and every box holds guesses until they are tested. It does not replace a business plan, which lesson 3 describes.
Tip
Memory hook. Read the canvas right to left as a story: “For these customers, we offer this value, through these channels and relationships, and they pay us this revenue. To deliver it we need these resources, activities and partners, which create these costs.”
Worked example
Worked example 2: which block? Place each of Ishimwe’s notes in a block.
| Note | Block |
|---|---|
| “Families who cook stews and sauces in town” | customer segments |
| “Tasty tomatoes all year, no waste, keeps for months” | value propositions |
| “Packets sold through two grocery shops and by phone order” | channels |
| “Frw 1,000 per packet” | revenue streams |
| “A solar dryer and a packet sealer” | key resources |
| “Market sellers supply soft tomatoes” | key partners |
| “Buying tomatoes, packets, transport” | cost structure |
Warning
Common mistakes. (1) Mixing up channels (how the product reaches customers) with customer relationships (how customers are won and kept). (2) Writing “everyone” as the customer segment: a canvas needs specific groups. (3) Treating a finished canvas as proof: until the ideas are tested with real people, every box is an assumption.
Practice
Sources and credits
Written by Ganzaa: the tables, the worked examples and the practice items. The bus company and Ishimwe’s notes are illustrative (2026).
This lesson adapts CC BY-SA material and is shared under CC BY-SA 4.0.
