What is a Business Model?

<aside> 💬 “A business model describes how your company creates, delivers and captures value. Or in English: A business model describes how your company makes money.”

- Steve Blank (Entrepreneur & Author)

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<aside> 💬 “Think of a business model as a drawing that shows all the flows between the different parts of your company. A business model diagram also shows how the product gets distributed to your customers and how money flows back into your company. And it shows your company’s cost structures, how each department interacts with the others and where your company fits with other companies or partners to implement your business.”

- Steve Blank (Entrepreneur & Author)

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The Business Model Canvas

The Business Model Canvas (BMC) is a strategic management tool designed to help founders visualise and design their business models. By breaking a business down into its key components, it provides a comprehensive overview, enabling clearer understanding and strategic planning. While the BMC is invaluable for many businesses, we recommend that early-stage startups use The Lean Canvas (see below).

Sections

Customer Segments: Who are your customers?
Value Propositions: What unique value do you offer?
Channels: How do you reach your customers?
Customer Relationships: How do you interact with customers?
Revenue Streams: How does your business earn money?
Key Resources: What assets are essential?
Key Activities: What crucial actions must you take?
Key Partnerships: Who are your strategic partners?
Cost Structure: What are your major costs?

The Lean Canvas

The Lean Canvas is a simplified version of the Business Model Canvas, tailored specifically for early-stage startups. It focuses on identifying and solving customer problems, allowing you to validate your business idea quickly and efficiently. Based on Eric Ries' Lean Startup methodology, the Lean Canvas emphasizes the importance of Customer validation in the startup process. Your initial ideas are merely hypotheses until you go out and speak with potential customers. At the core of the lean startup is the Build-Measure-Learn feedback loop. Everything you put on the Lean Canvas should be tested. Treat it as a dynamic document that evolves as you build, measure, and learn from your experiences and customer feedback.

You can duplicate and use our Notion template below

Lean Canvas

Alternatively, you can download our pdf below:

ℹ Created by the Edinburgh Innovations Student Enterprise Team, the above is a downloadable and editable PDF for your use.