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The business model: defining how your company will create value

The business model describes how you plan to develop and exploit a competitive advantage capable of generating value for your customers. Not to be confused with the business plan!

What is a business model?

Your business model gives an overall description of:

• your company's positioning,
• the objectives of your business,
• the means and resources used to achieve them.

Designing an innovative business model means neither looking to the past nor copying your competitors... but inventing new mechanisms to meet new or hidden needs.

The business model canvas

The “business model canvas”, developed by Alexander Osterwalder and Yves Pigneur, lets you visualise the essential components of your business on a single page: customer segments, value proposition, channels, customer relationships, revenue streams, key resources, key activities, key partners and cost structure.

Note: the results of your field market study should be included in this document. The canvas is not a theoretical exercise; it must reflect what you have learnt from your potential customers.

How to proceed

1. Download the Excel document provided by Fri Up (Lean Start-Up business model canvas with comments).
2. Use the questions in each of the 9 blocks on page 2 to help you fill in the boxes.
3. Do it with others — friends, colleagues, family — to gather as many ideas as possible.