Your idea meets a need. Can it also become an economically viable business? A business model describes whom you create value for, how you deliver it and how the business earns money. It connects customers, the offer, revenue and the resources required.
There is more to it than choosing between individual sales and subscriptions. Two companies may sell a similar service at a comparable price while using very different models: one customises every job and spends substantial time on sales; the other standardises its offer and relies on partners to find customers.
At a glance
- A business model connects customer value, revenue and the organisation needed to deliver it.
- The Canvas makes assumptions visible; completing it does not establish viability.
- Test willingness to pay, the actual service cost and your ability to deliver.
What is a business model?
A business model explains how the business works. Complete this sentence to describe it simply: “We help this customer achieve this result, using this organisation, and we are paid in this way.”
A cleaning company might serve offices close together, with recurring contracts and planned routes. Another might specialise in one-off cleaning after construction, assembling teams for quoted jobs. The trade looks similar, but prospecting, scheduling, equipment, pricing and cash flow differ.
How it differs from a business plan
The business model describes the mechanism. The business plan explains implementation: timing, organisation, objectives, financial forecasts and funding. Clarifying the model first generally makes it easier to develop the plan.
A completed Canvas sets out choices and assumptions. Evidence of viability comes from customer behaviour, sales and the ability to deliver at the expected cost.
Start with the customer and the problem
A business model becomes hard to understand when the target is “everyone”. First choose a group whose needs and behaviour are similar enough to support a relevant offer.
A photographer might serve individuals, estate agencies or companies recruiting staff. These customers buy for different reasons, compare different criteria and make decisions differently.
Distinguish user, buyer and decision-maker
In a small business, one person may fill every role. In a larger organisation, the software user, budget approver and contract signatory may be different people. The offer needs to address their respective expectations coherently.
Ask the people involved about their current situation: what they do, what takes time, what blocks them and what they have tried. “Would you buy my service?” easily prompts a polite answer. “How did you solve this problem last time?” produces more concrete information.
Make your value proposition verifiable
“Quality service at a competitive price” could describe almost any business. A useful proposition specifies the benefit, context and grounds for confidence. For example: “Planned IT maintenance for small practices without an internal IT manager, with a named contact and a clearly defined service scope.”
Do not promise turnaround times, savings or outcomes you cannot deliver. The commercial promise must match the organisation, price and planned resources.
Understand the nine blocks of the Business Model Canvas
The Business Model Canvas, developed by Alexander Osterwalder and Yves Pigneur and distributed by Strategyzer, organises the model into nine blocks. Use these practical questions to prepare your answers; the boxes do not need equal amounts of text.
| Block | Working question |
|---|---|
| Customer segments | Whom do we want to serve first? |
| Value proposition | What useful outcome do we provide? |
| Channels | How do customers discover, buy and receive the offer? |
| Customer relationships | What support do they expect before and after purchase? |
| Revenue streams | Who pays, how much, for what and when? |
| Key resources | Which essential resources does delivery depend on? |
| Key activities | What must we do particularly well? |
| Key partners | Who makes an essential external contribution? |
| Cost structure | Which costs make the whole model work? |
The connections between the blocks make the Canvas useful. Extensive personalised support must be reflected in resources, activities and price. If a distributor brings you customers, its remuneration and bargaining power belong in the model.
Use Strategyzer’s official template as a working document. Date each version and mark assumptions still needing validation. Keep it easy to update.
For the customer and channel blocks, work through customer segmentation and targeting and the comparison of distribution channels. These choices should reinforce the same value proposition.
Worked example: subscription IT maintenance
Consider a fictional company planning IT maintenance for small professional organisations in French-speaking Switzerland. The example illustrates connections between the blocks; it is neither market research nor a recommended price.
The customer, promise and relationship
The initial target is small organisations without an internal IT manager, within a limited geographical area. The owner decides and pays; employees use the equipment and request support.
The offer aims to prevent common incidents, organise updates and provide a contact for requests covered by the contract. The business does not promise continuous availability without a suitable team. It defines support hours, covered equipment and treatment of out-of-scope work.
It finds initial customers through professional contacts, local partners and a website that explains the offer clearly. The relationship starts with an assessment and continues through regular follow-up. Major emergencies need a separate procedure that customers understand.
Revenue, resources and costs
| Element of the fictional model | Initial choice | Point to test |
|---|---|---|
| Revenue | Monthly subscription plus separately quoted services | Do customers understand and accept the scope? |
| Resources | Technical skills, secure tools and available time | Does service remain reliable during absences? |
| Activities | Prevention, support, documentation and customer follow-up | What is the actual workload per customer? |
| Partners | Backup provider and software suppliers | Response times, responsibilities and contractual terms |
| Costs | Working time, licences, travel, insurance and sales | Which costs rise with customer numbers? |
Assume a subscription of CHF 400 a month, excluding VAT. Direct customer service costs are estimated at CHF 160 a month, including the value of delivery time. This leaves CHF 240 in contribution towards other fixed costs and profit.
With CHF 6,000 of additional monthly fixed costs, the simplified break-even point would be 25 customers: 6,000 ÷ 240. The business must also be able to serve those 25 customers using the budgeted resources. If support takes twice the expected time, the initial calculation no longer holds.
What this example helps you decide
Beyond finding more customers, the business needs to establish who fits the package, which requests are included and at what volume extra staff will be needed. A regularly paying customer can still be unprofitable if their needs consistently exceed expectations.
The priority test is to measure time spent on a few pilot customers, check satisfaction and observe out-of-contract requests. This evidence helps adjust the offer before adding many subscriptions.
Choose how to charge
Charging should match the value provided and the way the business operates. Copying a subscription because it appears reassuring can create expensive service commitments. Conversely, hourly billing can make it harder to capture the value of a standardised service you deliver efficiently.
| Revenue model | When to consider it | Challenge to anticipate |
|---|---|---|
| Unit sales | A defined product or service | Generating repeat purchases regularly |
| Time-based billing | Work with a variable scope | Limited capacity and comparison based on hourly rates |
| Fixed fee | A sufficiently defined deliverable | Scope creep and unplanned revisions |
| Subscription | Recurring needs and ongoing service | Support costs and customer cancellations |
| Commission | An identifiable introduction or transaction | Volume dependence and allocation of responsibilities |
| Licence | The right to use an asset or solution | Protection, maintenance and usage terms |
You can combine revenue streams, but keep the price list understandable. Customers need to know what they are buying and what triggers an extra charge. Each revenue stream should correspond to a known or at least measurable delivery cost. A clear quote helps establish scope and pricing terms.
Check profitability, capacity and cash flow
Three checks take the model beyond a diagram. First, margin: after the costs directly caused by a sale, what remains for other expenses? Second, capacity: how many sales can you deliver without reducing service quality? Third, cash flow: do you have to pay before customers pay you?
Distinguish revenue from value created
Reselling equipment may generate substantial revenue at a low margin. A specialist service may produce less revenue but more contribution. Compare income with the costs it creates, rather than looking only at invoices.
Include customer acquisition costs. If a sale requires several meetings and a tailored proposal, sales time must be counted too. Track this work alongside the cost of delivering the service.
Identify cost thresholds
Costs do not always rise smoothly. Another employee, larger premises or an additional licence may become necessary above a certain volume. Show these steps in the model. Positive contribution on each sale does not guarantee that the whole business covers its costs.
Cost accounting can help test these assumptions by offer or contract.
Finally, examine payment terms. An appropriate deposit can reduce funding needs. A subscription billed after delivery has a different cash-flow effect from advance payment. These terms must remain acceptable to the customer and consistent with the contract. Include them in your cash flow budget.
Test the model before expanding it
Rank assumptions by importance and uncertainty. Trying to confirm every detail at once spreads effort too thinly. Start with assumptions that could undermine the project: willingness to pay, customer access, delivery cost or an essential skill.
For each test, decide beforehand what you want to learn and which decision it may inform. For example, offer a paid pilot to a specific group, measure delivery time and ask what would justify renewal. Criteria should come from your economics, rather than a supposedly universal conversion rate.
A landing page and a subscriber list can indicate interest. On their own, they do not establish that people will buy, remain customers or accept the final price. Progress towards more concrete commitments without presenting early signals as sales.
Conclusion: turn your model into first decisions
A good business model helps you decide whom to serve, which requests to decline, what to charge and which resources to develop. If it leads to no decisions, it is probably still too general.
Prepare a dated Canvas, a simple contribution calculation and three assumptions to test. After initial feedback, adjust the model and develop the business plan. You can then estimate startup costs on a stronger basis.
Your legal structure and formalities support this organisation. If you are preparing a Swiss launch, Entreprendre.ch can help you form your company.
Frequently asked questions
Is a business model simply a revenue stream?
No. A revenue stream explains how you charge. A business model also connects customers, value, delivery resources, partners and costs.
Can you have several customer segments?
Yes, but examine their differences. Where expectations, prices or channels differ substantially, use separate assumptions instead of an average description that fits nobody.
Must you complete the Canvas in a particular order?
There is no mandatory order. For a startup, beginning with customers and their problem often prevents an offer being built solely around your skills. Revisit the blocks as inconsistencies emerge.
Does a subscription automatically improve profitability?
No. It may make revenue more predictable, but it also creates ongoing service obligations. Track costs, customer requests, cancellations and the time needed to acquire each subscription.
When should you change your business model?
When evidence contradicts an important assumption, such as willingness to pay, service costs, an ineffective sales channel or a lasting change in demand. Compare options before changing several elements at once.
Sources and references
- Strategyzer: official Business Model Canvas
- Strategyzer: what a business model is
- SECO SME portal: preparing a business plan (French)
The French article’s editorial and source review was completed on 21 September 2026. The case study and figures are fictional.
Romain Prieur is a Swiss certified public accountant and the founder of Entreprendre.ch. With more than ten years of experience in auditing and supporting businesses in Switzerland, he advises entrepreneurs on company formation, accounting and taxation.
