A business model canvas for a craft brewery

Why a one-page model first

A business plan can run to fifty pages. A canvas is one. That is the point. Before you invest weeks in a detailed plan, a canvas lets you test whether the idea hangs together. It is quick to change and easy to share with a partner or an adviser. Where the canvas is vague, the plan will be too.

The canvas has nine blocks. We go through each for a brewery.

Customer segments and value proposition

Customer segments. Who buys your beer? Taproom visitors, bars and restaurants, retail shoppers, event organisers and corporate buyers are all different customers with different needs. Pick the few you can serve well. A brewery that tries to serve bars, retail, events and exports in its first year usually serves none of them well. Choose one main segment and one backup. Value proposition. Why would they choose you? Freshness, local character, a style no one else makes, a place to meet. Be specific. If your answer is that your beer is good, so is everyone's. State what a customer gets that they cannot get elsewhere.

Channels and customer relationships

Channels. How does the beer reach them: taproom, direct to trade, distributor, retail, online where allowed? Each has different margins and rules. See setting up a brewery in India as a foreign company if you are entering from abroad. Remember that alcohol rules differ by country and, in India, by state. Customer relationships. Do you serve people personally in the taproom, run a members' club or depend on a distributor who owns the contact? Keeping a relationship costs time and money, so decide how much you will spend on it. A taproom builds regulars through the staff. A trade account is kept by a reliable delivery and a salesperson who answers the phone. Neither is free.

Revenue streams and cost structure

Revenue streams. List every way money comes in: pints, kegs, cans, food, merchandise, tours, events, contract brewing. Next to each write the price and the share of total sales you expect. Cost structure. List the big costs: ingredients, packaging, labour, rent, loan payments, licences, marketing. Mark each as fixed or variable. A canvas with revenue streams but no cost structure is a wish. Use break-even to turn the two blocks into a monthly target. If the target looks out of reach on paper, change the model now, while it costs only a pencil mark. Moving a revenue stream or cutting a cost after you have signed a lease is far harder. The canvas is the cheapest place to find that out.

Key resources, activities and partners

Key resources. Brewhouse and fermenters, a licence, a recipe library, a brand, a skilled brewer, a site. Which of these would be hardest to replace? Key activities. Brewing, packaging, quality control, selling, serving, compliance. Where will you spend the most effort? Key partners. Malt and hop suppliers, equipment makers, distributors, landlords, a licensing adviser, a contract brewer. Whom do you depend on? What happens if they fail? A brand that relies on one supplier or one distributor has a risk to name.

Test the canvas

Read the canvas as a sceptical investor. Does each customer segment have a channel? Does each revenue stream match a customer? Do the costs make sense against the revenue? Where two blocks contradict, fix it. A taproom customer segment with a distributor channel is a mismatch.

Then test the riskiest assumption with a real customer. Write it down first: for example, that bars will pay a price that leaves you a margin. Decide in advance what answer would change your mind. Many founders skip this step because the canvas looks finished, but a finished canvas built on a guess is still a guess. Ask ten potential buyers, in person, what they would pay and where they would buy.

From canvas to plan

When the canvas holds together, turn each block into numbers: a pricing model, a cost model, a funding plan and a cash flow. The course below walks through that conversion. Our project and business report service can help you build a full business plan or project report, led by Ankur Napa. Start with the canvas and keep it on a wall.

Common questions

What is a business model canvas?

A one-page diagram of nine blocks that describes how a business creates value, reaches customers and earns money.

Do I need a canvas if I am writing a business plan?

It helps. A canvas tests whether the idea holds together before you spend time on detail.

How long should it take?

A first draft takes an hour or two. Improving it takes conversations with real customers and suppliers.

Can the canvas replace a financial model?

No. It describes the logic. You still need numbers for cost, price and cash.