✅ Why this step keeps your model grounded in real-world viability
Every product idea costs something—your success depends on knowing what, when, and how much.
The Cost Structure block of the Business Model Canvas (BMC) helps you map out all the significant costs required to create, deliver, and support your product. This includes materials, tooling, team time, services, infrastructure, and more. A clear understanding of costs helps you price correctly, identify risks, and make strategic decisions about scale.
📘 What you’ll define
- All major fixed and variable costs in your business model
- Which resources and activities are most expensive
- How costs align with your revenue model and value proposition
- Which areas drive scalability—or limit it
- What financial risks or dependencies affect delivery
🛠️ Tools and methods
✅ Cost Structure Checklist
Example Cost Structure Table
| Cost Item | Type | Description | Linked To |
| Injection mould tooling | One-time | Tooling for plastic parts | Manufacturing |
| Unit material cost | Variable | Plastics, electronics, packaging | Value delivery |
| Developer salaries | Fixed | Full-time engineers | Platform development |
| Subscription platform fee | Recurring | Backend hosting + APIs | Service delivery |
| QA and compliance testing | Project-based | Lab tests (CE/UKCA, safety) | Legal & safety requirement |
| Customer support team | Scalable | Proportional to user base | Retention & onboarding |
- Tools like BOMs, burn rate calculators, and service cost maps can help
- Consider margin, breakeven, and funding runway if relevant
⚠️ Mistakes to avoid
- Underestimating hidden or indirect costs (e.g. certification, logistics)
- Failing to update costs as the design evolves
- Ignoring scaling costs—cheap at 10 units may be expensive at 10,000
- Forgetting time-based costs like licenses, hosting, or renewals
💡 From the field
“Our MVP was profitable—until we factored in CE testing and customer support. Cost structure saved us from scaling a loss.”– Hardware Cofounder, ClimateTech Startup
💡 A realistic cost structure isn’t just financial—it’s strategic. It shapes what you can offer, and how.
🔗 Helpful links & resources
- Cost Model Template
- Download: BOM Estimator + Cost–Revenue Overlay
- Article: Mapping Costs That Matter in Your Business Model
- Follow-on: Revenue Streams
✍️ Quick self-check
🎨 Visual concept (optional)
Illustration: A layered bar graph showing Fixed vs. Variable Costs. Example items: tooling (high one-time), support (rises with users), cloud hosting (monthly tier). Each is linked to a part of the business model canvas.
Visual shows how different cost types affect scalability and decision-making.