The business model canvas (BMC) is a one-page visual tool that describes how an organization creates, delivers and captures value. It splits a business into nine building blocks that fit on a single sheet.
Alexander Osterwalder and Yves Pigneur set out the canvas in their 2010 book Business Model Generation. This guide explains each block with a guiding question and fills in an illustrative example. It also shows how to run a workshop and compares the canvas with the Lean Canvas.
The blank canvas and two filled examples are drawn below. A printable template and an Excel version, with a test log and a break-even sheet, are free to download.
Key takeaways
The business model canvas describes a whole business on one page using nine connected blocks.
The right-hand side covers customers and value, and the left-hand side covers how you deliver it.
Fill the canvas with short statements and sticky notes, then test each guess against real customers.
The Lean Canvas, adapted by Ash Maurya, swaps some blocks to suit early-stage startups.
A canvas is a set of hypotheses, so treat the first draft as a starting point for testing.
What is the business model canvas?
The business model canvas is a template with nine boxes that together show how a business makes money. It replaces long business plans with a picture a team can read in minutes.
Osterwalder developed the underlying idea in his doctoral research. The 2010 book Business Model Generation, written with Yves Pigneur, made the format widely used. Teams in startups and established companies both use it.
The canvas is not a forecast. It records what you currently believe about your customers, your offer and your costs, so you can examine those beliefs.
When should you use a business model canvas?
Use the canvas whenever a team needs to clarify, compare or explain how a business works:
Situation
What the canvas does
A new idea
Shows whether there is a realistic path to customers and revenue.
A strategy review
Exposes assumptions that no longer hold.
A new product or service line
Compares options without a full plan for each.
A team that disagrees on priorities
Gives sales, operations and finance one page to discuss.
Teaching business design
Turns abstract terms into concrete choices.
Draw it before the pitch deck, financial model or marketing plan. Those documents are stronger when the model under them is clear. For an unproven startup idea, the Lean Canvas may suit better.
What are the nine building blocks?
The nine building blocks are customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partners and cost structure. The sections below give a guiding question for each.
To make this concrete, each block includes an illustrative example for a neighborhood bike repair service. The details are invented for teaching.
Key partners
Asks who else you depend on.
Key activities
Asks what you must do well.
Key resources
Asks what assets you need to deliver the value.
Value proposition
Asks what problem you solve or need you meet.
Customer relationships
Asks what kind of relationship each segment expects.
Channels
Asks how you reach customers and deliver the value.
Customer segments
Asks who you create value for.
Cost structure
Asks what the main costs are.
Revenue streams
Asks what customers pay for and how.
Free downloads
Business model canvas template, ready to print or fill in
The blank prints with each box's guiding question in small print. The workbook has the canvas, the guide's examples and a riskiest-note test log and a break-even sheet that works out how many sales cover your costs.
Customer-facing blocks: segments, value, channels and relationships
Customer segments ask who you create value for. Our bike repair example serves commuters who ride daily and cannot afford a week without their bike.
Value propositions ask what problem you solve or need you meet. Here it is same-day repairs at a fixed, published price.
Channels ask how you reach customers and deliver the value. The shop uses a window sign, a local map listing and a text message booking line.
Customer relationships ask what kind of relationship each segment expects. Commuters want quick, personal service, so the owner texts them when the bike is ready.
One sentence keeps the value proposition honest: we help (segment) achieve (outcome) by (offer). For the bike shop, that reads: we help daily commuters get back on the road the same day with fixed-price repairs.
Money blocks: revenue streams and cost structure
Revenue streams ask what customers pay for and how. The shop earns from repair labor, parts and an optional yearly service plan.
Cost structure asks what the main costs are. Here they are rent, tools, parts stock and the owner's time. Costs flow from your key resources and activities, so check the three blocks agree.
Say a basic repair takes 30 minutes and the shop charges a fixed fee of $45, with about $10 of parts. That leaves $35 toward rent, tools and the owner's pay. With rent and other fixed costs at $3,000 a month and a target owner pay of $3,500, the shop needs about $6,500 ÷ $35, or roughly 186 basic repairs a month. That is about 9 a day over 21 working days. Twenty service plans at $120 a year add $200 a month, so the plans help but do not change the picture. These numbers are illustrative.
Delivery blocks: resources, activities and partners
Key resources ask what assets you need to deliver the value. The shop needs a workshop, repair tools, a parts stock and a skilled mechanic.
Key activities ask what you must do well. Here that means diagnosing faults quickly, ordering parts and keeping to the schedule.
Key partners ask who else you depend on. The shop relies on a parts wholesaler and might partner with a nearby cafe that hosts a drop-off point.
Do the blocks fit together? Six connection checks
A full canvas is not automatically a good one. The blocks should support each other, so when you change one, check its neighbors. Read across these pairs:
- Segment and value: Is the offer clearly valuable to this specific group?
- Value and channels: Can the channels explain and deliver the offer?
- Channels and relationships: Does the buying experience match what customers expect?
- Revenue and costs: Does the money coming in cover the activities and resources?
- Resources and activities: Do you have what the most important work needs?
- Partners and risks: Does each partner remove a risk, or add a dependency?
In the bike repair example, the promise of same-day repairs holds only if the parts stock and the mechanic's hours allow it.
How do you run a business model canvas workshop?
Run a canvas workshop by putting a large printed canvas on a wall. Give everyone sticky notes and fill in the blocks in a set order. Keep the session short and the notes brief.
- 1Agree on the business or product the canvas covers. One canvas per customer segment keeps it clear.
- 2Start with customer segments, then value propositions. Everything else depends on these two.
- 3Move through channels, relationships and revenue streams.
- 4Add resources, activities, partners and costs.
- 5Mark the notes you are least sure about, then choose two or three to test.
Invite people from different roles, such as sales, operations and finance. Different views expose gaps a single author would miss.
What does a business model canvas look like for a subscription software tool?
A subscription software canvas centers on recurring revenue and low delivery cost. The example below is illustrative: an invoicing tool for freelance designers.
Key partners
A payment processor and a hosting provider.
Key activities
Building and maintaining the product, fixing bugs and answering support questions.
Key resources
The software itself, the development team and cloud hosting.
Value proposition
Send a professional invoice in two minutes and see who has not paid.
Customer relationships
Self-service help pages, with email support for paying users.
Channels
A website, search listings and referrals from design communities.
Customer segments
Freelance designers who bill several clients each month.
Cost structure
Developer salaries, hosting, payment fees and marketing.
Revenue streams
A monthly subscription, with a free tier that limits the number of invoices.
Reading this canvas
Notice how the model depends on keeping customers month after month. If many cancel quickly, the revenue streams box will not cover the costs box.
This example as a printable canvas, or a blank one to fill in.
Example (PDF)Blank canvas (PDF)Workbook (.xlsx)What does a business model canvas look like for a local cafe?
A cafe canvas centers on location, repeat visits and daily running costs. Again, the details are illustrative: a small cafe near a railway station.
Key partners
A local bakery, a coffee roaster and a milk supplier.
Key activities
Preparing drinks, baking or buying food and keeping the shop clean.
Key resources
The premises, the espresso machine and trained staff.
Value proposition
Good coffee served in under two minutes, plus a simple lunch menu.
Customer relationships
Staff who learn regular customers' orders, and a stamp card.
Channels
The shop front, a pick-up counter and a pre-order message line.
Customer segments
Commuters who want a fast coffee, and nearby office workers who want lunch.
Cost structure
Rent, wages, ingredients and equipment upkeep.
Revenue streams
Drinks, food and a small retail shelf of beans.
Reading this canvas
A cafe has high fixed costs, so the canvas shows why footfall matters more than any single menu item.
This example as a printable canvas, or a blank one to fill in.
Example (PDF)Blank canvas (PDF)Workbook (.xlsx)When one idea is really two business models
Some ideas hide two businesses. Take an illustrative restaurant that sells crab rangoon and wants to turn its crab shells into garden fertilizer. Drawing one canvas per side shows how little they share.
| Block | Food side | Fertilizer side |
|---|---|---|
| Customer segments | Diners, takeout customers and caterers | Gardeners, small farms and nurseries |
| Channels | The restaurant, delivery apps and catering orders | Garden centers, markets and online sales |
| Key activities | Cooking, service and food safety | Processing, drying, packaging and quality control |
| Key partners | Seafood and ingredient suppliers | A processor, a testing lab and stockists |
| Cost structure | Rent, staff and ingredients | Equipment, testing, packaging and permits |
Customer segments
Diners, takeout customers and caterers
Fertilizer side: Gardeners, small farms and nurseries
Channels
The restaurant, delivery apps and catering orders
Fertilizer side: Garden centers, markets and online sales
Key activities
Cooking, service and food safety
Fertilizer side: Processing, drying, packaging and quality control
Key partners
Seafood and ingredient suppliers
Fertilizer side: A processor, a testing lab and stockists
Cost structure
Rent, staff and ingredients
Fertilizer side: Equipment, testing, packaging and permits
The only shared piece is the shell supply. The second business needs its own customers, channels and rules, since fertilizer products may need to meet labeling and safety requirements. It deserves its own tests before anyone buys equipment.
What are common business model canvas mistakes?
Weak canvases usually have every box filled and little thinking behind them. Watch for these:
- 1
Vague phrases. Blocks filled with 'everyone' or 'quality service'. Specific statements can be tested, and vague ones cannot.
- 2
Several segments on one canvas. Each segment often needs a different value proposition, channel and price, so draw a separate canvas for each.
- 3
Features instead of value. 'mobile app' or 'handmade recipe' says what the offer has. The value proposition should say why the customer cares.
- 4
Ignoring delivery costs. A promise that needs expensive service, complex logistics or constant manual work must be paid for by the revenue streams.
- 5
Skipping the connections. If your value proposition promises same-day service, your key resources and costs must support that promise.
- 6
Trusting the template. A downloaded slide or poster gives you the layout, not the thinking. Accurate notes and honest tests matter more than a polished design.
- 7
A one-off exercise. Business models change as you learn, so review the canvas whenever a major assumption is proved or disproved.
What is the difference between the business model canvas and the Lean Canvas?
The Lean Canvas keeps the one-page format but replaces four blocks to focus on problems and risk. Ash Maurya adapted it from Osterwalder's Business Model Generation canvas for early-stage startups.
It swaps key partners, key activities, key resources and customer relationships for problem, solution, key metrics and unfair advantage. It also renames value propositions as the unique value proposition.
Use the business model canvas when you describe an existing or well-understood business. Use the Lean Canvas when you are testing an unproven idea. Our Lean Canvas template guide walks through it, and the lean canvas tools category lists related software.
Neither is better in every case. A team can start with one and move to the other as it learns.
How do you test what you put on the canvas?
Test the canvas by turning your riskiest notes into questions and checking them with real customers. Interviews, landing pages and small paid trials are common methods.
Testing early matters because many businesses close within a few years. Of US private-sector establishments that opened in March 2013, 79.6% were still operating a year later, 50.6% after five years and 34.7% after ten, according to the Bureau of Labor Statistics.
For an unproven product, the cheapest test is often a minimum viable product. The lean startup method describes the build, measure and learn loop behind this approach.
Update the canvas after each test. A canvas that never changes probably is not being tested.
Expect many tests to disprove a note. In Harvard Business Review, Ron Kohavi and Stefan Thomke report that at Microsoft about one-third of tested ideas prove effective, one-third have neutral results and one-third have negative results.
A short checklist for testing the riskiest box first
1. Mark the one note that would sink the model if it were wrong. In the bike repair example, that is whether 9 commuters a day will choose the shop.
2. Write what you would need to see to keep the note, before you test. For example, 40 booking texts in the first two weeks of a window sign.
3. Pick the cheapest test that could prove the note wrong, such as a sign and a booking number before signing a lease.
4. Run it for a fixed time, then compare the result with the number you wrote down.
5. Update the canvas, and move on to the next riskiest note.
Six questions to review a finished canvas
Before you share a canvas, check it against these questions. Mark untested notes in one color and evidence-backed notes in another, so the gaps show.
- Clarity: Can someone new to the idea follow it in a few minutes?
- Specificity: Are segments, channels, resources and costs concrete enough to test?
- Alignment: Do the blocks support each other?
- Evidence: Which notes rest on real data, and which are still guesses?
- Focus: Does it show what matters most, or is it cluttered?
- Next step: Does it point to the next decision or experiment?
Presenting the canvas as a story
When you present a canvas, walk through it in the order a customer meets the business. A story is easier to follow than nine boxes read left to right.
- 1
Start with the customer segment and the problem they have.
- 2
State the value proposition in the customer's words.
- 3
Show how you reach customers and keep them: channels and relationships.
- 4
Explain how money comes in: the revenue streams.
- 5
Finish with what happens behind the scenes: resources, activities, partners and costs.
Frequently asked questions
What is the Osterwalder business model canvas?
What are the nine building blocks of the BMC?
Is there a business model canvas template I can use?
How many business model canvases do I need?
What is a good business model canvas example?
How do I check whether a business model canvas adds up?
Related guides
- Lean canvas template: the 9 boxes, fill order and exampleA free lean canvas template with guiding questions for all nine boxes, the order to fill them in, two filled examples and how to test your riskiest assumptions.Read the guide
- Minimum viable product (MVP): meaning, types and examplesMVP meaning explained: what a minimum viable product is, the main MVP types, how to build one step by step, what to measure, and mistakes to avoid.Read the guide
- FMEA: failure mode and effects analysis, step by stepFMEA explained: worksheet columns, eight steps, scoring severity, occurrence and detection, RPN vs action priority, examples and a free FMEA template.Read the guide
- Control charts: types, how to read them and examplesControl charts explained: the center line and limits, common vs special cause, which chart fits your data, the signals to look for and mistakes to avoid.Read the guide
Sources
Books and papers show their publication year. Web pages show the month we last checked them.
- 1.Alexander Osterwalder and Yves Pigneur, Business Model Generation (Wiley, 2010)
- 2.Alexander Osterwalder, Yves Pigneur, Gregory Bernarda and Alan Smith, Value Proposition Design (Wiley, 2014)
- 3.US Bureau of Labor Statistics, 34.7 percent of business establishments born in 2013 were still operating in 2023 (The Economics Daily, bls.gov, January 2024)
- 4.Ron Kohavi and Stefan Thomke, The Surprising Power of Online Experiments (Harvard Business Review, September-October 2017)