While working on a new business plan for a side company I’m developing, a new way of working on your business plan was shown to me that is fantastic. My friend learnt about this during a Lean Startup workshop and, as I’m a huge fan of the Lean Startup principles, I felt obligated to share it with you all. I also can’t believe I’ve never come across the business canvas diagram before.
When it comes to learning, or in this case developing a business plan, I don’t enjoy writing pages and pages of text to show my ideas, I’m a visual learner. So when I discovered this business canvas plan last week, I instantly shared it with a few of my work colleagues and suggested we use it.
It’s called the Business Model Canvas, and I encourage you to test it out!
This business model canvas is extremely useful particularly in preparing for tasks like these:
– Business presentations
– Pitching to VC’s
– Consulting with clients
For this model, we focus on the nine basic building blocks of any company. These are:
– Key Partners
– Key Activities
– Key Resources
– Value Propositions
– Customer Relationships
– Customer Segments
– Cost Structure
– and Revenue Streams.
As you may already know, these are included in a normal business plan, but with the business model canvas everything is mapped out in front of you in a clear and organised way. This tool helps you to discuss, design, and see what parts of the business could be improved. Let’s expand on each topic.
These are all the people your business is targeting.
This is the solution (value) your company provides to your customer’s problems.
This section describes which touch points you are communicating/interacting with your customers and delivering value.
Customer relationships outline the type of relationship you are establishing with your customers e.g. one-off transactional, long-term subscription etc.
This section makes it clear on what pricing models your business is using is capturing value.
Here, you can describe the key resources you need to create, deliver, and capture value. After this exercise, you will begin to see which assets are indispensable within your business model.
This section will help you to understand what activities you need to focus on for your business to perform well.
Who can help you to leverage your business model? Key partners are important to help grow and expand your company.
Once you have a good understanding of your business activities, it will be easier to work out how much it will cost to run.
After filling out the Business Model Canvas, it may even be useful to post it on a wall or notice board in your office. You can always add sticky notes for extra ideas and perhaps encourage employees to do the same too. They may have bright ideas!
As I work and develop my own Business Model Canvas, I will share any new thoughts and ideas that I have which could improve this further.