The Business Model Canvas – First Steps in Business Planning
One of the main outcomes of the Building Business Horizons programme is to provide participants with the opportunity to create a good draft business plan. That’s what our latest cohort have been working towards this month with a range of exercises and tools that can help.
But why write a business plan? Why not just jump in and try it out as some may tell you? You’ve probably heard the phrase
“Failing to plan is a plan to fail”
Your business plan is an essential part of your business. You may need one for applying to the bank for a loan, seeking a co-founder or director or seeking other investment. Most importantly though is that you will need it for yourself to help you keep on track.
Yet you’ve probably seen different examples of business plans and think that you need to spend hours on writing a 50-60 page document before you can do anything. Yes – a business plan can become a hefty document, but there are tools out there to help you to plan out your business model which you can use as the basis of your business plan.
One tool in particular is the Business Model Canvas. It is made up of 9 sections:
- Customers – where you identify your individual customer segments
- Value Proposition – where you state what the benefits are of the customer using your product
- Channels – where you identify how you are going to get to your customers ie website, word of mouth
- Customer Relationship – where you identify what type of relationship your customer would like to have with you ie informal vs formal/professional
- Revenue Streams – where you state what products / services you plan to sell to your customers
- Key Resources – where you identify what key things you need to run the business ie premises, website, staff
- Key Activities – where you identify which key activities you need to undertake in order to sell your product
- Key Partners – where you identify who your key partners, stakeholders are in delivering the business/selling products and services
- Cost Structure – where you list out all the associated costs in running the business
Using the Business Model Canvas helps you to map out your business model quickly which you can then go out and test with your customers.
It isn’t just used to map out at the start-up stage; you can use it to map out a new customer segment or what would be needed for a new product or service you may be introducing. You could even create a Business Model Canvas for each specific customer segment or colour co-ordinate in one overall canvas.
Whichever way you use it, the Business Model Canvas you create will help your business plan development as it covers the whole range of a typical business plan template.
To find out more about how the Business Model Canvas can help you plan for start-up or growth stages, contact us at www.startupcroydon.co.uk. For more information on how the Building Business Horizons programme can help you go to https://startupcroydon.co.uk/building-business-horizons/
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