TL;DR
Your business plan drives your goals. When did you last update it? Does everyone in your company understand it? Take an hour to create a one-page business plan with the Business Model Canvas that’s easy to update, is visual, and ensures that where you think you’re going is really where everyone is going.
The Business Model Canvas (BCM) as your business plan
When was the last time you updated your business plans? Business plans are meant to be the source of truth that directs a company when making decisions. Without one, it’s very easy for employees to be confused on the strategy and goals of the company. The problem is they are often long and overly complicated.
Enter the Business Model Canvas, created by Alexander Osterwalder. A one-page document that provides the most pertinent information you need as a visual. If you’re thinking “We already know our business” then it should take you less than an hour to prove it. Do not spend more than an hour. Show your canvas to others in the company and see if they agree. Want to be completely sure everyone is going the same direction, have a few people individually create one and see how close you match.
Keep in mind that this is a living document. It will and should be edited and questioned. This is your first pass and we’ll revisit it later.
Benefits of the BCM
- It’s Visual: Creating an easy to read visual representation allows everyone to understand the business and how decisions might impact the business.
- It’s Concise: The size of the document encourages people to keep idea short, clear and to the point.
- It Shows Dependencies: The 9 blocks of the BMC help make connections between blocks that can provide clarity to increase efficiencies and present new opportunities. Quickly see connections, dependencies, and risk points
- It’s easy to change: You can make change easier than a business plan. If it’s in a spreadsheet or a poster—sized board you can easily model changes and review how those changes might affect the business.
- It’s easy to share: Don’t limit information to the executive team. Share a poster-board or a picture so you provide information and get feedback from everyone in the company.
How do you start your BCM?
Start by just filling out the boxes. Remember, do not spend more than one hour on your first pass at the BCM. This is a draft of your current business and you will update it later as you learn.
For details, check out Alexander Cowan’s post.
- Customer Segments: Who are your customers? What do they think? See? Feel? Do?
- Value Propositions: What’s compelling about the proposition? Why do customers buy, use?
- Channels: How are these propositions promoted, sold and delivered? Why? Is it working?
- Customer Relationships: How do you interact with the customer through their ‘journey’?
- Revenue Streams: How does the business earn revenue from the value propositions?
- Key Activities: What uniquely strategic things does the business do to deliver its proposition?
- Key Resources: What unique strategic assets must the business have to compete?
- Key Partnerships: What can the company not do so it can focus on its Key Activities?
- Cost Structure: What are the business’ major cost drivers? How are they linked to revenue?
Additional Resources
Check out these resources to learn more about the Business Model Canvas