[Facilitator experience] Business Plan & Business Model Canvas
On 19th August 2020, I had the wonderful opportunity to address around 35+ enthusiastic attendees on the topic, ‘Business Plan & Business Model Canvas’ at the ‘Esperanzo, Innovate for the future’ webinar series organized by IEEE Kerala PES Young Professionals team in association with IEEE Student Branch of JCET, Kerala.
This was the first time I spoke on this specific topic — and it was a lovely experience sharing about my thoughts, plus answering a dozen of interesting questions from the participants in the end of the session! Recording my reflections from the session and the overall points about the topic ‘Business Plan & Business Model Canvas’ so it can help out a lot of people, who are starting up. :)
Let us get to the ‘Business’!
Business in simple terms, can be defined as ‘adding value to the customers’. There are multiple aspects to a successful business — starting from requirements of the market, the timing of the product/service being offered, and the efforts behind the screens, such as PR and marketing.
Though the Founders and the co-founders always have their big idea or solution to the problem on their mind, it is quite important that they bring them down on a paper to make it visible for the other stakeholders involved on the business and to add clarity to themselves.
Why do we need a ‘Business Plan’?
While there are so many reasons, that business plans are created and iterated by the management professional in every business, two things as benefits really stood out to me!
(i) Attract investments — Funding can be crucial especially for business’ who are in the growing stage and those who need to attract investments to scale up. All the funders, starting from Venture Capitalists to Bank who are offering you loans, will always look out for a business plan in place, which offers them a glimpse of what you are trying to solve and how. Hence, business plans can be decision making tools.
(ii) Predicting the future! — Though, Entrepreneurship is largely different from Astrology— you cannot deny the fact that, as Entrepreneurs, you have to consciously predict the future and build for it. The business plan can be a great tool to capture your ideas and predictions as forecasts and can help you solve the problem looking ahead!
That being said, let us jump into the different steps in creating a business plan!
The business plan!
We will look deep into what are important components of a business plan and understand briefly about each one of them.
i. Executive Summary — The overview of your business and your plans.
Imagine you are creating a LinkedIn profile for your business (let’s say a personal account and not a business page), the content you will typically think and add on the ‘About’ part of your profile, resembles your Executive Summary!
This part captures the vision and touches upon on the core areas of your business. The purpose of the business and the potential need for the same in the larger landscape of the problem is addressed here.
ii. Opportunity — Your understanding of the market!
Every business is always behind a target customer segment as a potential market. The opportunity in the specific market, the problem statement, the solution, the other players and their impact were all captured here. The key question to ask yourself is — ‘What are you selling or how are you solving the problem in the market?’
iii. Execution — Marketing and sales plan | Operations | Milestones
What are the potential steps to be taken towards filling the market gap?
Every business needs execution. This segment of the business plan articulates the potential steps to be taken by your team, both in terms of customer acquisition and engagement (depends on your business model) and the detailed plan of how will you execute them. The milestones on your journey in the future — quarterly, half yearly, annually can also be discussed and added here.
iv. Company & Management Summary — All about your team!
Do you have the necessary resources and assets to achieve the outcomes? If yes, how?
In this part, you discuss about the most important aspect of the business plan — yes, it’s none other than you and your company! You can include a detailed snapshot of your company, the management, the legal structure, your physical location, and history (in case if there are any mergers or acquisitions). This adds credibility to your business and focuses on the competency and the capacity of your business in the playfield of market!
v. Financial — The forecast of things!
What is your budget sheet looking like? Do you require additional investments?
It is all about the numbers in this part. You can mention about your sales forecast in the future, your existing cash flow statement and your budget sheet. As a business, you will have different priorities over time, this is the place to capture both the anticipated income and expenditure over the time.
vi. Appendix — Additional information as references!
A place to showcase the charts, tables, definition and other critical information. Like the references part of every wikipedia page.
The business model canvas!
While the business plan (in most cases), in usually an external document — which are written for a specific audience for a specific purpose, the business model canvas is a great internal document, that can be created and iterated by the founders of any business to gain clarity and consciously follow the direction in your business.
This is how it looks like!
Deep diving into the different parts of the Canvas and the key question you should ask yourself on every part is mentioned below.
i. Customer segment — Who are your customers? What are their characteristics?
ii. Unique value proposition — How will you turn an unaware visitor into an interested customer? Create a clear and compelling one-liner message you want to send across.
iii. Channels — How will you reach your target consumers? Direct marketing, social media, ads, partnerships — identify the effective ways to reach them.
iv. Customer Relationship — How will you engage your customers and continue serving them?
v. Revenue Streams — What money sources will grow your money? How will you generate income? Show a pricing model of your product or service and include other revenue sources, such as sales and subscription fees.
vi. Key resources — What are the resources or assets do you require to achieve your outcomes?
vii. Key activities — How will you solve the problems of customers? Write down a solution for each problem.
viii. Strategic partnerships — Who are the strategic partners you should potentially collaborate to succeed?
ix. Cost structure — What are the fixed and variable costs to launch your product or service? Consider the cost at each stage from setting up a website, hiring employees, production, marketing, and bringing them to consumers.
To make it easier to understand, let us look take the example of Uber, a global brand in the on the demand transportation industry.
The business model Canvas of Uber!
i. Customer segment — (i) Passengers (ii) Drivers
ii. Unique value proposition —
For passengers, (i) Taxi on demand (ii) Cash free (iii) Short wait time
For drivers, (i) Passengers on demand (ii) Easy additional income in the free time
iii. Channels — (i) Mobile app (ii) Social Media marketing (iii) PR
iv. Customer Relationship — Automated and instant star rating review
v. Revenue Streams — (i) Surge pricing (ii) Charger per ride (iii) Premium Uber Support
vi. Key resources — (i) Uber app platform (ii) Pricing algorithm (iii) Routing algorithm
vii. Key activities — (i) Developing the platform and algorithm (ii) Marketing (iii) Driver onboarding
viii. Strategic partnerships — (i) Drivers (ii) Payment processors (iii) Local authorities (iv) Mapping data providers
ix. Cost structure — (i) Driver payment (ii) Payroll for employees (iii) Software development (iv) Sales and marketing
Both the business plan and the business model canvas are tools for you to strategically grow your customers and investments for your business. Ultimately, it is always the vision of the founding team and the competency to add value to the customers which always defines the success in any business.
To grow your expertise on both these topics, try writing a ‘dummy’ business plan and the business model canvas for an established business or for one of your ideas which you want to develop in the future.
Hope you find the article helpful! Please clap (x50) — it will motivate us to write more. :)
I’m an aspiring entrepreneur too, along with my team -piloting a virtual education startup, ‘EduRise Global’ — please do follow us on Social (FB | Insta | LinkedIn | Twitter | Medium | YouTube) to know more about us!
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