More entrepreneurs are using this alternative to a standard business plan
Just about every entrepreneur knows the first step after your big idea is to draft a business plan. Too often long, tedious and relatively static, a business plan typically covers the mission statement, description of the business and its products/services, differentiators, market description and competitive environment, marketing strategies, operations and management, SWOT analysis, financial statements, including cash flow statement and revenue projections, and a conclusion. Formats vary, but generally all these points should be covered.
But in business, we often find there are hurdles to jump, opportunities we didn’t know existed and conditions we never anticipated. Enter: the Business Model Canvas. Created by Alexander Osterwalder, coauthor of the book, Business Model Generation, the Business Model Canvas is appealing to entrepreneurs for its acceptance of change.
The canvas, often depicted as one large image rather than multiple pages, is divided into nine blocks including key partners, key activities, key resources, value propositions, customer relationships, channels, customer segments, cost structure and revenue streams. The canvas is intended to be used collaboratively, allowing different ideas, sketches and plans to be jotted on sticky notes and placed in the blocks. Most important, the Business Model Canvas is dynamic, allowing the company’s plans to change and adapt to new opportunities and changing market conditions.
No one is discarding the idea of the traditional business plan, but if you’re an entrepreneur, most likely you’re always looking for a new and hopefully better way. The Business Model Canvas may well offer a less structured, more flexible alternative that will make it easier for you to distill your thinking and get ready to present your idea to funders, partners and prospective clients.
Have any of you created a Business Model Canvas? Let us know about your experience.
Tonya Elmore is president and CEO of Tampa Bay Innovation Center. She can be reached at email@example.com.