You’re proud of your idea and you’re bursting at the seams to get started, but you’re not quite sure how. You’ve been encouraged to make a business plan by your friends, but you don’t want to spend time writing out a hundred-page document no one will ever read. How can you explain your business idea to colleagues, customers, and potential investors and make sure you maximize the effect of your efforts?
The Business Plan Solution
We have a solution for you! The Business Model Generation is a guide for “visionaries, game-changers, and challengers,” that consolidates the most important features of a business plan in a user-friendly format that demonstrates how the different aspects of your business work together. This method was co-created by 470 strategy practitioners from 45 countries and is being utilized by over 100,000 people around the globe to mastermind their world-changing businesses.
This one-page business plan answers three questions of your business:
1. What does your business offer that people want to pay you for?
2. How does it produce that offering?
3. How does your business capture value for itself?
Let’s go through these one by one.
What do you create that people want to pay for?
This first question to develop a business plan reaches the core of your its purpose. What is your business bringing to the world that was not available before? What niche are you filling? What does it mean to your customers?
If you are producing a brilliant new mug that keeps its contents at the perfect drinking temperature, no matter how long it has been sitting there or how cold it is outside, your value proposition is an unconditionally hot cup of liquid. Your customers could be residents of Alaska, office workers who nurse their cup of coffee all day long, or kids who drink hot chocolate at a baseball game. Your product means something slightly different to each of these customers, but the value proposition of hot liquid is the core of your business.
How does your business produce that product?
This question addresses the operational basics of your company and how it provides a product to your customers. One aspect of this is the resources and partners you will work with. Your resources may be a patent on your invention that keeps a mug consistently hot, a manufacturing plant where the mugs can be constructed and packaged, and your staff and intellectual potential, among others. Your partners would include the advertising agency you use to market your product and your buddies in the coffee industry who have helped fund your initial prototypes.
On the other side of the equation to a business plan is the means through which a customer interacts with your product. If you conduct sales through an online store, your customer relationship will be through customer service questions, direct sales, and various marketing media. The channels through which your customer obtain your wonder mug could be your online store in addition to the local coffee shop that has agreed to set up a demo station for your mugs. Finally, your activities involve the production of your mugs, advertising, and customer relations.
How does your business capture value for itself?
This last question establishes the ability of your company to retain value upon providing your customers with some value. The profit formula appears at the bottom of the business model canvas, showing the basic revenues minus expenses model. On the left, you can note how many mugs you will sell to whom, and on the right, you can show what you will need to spend in order to sell those mugs.
As a whole, the business model canvas outlines your business’s purpose, processes, and finances in a easy-to-understand, easy-to-visualize way. Now try to explain your business using the answers to these questions. You’ll find you’re better able to present your concept with this guideline.
If you haven’t printed this on an oversized piece of paper and begun frantically scribbling in each box, what’s holding you back? Get started on this easy, fun, and well-structured business plan to define your business’s future!