A written plan is the foundation for a successful business launch, major expansion or change in direction. But writing an effective business plan can be a challenge, starting with the structure your plan should take.
What, you might ask, does creating a business plan have to do with human resources (HR)?
As you better define and understand your business and customers, you can:
- Optimize how you organize and manage your people to best achieve those business goals
- Identify areas where you might need to hire or train existing staff
- Ensure that each new hire is essential to driving business goals
- Help estimate personnel costs
- Better align your mission, vision, values and culture
A well thought out business plan is a critical tool in building and maintaining a top-tier workforce.
How to create a business plan using the Business Model Canvas
There are many ways to write a business plan, from a few notes on the back of an envelope to a multipage document with research, financial projections and extensive notes. Each approach can present pitfalls, however.
Jot down a plan with too little information and you won’t be able to operationalize your plan effectively. Turn your plan into a major research and writing project and you can get bogged down in the weeds.
One alternative is the Business Model Canvas. This is a one-page grid made of nine essential building blocks that executives and business owners can define to map their business plan. The building blocks are:
- Customer segments
- Value propositions
- Customer relationships
- Revenue streams
- Key resources
- Key activities
- Key partners
- Cost structure
The Business Model Canvas concept was developed by Swiss entrepreneur and consultant Alexander Osterwalder and Strategyzer.com as a way for businesses of any size to plan more effectively.
Advantages of the Business Model Canvas planning method
By defining each of the Business Model Canvas building blocks for your business, you can come up with a business plan that:
- Fits on one page
- Is easy to understand at a glance
- Is easy to update as circumstances change
- Fosters collaboration
- Keeps planners focused on high-level elements
Let’s look at each of the nine elements above in more detail.
1 – 2. Start with your customer segments and value propositions.
To start building your plan, identify your customer segments and your value proposition for each one. Ask yourself and your team:
- Are your customers segmented or diversified? For example, if you’re starting a software company, you might be creating value for unpaid simple users as well as for paying enterprise clients.
- Who are your most important customers?
- What is the need you’re trying to satisfy for each customer segment?
- What products and services will you offer to provide that value?
3. Look at your channels.
Once you’ve identified your customer segments and the value you plan to deliver, you can identify the channels you’ll use to deliver that value. Questions to answer for this element include:
- What channels do you customer segments prefer to use? For example, do they want software demos in person or online?
- What are the most cost-efficient channels? Following up on our software demo example, online will almost always be more cost-effective than in person.
4. Identify your customer relationship goals.
Next, it’s time to clarify the kinds of relationships you want with your customers.
For example, do you want to be a resource they call on as needed, or a partner whose products or services they use every day? How will you establish and maintain those relationships?
5. List your revenue streams.
When you know the value that you offer customers and the channels they prefer, you’re ready to consider revenue streams.
What are your customers willing to pay for the value you provide? What do they pay now for similar products and services?
Identify all of the individual revenue streams in your plan. Then try to quantify how much each of those streams will contribute to your overall revenue…