Sitting down to plan out your business may seem daunting, but the old saying ‘failing to plan is a plan to fail’ has never been more true than when it comes to business.
You can probably think of a thousand other things that you would rather be doing, like coming up with cool brand innovations or networking to find that vital investor. But, being methodical, working out your priorities, action points and timelines will actually save you a lot of time, and heartbreak, in the future.
A business model canvas, like the one below, will help to get your thoughts organised, help you to make a list of clear actions and be sure that you haven’t left any important areas of development unchecked. Even if you have completed a detailed business plan, stepping back from that and reorganising your business in a new simplified structure will start new ideas flowing.
The business model canvas we’re using on the Business Start-Up Journey is deliberately kept to one side of A4, because we want all the information on one page. Don’t over complicate things. Summarise and use bullet points. Avoid vague statements and be precise.
Tackling the canvas
- Key activities – What do you do? What are your products & services and what are your non-tangible activities? For example, Ferrari sell cars but also makes customers’ dreams come true.
- Value proposition – A great way of stating what you are doing in a more customer-centered way.
- Cost structure – Will include the cost of producing your product or service, costs involved in running the business, the cost of employing yourself and others. This will help you structure the overall cost. Unless you know to the exact pound/dollar/euro how much your product costs to make, or your service to deliver, you cannot begin to price your product/service for sale.
- Customer segments – Who is your audience? Don’t write ‘anyone aged 18 to 80’ – an 18 year old male does not have the same needs, thoughts, feelings or reactions as an 80 year old woman no matter what your product.
This leads to:
- Customer channels – How are you talking to your customers and how are you selling to them?
Which leads to:
- Revenue streams – Do your customer segments and channels align with your revenue streams?
- Key resources – What tangible and intangible, resources do you need? Where are your knowledge gaps? Do you need guidance with accountancy, legal advice or marketing?
- Partners – You might not have any partners in your business, but push yourself to think who, in an ideal world, would you want to help you. We, as entrepreneurs, often take on the whole burden of running the business ourselves, but what could you hand over to someone else?
This is the logical way to tackle the canvas, but all the parts depend on each other and must be consistent if your business is going to succeed.
Personal development plan
If the business model canvas is about making sure your business is ready for development, the PDP is about making sure you’re ready for the future. Entrepreneurs typically worry about everything and anything. They worry about the product, they worry about the customer, they worry about their staff. But your biggest concern should always be yourself – are you fit to run your business?
Don’t be worried about failure, be worried about success. The skills you need to run a start-up are different to the ones you need to run a £1m business. If your business takes off suddenly, you might realise that you’re the reason it’s about to fail because you haven’t made time to make sure your skill set is up to the job.
Every week you need to take 10 minutes at least to step back from the business and take your own temperature. Where are you in terms of your expectations, where are you struggling? Being an entrepreneur is about asking for help. You do not know everything!
Top tips and next steps
You now have simple, workable documents that outline your business and your personal development. Put the actions and targets in a timeline – there is a logical order of things.
Don’t be afraid of change. These documents should be alive – they should change as your business changes. As things develop go back to your PDP and see what you need to do next.
Planning is important, but so is doing. Knowing what’s important and what can wait is a vital business skill.
Don’t get bogged down in too much detail. If you worry about what colour the folder for your fourth annual audited accounts will be, you’ll never even get your idea to market.
My name is Adam Smith, I am the current Kent Business School ASPIRE Project Entrepreneur in Residence. As part of my role I am currently working with University of Kent students, on the Business Start-Up Journey (BSUJ), an educational programme of events, workshops and activities designed to support the development of student business start-ups at the University of Kent.
I hold a Bachelor of Commerce and a Masters in Business Project Management and have now diversified into angel investing in start-up companies across the IT, hospitality, art investment and retail industries.