Looking For A Business Plan Alternative? Consider A Business Model Canvas For Startups - Forbes

Looking For A Business Plan Alternative? Consider A Business Model Canvas For Startups - Forbes


Looking For A Business Plan Alternative? Consider A Business Model Canvas For Startups - Forbes

Posted: 30 Sep 2019 06:00 AM PDT

By Rieva Lesonsky

Is the thought of writing a business plan holding you back from starting a business? If you're eager to get your business idea off the ground—without the drudgery of creating a massive document first—a business model canvas for startups might be right for you.

What is a business model canvas for startups?

A business model canvas is a quick-start alternative to a business plan. It helps you think through the most important aspects of startup—such as your product or service, your target market, and the resources you'll need to launch—in a brief chart format.

When to use a business model canvas

Why might you want to use a business model canvas instead of a traditional business plan? Here are some situations where a business model canvas might be appropriate:

  • You suddenly have an opportunity you want to act on. Maybe a restaurant space is for lease in the exact area you dream of launching your restaurant. Perhaps you have the chance to form a partnership with someone who has lots of the resources you need to start a business. Using a business model canvas can enable you to act quickly before opportunity slips away.
  • You want to beat the competition. If you have an innovative business idea, such as a software application or invention, using the business model canvas can help you be first to market. In a highly competitive space, other startups are likely planning launches similar to yours; the business model canvas can help you get the jump on them.
  • You don't need outside financing. If you are trying to get a bank loan, angel capital, or venture capital, you'll need to have a traditional business plan ready to show the financing source. But if you have sufficient startup capital on your own, there's no law saying that you have to follow the traditional business plan format.
  • You want to rapidly assess the viability of your idea. Writing a traditional business plan will reveal any flaws in your idea; however, a business model canvas can help you pinpoint problems faster. Using a business model canvas, you can decide immediately if your idea will fly or if you need to revise it or scrap it and move on to another concept.

Of course, some people just prefer the speed of a business model canvas and don't want to spend weeks or months crafting a lengthy traditional business plan. If this is you, go ahead and try the business model canvas. Just keep in mind this format isn't an excuse for neglecting the details of planning your startup.

Other Articles From AllBusiness.com:

What's included in a business model canvas for startups

The business model canvas for startups takes a high-level view of your business idea and focuses on the key elements you'll need to make it viable. Developed by Alexander Osterwalder, it's a one-page document in chart form that covers the nine "building blocks" that help your business startup make money.

  1. Key partners: Who are the buyers, suppliers, partners, and other alliances that can help you accomplish core business activities?
  2. Key activities: What are the most important actions you need to take in order to fulfill your value propositions, strengthen customer relationships, secure distribution channels, and maximize revenue streams?
  3. Key resources: What essential resources are needed to launch and run your business and create value for your customers?
  4. Unique value proposition: What products and services do you plan to offer? What customer needs do they meet? How do they differentiate your business from your competition?
  5. Customer segments: What customer groups will your business serve? Identify the customer personas that your business provides value for.
  6. Customer relationships: What relationships will you build with your customer segments? What kind of relationship does each customer segment expect?
  7. Channels: What distribution methods will you use to deliver your products or services to your target market?
  8. Cost structure: What will it cost to start and sustain your business? Which resources and activities will be the most expensive?
  9. Revenue streams: How will your business make money? How will you price your products and services? Are there other potential revenue streams?

You can create a business model canvas on paper or a whiteboard. There are also several apps you can use to create your business model canvas; they allow you to incorporate additional information, easily save and share the business model canvas, and more.

Where to get help with the business model canvas

There are several places to get help creating your business model canvas. You can start by watching this SCORE webinar on using the Business Model Canvas. Then visit Strategyzer, Canvanizer, and Xtensio to find a business model canvas tool you can use. You'll also find sample business model canvas examples, resources, and training to help.

Both the traditional business plan and the business model canvas can help startup entrepreneurs evaluate their ideas and make important decisions about launching their startup.

Of course, you can use both methods if you want. Many entrepreneurs start with a business model canvas to give them a "jump start" and then flesh out a traditional business plan further down the road.

(Disclosure: SCORE is a client of my company.)

I am CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email me at rieva@smallbizdaily.com, follow me on Twitter @Rieva, and visit my website SmallBizDaily.com to get the scoop on business trends and sign up for my free TrendCast reports. Read all of Rieva Lesonsky's articles.

RELATED: Don't Waste Time on a Startup Business Plan—Do These 5 Things Instead

This article was originally published on AllBusiness.

As Business Conferences Change, Their Hosts Are Changing, Too - The New York Times

Posted: 30 Sep 2019 12:20 PM PDT

Cannes has been a hub for meetings and events since the Cannes Film Festival began in 1946. But, said Régis Faure, director of tourism for Cannes, the gatherings are moving beyond the convention center, the Palais des Festivals et des Congrès, and are looking "more and more like a festival."

"People want to have some fun," Mr. Faure said. "They want to meet in nice settings," on the beach, in restaurants and at places near the convention center.

Business conferences and events are changing, and traditional meeting destinations are changing along with them. In addition, more smaller cities are getting into the market.

Hotel capacity, meeting space and airport access remain the basic needs, but more destinations are playing up their distinctive venues and creating unique experiences. Authenticity, sustainability, technology, community engagement and, of course, reasonable prices, experts say, are increasingly important to attract business groups.

For the largest gatherings, only "a handful can compete, but we're seeing the emergence of more and more smaller cities," said Chris McAndrews, vice president of marketing for Cvent Hospitality Cloud, a division of Cvent, a meetings, events and hospitality technology provider.

Top destinations have not changed significantly. Orlando, Fla., remains the No. 1 meeting spot in the United States, followed by Las Vegas and Chicago. London, Berlin and Barcelona, Spain, are the top cities in Europe. But cities like Napa, Calif., Edinburgh and Beirut, Lebanon, were added to Cvent's annual lists of Top Meeting & Event Destinations Worldwide for 2019, while surprising or unexpected locations including Aurora, Colo., continue to gain popularity among corporate event planners. Cvent is one of several groups that rank meeting locations.

"The continued growth of supply and options has leveled the playing field," Mr. McAndrews said. "Destinations can compete more effectively than ever."

The meetings and events industry gained traction in the 1980s and '90s and "grew exponentially," said Richard Aaron, who has long been in event management and is an adjunct assistant professor at the Jonathan M. Tisch Center for Hospitality and Tourism at New York University. "Now it's exploding. But it's up to destinations to start rolling up their sleeves and be creative. If they don't, they get left behind."

The potential payoff is substantial: The Events Industry Council estimated that the business event industry contributed $2.5 trillion to the global economy in 2017; events generated $1.07 trillion in spending, from planning to travel.

The 2008 recession was an events boon for smaller cities, according to Kristi Casey Sanders, a director for Meeting Professionals International, a global association with some 17,000 members.

"When it was a sellers' market, hotels could charge whatever they wanted," Ms. Sanders said. "Some of the smaller cities offered more negotiating room, excellent amenities and special treatment, without the price tag of a better-known destination."

Image
CreditRaymond McCrea Jones for The New York Times

Locales like Athens, Ga., the Outer Banks of North Carolina and Medellín, Colombia, "offer a lot of culture, great natural beauty and fun, funky local color," she said. "And smaller cities often have tighter relationships with local vendors, and often bend over backwards to attract your business."

Randi Morritt, director of marketing for Visit Aurora in Colorado, said that was exactly her point. "We like to delight and surprise and impress our clients" with customized experiences, like roping lessons, cowboy poetry readings or a demonstration by a local nonprofit group that rescues raptors, she said.

In 2019, Aurora moved up nine places on the Cvent Top 50 Meeting Destinations in the U.S., to 33. It also ranked higher in 2019 than better-known destinations, including Louisville, Ky., Portland, Ore., and St. Louis.

A recent hotel building boom helped, but so did the city's marketing strategy and a "boots on the ground" approach, Ms. Morritt said. "Being small and new, we move quickly and nimbly to make things happen."

Some cities have been too successful in luring meetings. Antonia Koedijk, director for North America for the Netherlands Board of Tourism & Conventions, said overtourism had led to some changes in the Netherlands.

CreditMarta Iwanek for The New York Times

"In certain months, there is hardly any availability to be found at meeting venues in Amsterdam, and hotel capacity can be sparse and more expensive than usual," Ms. Koedijk said. "The focus on Amsterdam is important, but venues are bursting at the seams."

She said that was one of the reasons "we absolutely try to direct business travelers to other destinations."

One strategy that helps mitigate the negative impact of tourism, she said, is when events engage the community in a meaningful way. During a recent medical conference in Amsterdam, for example, sponsors set up a booth to offer free lung examinations to residents.

"Ten years ago, distance from the airport was the main selling point," Ms. Koedijk said. "It's still relevant, but now it's much more the whole story around the convention. There is more of a focus on content rather than logistics."

Like Amsterdam, smaller cities like The Hague and Rotterdam are easily accessible by train from Amsterdam Airport Schiphol.

"You can arrive at Rotterdam Central Station by high-speed train from Schiphol in a maximum of 26 minutes, before you've checked all your emails," said Catherine Kalamidas, account manager for Rotterdam Partners Convention Bureau.

The number of meetings and events in The Hague in 2018 was nearly double the total in 2013, and Rotterdam also won some big gatherings in recent years, including the 65th Eurovision Song Contest in 2020.

"There is a niche for everyone — the key is figuring out what your DNA is," said Bas Schot, who oversees meetings and events at The Hague Convention Bureau.

The only city in the Netherlands with direct access to a beach, The Hague is walkable, compact and centralized, he said. "If you're a small group of 2,000, you could own the city."

CreditMarta Iwanek for The New York Times

Rotterdam features several unique venues, including the solar-powered Floating Pavilion, three transparent half-spheres that float in Rotterdam's harbor and can be arranged in flexible ways, and the Floating Farm, a working farm with milk-producing cows, for small events and presentations on topics like sustainability, agriculture and solar energy.

Molly Cox, a research associate in New York with the energy research firm Wood Mackenzie, visited the Floating Farm in September as part of the Floating Solar Conference. "It makes you think," she said, "especially coming from the United States, where floating solar capacity is not as prominent as it is in other countries where land is more scarce."

Long term, Ms. Cox said, floating farms are a creative solution that complements the growing floating solar industry.

"Many conventiongoers have traveled to some destinations multiple times, but Rotterdam allows organizers to put someplace new and a little different on their client's agenda," Ms. Kalamidas said, "without having to compromise travel time and efficiency."

How to Monetize a Business Ecosystem - Harvard Business Review

Posted: 30 Sep 2019 06:32 AM PDT

Executive Summary

It isn't enough for companies to get an ecosystem up and running; they also need to sustainably monetize it. From analyzing company ecosystems, researchers have found that companies must do three things if they want a sustainable profit stream from the ecosystems they've created. First, identify a keystone contribution. Second, establish an efficient "tollgate" to collect revenues when partners use that contribution. Third, leverage the ecosystem to innovate and renew the keystone contribution.

Richard Drury/Getty Images

More companies are starting to recognize that developing a vibrant ecosystem of partners across industries is essential for accelerating innovation and withstanding disruption. Partners can share new technologies and knowledge, open up new routes to market, and help create new business models.

But it isn't enough to get an ecosystem up and running; you also need a way to sustainably monetize it.

IBM learned this back in the 1980s with its personal computer business. Its IBM PC-compatible architecture became the framework used by other companies specializing in hardware and software for delivering powerful, low-cost computing to users. But despite leading the emergence of this ecosystem, IBM failed to extract a sustainable stream of profits for itself, and sold the business to Chinese computer maker Lenovo in 2005.

In our work analyzing company ecosystems, we've found that a firm needs to do three things if it wants a sustainable profit stream from the ecosystems it has created.

First, it must identify a keystone contribution, some element or activity it can uniquely own and control that is essential for the ecosystem to create value for customers. For example, the chip designer ARM Holdings, which I've worked with for over a decade, had a keystone contribution with its chip designs. It partners with major phone makers including Apple, Samsung, and Huawei, as well as many of the leading semiconductor fabricators such as Intel and Taiwan Semiconductor. Its chips go into 90% of smartphones. Phone makers can't switch to designs from an alternative supplier without making heavy investments in additional tools, processes, and training. Having invested years in building close, trusted relationships with its partners, ARM is uniquely able to access their product road maps, making it hard for any competitor to imitate its chip design.

Second, an ecosystem leader needs to establish an efficient "tollgate" to collect revenues when partners use its keystone contribution. The tolls may take the form of: license fees, royalties, or commissions on transactions within the ecosystem; a share in the revenues of the products and services that partners supply; or the profits on value-added products or services created using the data and knowledge from the ecosystem. The size of the toll needs to balance the lure of increased profitability for the ecosystem leader against the risk of extracting so much that it milks the ecosystem dry, leaving too little upside for partners to keep them engaged.

Of course, the toll for any single type of transaction, activity, or partnership can be only so high. Leaders must also diversify their revenue sources. That means designing multiple tollgates at different points in the ecosystem. Many of the ecosystems we've analyzed, such as those of Alibaba, Amazon, ARM, and Thomson Reuters, have generated profits without inflicting too much pain on partners or customers, using multiple tollgates that each collect a small fee. ARM, for example, charges one-off license fees to anyone who wants the right to its proprietary IP. But it also charges a royalty on the sale of every unit of the devices that embody its designs. It derives a double benefit as the ecosystem expands: Its revenues and profits grow when new participants join the ecosystem as well as when as existing partners grow their sales. Designing your monetization so that revenues and profits grow as the ecosystem expands avoids burdening it with large fixed costs and stifling its growth when it is small and underdeveloped.

Another useful strategy we've observed is to vary the charges between participants, subsidizing some and demanding a higher share of the value created from others. You want to collect lower tolls from those who contribute enormously or those who derive less value but nonetheless play a useful role in the ecosystem. Alibaba, for example, invites small sellers on its business to consumer site, Taobao, to join for free, with the option to buy value-added services, while large retailers on its high-end Tmall platform pay a substantial up-front listing fee as well as commissions.

Third, leaders need to find a way to leverage the ecosystem to innovate and find ways to renew the keystone contributions. This means establishing reliable and ethical channels to accumulate data on the activities of partners and customers, and processes for innovating on insights gleaned. Thomson Reuters, for example, created a simple mobile app that enabled farmers to upload data about the acreage they planted and provide updates on the condition of their crops. In exchange, farmers received aggregate information and analysis of trends, along with weather reports. Thomson Reuters used the data in its models to develop more accurate forecasts for crop volumes and prices, which it then sold to financial traders as part of a new suite of services, opening up an additional revenue stream.

While some learning needs to remain proprietary, some can be shared with partners to help make the ecosystem more productive. Alibaba aggregates and analyzes user data from the millions of websites that are part of its ecosystem, to distill unique insights about its buyers' shopping preferences and habits. It then shares these insights to help its partners make better product marketing decisions.

Beyond customer data, ecosystems can also provide a wealth of other insights that can be monetized. By working closely with diverse partners across its industry, for example, ARM gains unique insights about future technology and product trends. This knowledge has helped it enter new application markets for its chip designs in cars, health care, infrastructure, and wearable devices, each opening up new revenue opportunities.

By focusing on these three priorities, companies can establish sustainable profit streams, ensuring their ecosystems work for them.

China is not the only one that has to change its business practices, says Yale's Stephen Roach - CNBC

Posted: 30 Sep 2019 08:53 PM PDT

The U.S. — and other countries — has complained about the difficulties of doing business in China, but the Asian economic giant is not the only one that should change its practices, according to a prominent economist.

America, too, has to re-examine the way it's engaging with China right now to address those complaints, said Stephen Roach, a senior fellow at Yale University. Concerns that foreign businesses have raised about China include being forced to transfer technology to their Chinese partners and government subsidies for state-owned enterprises that distort competition.

"I think we need to make some big changes in the way we do business together. I hesitate to say all the onus of change just fall on China," Roach, who's also a former chairman for Morgan Stanley Asia, told CNBC's "Squawk Box Asia" on Tuesday.

He added that instead of using threats to force China to change its trade and business practices, the U.S. may find it more effective to negotiate a bilateral investment treaty with the Asian country.

'Adversarial' US-China relations

Nevertheless, moves that seek to "decouple" the U.S. and China could set "a very dangerous precedent," Gary Locke, former U.S. ambassador to China from 2011 to 2014, told CNBC's "Squawk Box Asia" on Tuesday.

"Are we to stop all exports, whether farm goods or manufactured goods from medical equipment to food to Boeing airplanes, to China? Where does this end?" asked Locke, who was U.S. secretary of Commerce from 2009 to 2011 under President Barack Obama.

The U.S. and China — the world's top two economies — have been engaged in a trade war that lasted more than a year. The two countries have slapped elevated tariffs on billions of U.S. dollars worth of each other's products. The uncertainties surrounding how both sides could resolve the trade fight have rocked financial markets and hurt business confidence globally.

Washington has long accused Beijing of unfair trade practices that includes intellectual property theft, lack of equal local market access, and forced technology transfers. But, addressing those concerns have been overshadowed by the broad "adversarial relationship" between the two countries, according to Robert Kapp, president at Robert A. Kapp & Associates.

"We started with a list of American grievances that was presented to the Chinese at the beginning of the Lighthizer negotiations. And there were some very serious matters on that list," Kapp, who was previously president of the U.S.-China Business Council, told CNBC's "Street Signs Asia." He was referring to U.S. Trade Representative Robert Lighthizer.

That has "degenerated now into a tit-for-tat tariff exchange, in which, it seems that the personalities and the staying powers of the leaders are more important," he added. "We'll have to see whether Lighthizer and Liu He can get back to some of the very serious matters that the United States has raised with China that need to be addressed."

Two out of three UK business leaders think tech skills matter more than math and science - CNBC

Posted: 30 Sep 2019 04:18 PM PDT

vgajic | Getty Images

More than two-thirds (68%) of UK business leaders believe employees with technology skills such as coding and cybersecurity are more valuable than those who understand traditional subjects such as math and science.

A poll of 502 Information Technology (IT) decision makers from different UK firms found that 53% did not think children were taught enough tech specialisms at school.

The survey, carried out by Censuswide on behalf of tech jobs board CWJobs, also found three-quarters (73%) of employers felt tech education needed to happen at either primary or secondary school level.

"If the UK introduces students to tech at an early stage and highlights the diversity of the careers it can lead to, then we can equip them for the future," said Dominic Harvey, director at CWJobs, in the report released Tuesday.

"It will also help plug that much-publicized skills gap found in the tech sector currently," he added.

Cybersecurity top rated tech skill

The CWJobs 'More Than Code' report referred to another survey from consultancy Deloitte which said that nearly two-thirds (62%) of UK business executives said their tech talent pool did not have the capability to deliver their digital strategy.

This was placed as a backdrop to its own research which revealed 63% of business leaders would hire someone with a tech specialism over a candidate without one, in order to futureproof their company.

A similar amount said they would opt for employing the tech-savvy candidate so that they would be able to train others (64%) or offer bosses the chance to learn themselves (62%).

Cybersecurity was the most in-demand specialism, with 79% citing it as the preferred tech skill, ahead of data analytics and business intelligence.

However, cloud computing was most common among employees' existing tech skills (44%), ahead of cybersecurity (43%).

"The UK is facing a skills crisis and those with tech specialisms on their CV are being sought after by all companies, now more than ever," Harvey commented.

"What's clear is that learning a tech skill isn't just something that's relevant for one role or one industry, but the entire UK workforce needs to be embracing it if the country is to remain competitive on the world stage."

Side-step into the 'dream' industries

Harvey noted that technology skills also offered a "side-step into 'dream' industries" such as film, sports, music and environmentalism.

He pointed out that the availability of tech skills in such industries both enabled companies to "fast-track projects they are already working on or bring in new innovation."

The report also highlighted why cybersecurity was often the preferred tech skill among employees by more than three-quarters (76%) of the leisure industry.

"Not only do sporting companies want to use their data to their advantage but its value is also becoming increasingly important and could be devastating if it fell into the hands of a rival."

Comments

Popular posts from this blog

10 Best New Age Business Ideas - CT Post

COVID-19: New business ideas emerge as people work from home - The Jakarta Post - Jakarta Post

$10,000 up for grabs during annual Citadel competition for business ideas - ABC NEWS 4