We have explored the Business Model Canvas and identified our key proposition and how we can apply design thinking as a tool to develop your innovative business model.
The Business Model Canvas is just the starting point. If you are considering accessing funding from a financial institution, partnerships or investor funding, you may need to consider completing a more detailed business plan, not just the business model canvas.
The first thing many excited new online business operators do is set up a website and go live with their online business. Sadly, this is the last thing they should do! Every good business needs to start with a plan first. At its simplest form, a business plan is a document that describes what you plan to do, and how you plan to do it.
Above all, the business plan will provide the foundation of your idea, giving it structure and strength. It shouldn’t be seen as a hurdle, rather, think of it as a ladder that will help you reach higher.
How will a business plan help your online business?
A well structured and well thought out business plan helps your online business in many ways. It helps:
- Establish the key activities that need to be undertaken to achieve the business’s goals and objectives
- Identify the financial, physical, intellectual and human resources that are necessary to run the business and sell its products and/or services
- Identify and define key business partners and suppliers
- Establish the value proposition that sets the business apart from its competitors
- Identify customer segments that your business will service and their wants and needs
- Define the types of customer relationships you want your business to have with its various customer segments
- Focus on those distribution channels through which the business intends to distribute its products and services (in this case it is online)
- Determine the fixed and variable costs of operating the business
- Refine the ways in which it will generate revenue/income to ensure the business is profitable (e.g. sale of products, fee for services).
The next section will look at the components of a business plan in further detail.
We’ve heard about the many reasons for writing a business plan. Now think about how writing a business plan will help you.
What area do you need to focus on the most?
What do you want from your business plan?
Share your thoughts in comments section and post responses to others facing the same challenges.
© RMIT University 2016