Business colleges and consultants used to drone on and on about the importance of a business plan. Anyone who has tackled one in the early stages of business will tell you that it is daunting to do and about as useful as a dusty ream of paper lying on a shelf.
Oh, wait! That’s what a business plan becomes… eventually.
Conductor Leonard Bernstein was onto something when he came up with the quote for this section. A business plan takes a long time to craft, and in that time, you could be acting on your new idea before someone else steals your thunder with a similar product or service.
A Business Model Canvas is an easy way to visually and quickly describe how your business is going to make money. It covers who your customers are, how you deliver value to them, what the supply chain needs to look like and how you’re going to finance it – all on one page.
Just as an artist uses the canvas to paint a picture, the Business Model Canvas allows you to describe your ideas. It also gives you a way to create a pretty clear business model on just one sheet of paper. This model can be used for any type of business, from a niche market that focuses on the needs of a smaller group of customers to a mass market that communicates with the largest possible audience.
While many startups waste precious time writing endless pages for a business plan destined to collect dust, savvy entrepreneurs use a Business Model Canvas to quickly formulate their model. A business plan is essential if you’re going after a loan with a bank, but the Canvas can outperform a business plan in specific ways:
- Readable: A single page is preferable to the 30 to 50 pages the Small Business Administration recommends for a business plan.
- Focused: Business plans include lots of fluff that provides no value to the reader. The Business Canvas Model layout requires you to be succinct and to get to the point.
- Flexible: It’s easier to make changes and pivot with a Business Canvas than a business plan.
- Customer-centric: By design, the focus is on the customer, not the product or service.
- Connected: The one-page model quickly shows how each critical segment of the business is interconnected versus a business plan where these connections aren’t as obvious or even addressed.
- Responsive: People will take the time to read a one-page document and provide you with tangible, actionable feedback. Try that with a 30 to 50-page business plan.