Business Planning – why is a good business model critical?
Business models are often not well described in business
plans. Many standard business planning
templates do not even have a section where the business model can be outlined
and clearly explained.
An image often provides the clearest overview of the business model. A business model diagram should include 9 key elements of business model design.
- Value Proposition – What are you offering?
- Capabilities/Resources – What skills and capacity do you require?
- Partnership – Who do you need to work with?
- Activities – What will you do?
- Costs – What are your significant costs likely to be?
- Relationship – What formal and informal relationships are required
- Channel – What are our channels to market?
- Revenues – What will our customers pay for?
- Customers – Who are our customers?
After developing hundreds of business plans for clients, we have developed a proven business planning technique called “question led business planning”. This technique uses questions to draw out of the planner the key business elements and re-assembles these into a comprehensive business plan. This approach has been combined with document automation to provide a new level of flexibility in business planning. By answering core business model questions, a business plan, executive summary or presentation can be automatically created. All structural and language issues are taken care of for the user, leaving them free to focus on answering a series of questions about their business.