Entrepreneurs use business plans to help others see a vision for their companies. The greatest value of writing a plan, though, is the process of thinking through the decisions made during the chaotic launch experience.
In the very early planning stages, entrepreneurs develop a business “canvas” to help them identify how their business model works. Log on to www.BusinessModelGeneration.com/canvas/bmc for a two-minute video that explains how to create a business canvas for your own operation.
In brief, the canvas forces entrepreneurs to identify the key value proposition the company brings to customers, important characteristics of the client relationship and the marketing channels used to acquire new customers. Ideal customers also are targeted in this process.
To make good on their value promises, companies identify key activities required to deliver customer satisfaction and the most important resources they bring to the table. In addition, strategic partners are identified and costs spelled out, as are the primary sources of revenue. These business basics constitute the core framework for the business model. Numerous details flesh out the new company, but understanding the core business requires an ability to lay out the primary drivers on the business canvas.
Tom Benton, acting director of the Maverick Innovation Center at Colorado Mesa University in Grand Junction, said creating a business canvas helps student entrepreneurs gauge the need for their products or services. “As part of the process, they learn how their product fits into the market — either as an add-on value idea or, best of all, as a true industry disruptor.” Students across other academic disciplines could be invited in to enhance the concept. “The collaborative approach helps with product iterations, much like what occurs in industrial trials they may experience after their college years,” Benton said. “These activities may result in some parts of the process being internally developed and other parts of the process outsourced.”
The innovation center is home to classes that focus on three stages of business development. A boot camp class focuses on the fundamentals of building a business for tomorrow’s demands. As students’ interests grow, they enter the hatchery program that helps them launch businesses and create business canvases of their own. The final stage, the accelerator, allows students to truly launch their ideas through the formation of new business entities. One of the natural outcomes that other communities have seen is that these startups play a role in diversifying the economy and creating new jobs.
Small business used to mean “local” business-to-consumer and business-to-business operations. Because it’s easier to work remotely these days, small businesses can more easily grow into big businesses. Small businesses often create new technologies and products that are eventually sold to big businesses that incorporate them into a broader distribution system. Even as the ranks of old-fashioned neighborhood businesses shrinks, the possibilities for small businesses selling into a rapidly changing global business world expands.
“We are extremely fortunate to have a number of local business men and women volunteer to share their knowledge and experience as part of this program,” Benton said. “These community members are truly committed to Mesa County and our economic future, and are willing to be part of the team that is creating our next generation of innovative companies. In the mid- to late-1980s, a group of visionary businessmen actively recruited manufacturing companies to replace the gap left by Exxon. A number of these entities remain today, and the common thread in most cases is that they were founded by first-generation innovators. Encouraging and supporting that spirit is essential in a progressive community and a real advantage for CMU students who have the aptitude, desire and courage to pursue an idea of their own.”
The innovation center uses tools like the business canvas to help teach students how to create successful business models and understand what makes them successful. The center harnesses students’ natural energy and willingness to find new solutions to today’s challenges and creates new opportunities that will likely benefit people across the Grand Valley.
The center can help our entire business community grow and evolve. Since the financial crisis began in 2008, the Grand Valley has lost a little over 10,000 jobs. One of the solutions to the problem of industrial concentration will be in the minds of some young entrepreneurs. Painting that picture of success on a business canvas is an important first step to improving the economic base for everyone in the Grand Valley.