In this guest post, Rhonda Best, director at Alexander Bain, a pioneering management consultancy focused on businesses with revenues up to £50m, discusses growth strategies for SMEs.
What’s the big industry secret? I’d cut right to the chase and tell you. Not everyone is using the traditional business plan. Shock, horror, gasp! Yes, we all remember that 50+ page document that our accountant, banker or advisor told us to spend hours creating; well it is no longer the only accepted way to document business strategy.
The thing is, those using the new alternative are achieving better results – faster. Yes it’s true the alternative is working better than the original and is being taught at the Harvard Business School and other leading universities. The business canvas model helps business owners simplify developing growth strategies as it uses a single page. In brief, here’s what it does and how a strong business model worked for one business:
- Customer segment – this focuses on who the customers are for the business.
- Value proposition – whether a virtual or physical product the value proposition represents what you would sell to your customer segment.
- Channels – this category represents how the customer segment gets the value you offer.
- Customer relationships – are the ways in which you create demand for the value you offer.
- Revenue – this is what the segment wants to pay for your solution.
- Key resources – these are all the things that the business needs to be in order to run.
- Key activities – these are what the resources do for the business.
- Key partners – these are the people, organisations or other businesses that you rely on to help you leverage the model
- Cost structure – this is the resulting cost of the model structure.
So what’s your view on planning? As a business owner do you maintain that the business should produce the long document staff seldom read or something succinct they readily understand? A simple decision right? Well, consider this one case first.
Bishopsgate Financial, incorporated in 2008, is a specialist change management provider for the banking sector. They had focused on a niche, the financial services sector, within which their founders already had a strong network, having worked a combined 45 years there. Their value proposition were 6 specific service types. The primary channel they used was the cloud, an inexpensive, fast delivery method which their market trusted. They created demand initially through their network and later benefited from their brand positioning across the industry. High quality services they offered were in demand during the economic crisis, so their customer segment was willing to pay top rates. They in turn hired the best to consistently produce the best results. They partnered with high end technology businesses and built a cost structure which facilitated a high margin.
By perfecting this strategy at a time when banks most needed the service they increased revenue to £10m in just 5 years after start up. They were awarded 4th place on the 2013 Sunday Times fast track list.
Find out more about the business canvas model at http://www.alexanderbain.co.uk/business-model/.