Business Model Canvas Key Resources
Business Model Canvas Key Resources: In the article Business Model vs. Business Plan we introduced the business model and its three components:
- Value creation
- Proposing the value to the customer
- Converting this value into money
However, in the Business Model Canvas designed by Alexander Osterwalder, these three sections are discussed in 9 parts.
Learn more: Business Model Canvas
As you can see in the above article, the central part of the business model canvas is the Value Proposition. You need to properly understand the value that your business creates for the customer, and in the next step, look for key sources to develop and present this value. These resources are the business model canvas key resources that are the subject of this article.
Learn more: Value Creation, the Modern Businesses Need
Osterwalder introduces these sources in four parts:
- Physical Resources
- Intellectual / Intangible Resources
- Human Resources
- Financial Resources
Of course, business model canvas key resources are not limited to these four. For example, the distribution and customer access channel is a resource. However, in the business model canvas, some of these resources are discussed in other parts of the 9-section. So what remains in the key resource section are these four.
Key Resources in Business Model Canvas Funds
We are always reminded of the money we need to start our own business when it comes to resources. So, it is natural to expect a room for financial resources in our business model.These sources may be cash, supplier credit , or any other form of funding.
However, attracting and managing financial resources is a complicated process that requires using professionals. Still, you need to keep this critical point in mind:
Do not limit yourself to one “figure” when determining the required financial resources. For example, don’t say, “I need X million dollars to start this business.” Instead, specify your cash flow.
A simple example of the cash inflow is to say: “I need X dollars in the first month of starting a business. After that, I will need Y dollars every month for six months, and then, until the twelfth month, I will need Z dollars per month.”
Also, consider the credits as a vital source of funding.
For instance, you might say that I expect Company X to provide us with Y dollars of its services in the first quarter and receive the money a year later (or receive a portion of our stock).
Learn more: Financial
This type of credit allocation plays an essential role in start-ups that emerge from larger businesses or within holdings.
Human force is another key resource of the business model, which has various meanings and structures in different business.
For example, when it comes to a factory in a small town, the best human forces are those who live in that town. The cost of hiring non-native employees is high. On the other hand, to sell your products, you need to satisfy the locals through employing them.
As another example, when we talk about a software company, the condition is different. Human resources should be the professionals, highly skilled in their job.
Despite the importance of human resources, many startups do not consider it a challenge. They start without employing people they need to create value. However, such a move would be to the detriment of the startup. Because:
- The scale of the business grows. If your business model is to be implemented on a larger scale, the provision and development of human resources can be the bottleneck of your growth.
- Usually, startups that do not care about hiring human resources also do not clearly define the role of their core members. This can lead to conflicts and disagreements when the startup reaches profitability.
When writing down the required human resources list, you would better adjust it based on competencies.Determining how many employees you need is not enough. You must also take their characteristics and capabilities into consideration. for example:
- An extroverted, active marketer who can travel to different states.
- A skilled employee, familiar with financial and legal issues that can spare two days a week.
- Someone familiar with the business principles, fluent in German language who can efficiently interact with customs.
Regardless of whether your business model requires three or three hundred people; A merit-based HR list helps make your business model more transparent.
In addition, this list will help you remember the role of each of the team members in later years.
Physical resources have a wide range. The following are just a few examples:
- Office Equipment
- Industry silo
- Servers and telecommunication Equipment
- Raw materials
Remember that the key to write a good business model is transparency. You need to set it up so that you have a clear picture of the business in your mind. So, define the physical resources as much as possible and list them all.
Intellectual / Intangible Resources
Although these resources play an important role in the business model and its success, they are sometimes entirely overlooked.
The following are just a few examples of intellectual/intangible resources:
- legal licenses
- Specific technical knowledge and technologies
Sometimes, you can delay providing some of these resources such as registering your brand.However, in some business models, it’s not possible. For example, if you are sure that you need a well-known brand to launch your product, you probably need to design your business model to fit one of the existing businesses. Otherwise, you will simply fail in the form of an independent business.
Sometimes, getting some of these resources takes time and effort. For example, you may have to study and read a lot of books and articles. In other cases you may need to sign a contract. For example, a license agreement to use a company’s technical knowledge.
It’s Sometimes Challenging
Answering some questions about intellectual/intangible resources may be more difficult than it seems. For example, consider the Data as an intellectual resource. At first look it seems obvious. Now, suppose you want to launch an online bookstore in the field of management. You need to answer these questions and similar ones to collect data you need:
- Do you need the list of five hundred best-selling books of the last three years?
- If required, do you need to know how many of these books are electronic and how many are printed?
- How can you access this data?
You may encounter similar problems in providing other intellectual/intangible resources. These resources are vaguer than physical/human and financial resources. So, you need to focus on them more deeply.