The Business Plan Canvas as a source of innovation for SMEs and interpreters

Last November, at a business conference where I was working as an interpreter, I heard about the concept of the “Business Plan Canvas” as an innovative management tool for start-ups. For me, this is an exciting concept, not only for start-ups, but also for all other types of small (to medium-sized) companies that – unlike large multinational corporations – cannot afford to set up separate companies to deal solely with the issues of developing and testing new product and service concepts.

What is a Business Plan Canvas (BPC)?

The ‘Business Plan Canvas’ concept was developed by Alexander Osterwalder1. It is a template for a lean strategic management tool that summarizes the most important aspects of a new product or service on just one page. Why is this instrument needed? In the ‘good old days’, the approval of a new product or service (i.e. basically any kind of innovation) required a business plan. This relatively detailed document (at least judging by the fact that it described something that did not yet exist and that most of the forecasts were based on assumptions) was considered an important prerequisite for an idea to be heard in the first place. That was before. In recent years, Silicon Valley and other start-up regions have taught large corporations one lesson after another. Within a very short space of time, start-ups have turned entire industries upside down with their dynamism, which is often more of an urge to innovate. Since then, many company bosses have traveled to Silicon Valley to find out what is driving this innovation. They heard about lean, flexible, dynamic structures that promote intrinsic motivation and therefore innovative strength. As a result, many large corporations founded their own separate companies to act as drivers of innovation. What information is recorded on a BPC? On a single page, a BPC captures ‘infrastructure’ items such as ‘key activities’, ‘key resources’ and the ‘key partnerships’. Under ‘Customer benefits’ is the value proposition, i.e. the reason why this product or service offers added value for customers. The section on ‘Customer relationships’ and ‘Sales channels’ provides an overview of the major market topics, channels and customer relationships. ‘Revenue sources’ or ‘Cost structure’ summarizes information about revenue sources and the cost structure. The idea behind this is to first try out whether an idea works. Only if it does is a business plan drawn up for financing, etc. Why should you use BPCs even if you are not a start-up? In short, because we need to be and stay innovative to maintain customer loyalty. SMEs often don’t have the resources (either human or financial) to set up separate companies to ‘try out new ideas’. However, they cannot and should not rest on their laurels either. A BPC is a lean, clear and easy-to-use way to question and challenge yourself as an SME, or interpreter or translator. In this way, ideas for new products and services can be tested without having to invest too much time or money. It can also be a source of motivation for your team and/or employees. For example, SMEs could also use ideas that came up as part of their Kaizen process (or other continuous improvement processes) to ‘test’ them. It’s clear that every employee who sees their idea being taken seriously and tried out feels valued and motivated – perhaps the source of the next great idea. If the customer’s feedback is then incorporated, customer loyalty can be further strengthened. Ultimately, the goal of every entrepreneur is to create added value for their customers. In the face of global competition, only those who offer them added value will have satisfied, loyal customers in the long term. So let’s take up this challenge – for new or improved products and services and satisfied customers! 1Osterwalder, A. (2011). Business Model Generation: A Handbook for Visionaries, Game Changers and Challengers, Campus Verlag. You can download the German template of a BPC from the following website: http://www.starting-up.de/fileadmin/images/Gruenden/Businessplan/business_model_canvas.pdf (accessed on February 18, 2016).