what are key resources in a business plan

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Resource Planning For Your Business Plan

Identifying the resources you need to grow your business

Why Is Resource Planning Important

How to start resource planning, the bottom line, frequently asked questions (faqs).

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A business plan helps you organize your goals and growth plans for your business. Identifying business resources you'll be starting your business with already, and accounting for the resources you'll need to acquire after launching the business, is a crucial step in business planning.

Key Takeaways

• A business plan helps you organize your goals and growth plans for your business.
• Resource planning help you account for resources you have, plan for resources you need and ways to optimize their use
• You can plan for physical, people and technical resources in your business plan

Resource planning help you account for resources you have, plan for resources you need and ways to optimize their use. Among other things, even the most simple business plans are designed to walk you through the activity of describing every source and the exact dollar amount of your initial equity capital, as well as account for the equipment necessary to produce your products or services.

It can be difficult to accurately estimate your future resource needs, which is why this startup mistake is one of the most frequent contributors to young businesses running out of cash early on.

A very important section in your business plan is about the finances of your business, and that includes how much you hope to spend on resources you need to acquire and maintenance expenses on assets you own. Your plans for obtaining the necessary personnel, equipment, and cash to meet your capital expenses will need to be detailed throughout your business plan.

You may need financing from a bank or investors or will invest your personal savings in the business, and resource planning will come in handy for that too.

Resource allocation plans are what your potential investors and business partners are going to need to see before jumping on board with your new company.

There are different types of resources and you need to budget and plan for them accordingly. In describing each of the resources that you have and need for your business to reach profitability, position each of them in terms of the value it will bring to the company, both in the near term and down the road.

To figure out exactly which resources your business is going to need, and account for those in your business planning process, ask yourself these two crucial questions:

• Does starting and growing your business require having staff on hand? If your business relies upon output from people other than yourself and your business partners, you're going to need to allocate resources for hiring staff at fair market rates. 
• What type of equipment or fixed assets will your business need to get going? If your business is dependent upon purchasing or leasing equipment or other fixed assets like retail and office space, these are major considerations as you plan out your resource allocation.

Physical Assets

Depending on the nature of your business, you may have varying need for physical assets. However, in all likelihood you'd need some sort of office furniture and definitely some computers. Physical assets could also include office space, storefronts, manufacturing facilities and equipment necessary for your business. For example, if you own a baked good business, baking equipment like mixers and ovens would be physical assets you'd need to plan for.

Personnel and People

There are different types of people that can be a part of your business. People you hire, for example, can be employees or independent contractors and there are different cost implications for your business depending on whether you hire the former or the latter.

Investing in skills and capacities for people in your business is also an important part of resource planning.

How about mentors, key advisors, supplier connections, and other intangible resources for your business? These types of relationships whose value to your business can be immense, also need to be accounted for within your business plan as they'll have a very large impact on the future growth of your company.

Think of the massively positive effect your company would experience if you had a friend or family member that was a decision-maker at a large company who'd be your perfect first customer. It would undoubtedly be one of your key strategies for driving the early growth of your company. So, as you're planning your resource allocation, you'd naturally be spending in areas that make your young business more appealing to the target customers you want to serve.

Technical Resources

It is a good time to evaluate your technical resources and requirements as well. Some businesses rely more heavily on technology or intellectual property than others. Technology-dependent companies will need a strong IT network to get started. If building your own website won't be any trouble, then that's one major cost you'll be able to avoid as you get started with your company. Otherwise, you may need to allocate for web design, development, and other website-related expenses.

Regardless of your situation, don't be intimidated by the upfront costs of starting a business. Instead, keep in mind that in today's age, your product or service will only be as good as the technology that supports it, and if you buy or build low-grade gear, you’ll probably have to replace it in a few years anyway.

Clearly, there are a lot of different expenses to take into account as you allocate the resources for your new business. However, forcing yourself to go through this activity in extreme detail while building your business plan will save you a lot of headaches and potential failures in the future.

What are assets and resources in a business plan?

Resources can be anything that helps you operate or run your business. Assets are a type of resources that help you achieve you business. Assets can be cash, or physical assets such as equipment or intangible assets such as the brand of your business. In a business plan, you talk about the resources you have and the resources you need to acquire to help your business grow. You also account for your assets on your balance sheet. A strong balance sheet presented in your business plan can be appealing to potential investors.

Which components of a business plan are most useful to attract investors?

Each section of a business plan is important to potential investors. An executive summary gives your investors an elevator pitch to your business. Company description explains to them how your business is solving a market need, while market analysis shows investors you understand your industry and competition. Sections on organization, product details and marketing plans dig deeper into your vision for your business and how its organized. And the financial information component helps them see if you idea is worth putting their money into.

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How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated April 17, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).

But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

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How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

What’s the difference between a business plan and a strategic plan?

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan
• Templates and examples

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Table of Contents

How to make a good business plan: step-by-step guide.

A business plan is a strategic roadmap used to navigate the challenging journey of entrepreneurship. It's the foundation upon which you build a successful business.

A well-crafted business plan can help you define your vision, clarify your goals, and identify potential problems before they arise.

But where do you start? How do you create a business plan that sets you up for success?

This article will explore the step-by-step process of creating a comprehensive business plan.

What is a business plan?

A business plan is a formal document that outlines a business's objectives, strategies, and operational procedures. It typically includes the following information about a company:

Products or services

Target market

Competitors

Marketing and sales strategies

Financial plan

Management team

A business plan serves as a roadmap for a company's success and provides a blueprint for its growth and development. It helps entrepreneurs and business owners organize their ideas, evaluate the feasibility, and identify potential challenges and opportunities.

As well as serving as a guide for business owners, a business plan can attract investors and secure funding. It demonstrates the company's understanding of the market, its ability to generate revenue and profits, and its strategy for managing risks and achieving success.

Business plan vs. business model canvas

A business plan may seem similar to a business model canvas, but each document serves a different purpose.

A business model canvas is a high-level overview that helps entrepreneurs and business owners quickly test and iterate their ideas. It is often a one-page document that briefly outlines the following:

Key partnerships

Key activities

Key propositions

Customer relationships

Customer segments

Key resources

Cost structure

Revenue streams

On the other hand, a Business Plan Template provides a more in-depth analysis of a company's strategy and operations. It is typically a lengthy document and requires significant time and effort to develop.

A business model shouldn’t replace a business plan, and vice versa. Business owners should lay the foundations and visually capture the most important information with a Business Model Canvas Template . Because this is a fast and efficient way to communicate a business idea, a business model canvas is a good starting point before developing a more comprehensive business plan.

A business plan can aim to secure funding from investors or lenders, while a business model canvas communicates a business idea to potential customers or partners.

Why is a business plan important?

A business plan is crucial for any entrepreneur or business owner wanting to increase their chances of success.

Here are some of the many benefits of having a thorough business plan.

Helps to define the business goals and objectives

A business plan encourages you to think critically about your goals and objectives. Doing so lets you clearly understand what you want to achieve and how you plan to get there.

A well-defined set of goals, objectives, and key results also provides a sense of direction and purpose, which helps keep business owners focused and motivated.

Guides decision-making

A business plan requires you to consider different scenarios and potential problems that may arise in your business. This awareness allows you to devise strategies to deal with these issues and avoid pitfalls.

With a clear plan, entrepreneurs can make informed decisions aligning with their overall business goals and objectives. This helps reduce the risk of making costly mistakes and ensures they make decisions with long-term success in mind.

Attracts investors and secures funding

Investors and lenders often require a business plan before considering investing in your business. A document that outlines the company's goals, objectives, and financial forecasts can help instill confidence in potential investors and lenders.

A well-written business plan demonstrates that you have thoroughly thought through your business idea and have a solid plan for success.

Identifies potential challenges and risks

A business plan requires entrepreneurs to consider potential challenges and risks that could impact their business. For example:

Is there enough demand for my product or service?

Will I have enough capital to start my business?

Is the market oversaturated with too many competitors?

What will happen if my marketing strategy is ineffective?

By identifying these potential challenges, entrepreneurs can develop strategies to mitigate risks and overcome challenges. This can reduce the likelihood of costly mistakes and ensure the business is well-positioned to take on any challenges.

Provides a basis for measuring success

A business plan serves as a framework for measuring success by providing clear goals and financial projections . Entrepreneurs can regularly refer to the original business plan as a benchmark to measure progress. By comparing the current business position to initial forecasts, business owners can answer questions such as:

Are we where we want to be at this point?

Did we achieve our goals?

If not, why not, and what do we need to do?

After assessing whether the business is meeting its objectives or falling short, business owners can adjust their strategies as needed.

How to make a business plan step by step

The steps below will guide you through the process of creating a business plan and what key components you need to include.

1. Create an executive summary

Start with a brief overview of your entire plan. The executive summary should cover your business plan's main points and key takeaways.

Keep your executive summary concise and clear with the Executive Summary Template . The simple design helps readers understand the crux of your business plan without reading the entire document.

2. Write your company description

Provide a detailed explanation of your company. Include information on what your company does, the mission statement, and your vision for the future.

Provide additional background information on the history of your company, the founders, and any notable achievements or milestones.

3. Conduct a market analysis

Conduct an in-depth analysis of your industry, competitors, and target market. This is best done with a SWOT analysis to identify your strengths, weaknesses, opportunities, and threats. Next, identify your target market's needs, demographics, and behaviors.

Use the Competitive Analysis Template to brainstorm answers to simple questions like:

What does the current market look like?

Who are your competitors?

What are they offering?

What will give you a competitive advantage?

Who is your target market?

What are they looking for and why?

How will your product or service satisfy a need?

These questions should give you valuable insights into the current market and where your business stands.

4. Describe your products and services

Provide detailed information about your products and services. This includes pricing information, product features, and any unique selling points.

Use the Product/Market Fit Template to explain how your products meet the needs of your target market. Describe what sets them apart from the competition.

5. Design a marketing and sales strategy

Outline how you plan to promote and sell your products. Your marketing strategy and sales strategy should include information about your:

Pricing strategy

Advertising and promotional tactics

Sales channels

The Go to Market Strategy Template is a great way to visually map how you plan to launch your product or service in a new or existing market.

6. Determine budget and financial projections

Document detailed information on your business’ finances. Describe the current financial position of the company and how you expect the finances to play out.

Some details to include in this section are:

Startup costs

Revenue projections

Profit and loss statement

Funding you have received or plan to receive

Strategy for raising funds

7. Set the organization and management structure

Define how your company is structured and who will be responsible for each aspect of the business. Use the Business Organizational Chart Template to visually map the company’s teams, roles, and hierarchy.

As well as the organization and management structure, discuss the legal structure of your business. Clarify whether your business is a corporation, partnership, sole proprietorship, or LLC.

8. Make an action plan

At this point in your business plan, you’ve described what you’re aiming for. But how are you going to get there? The Action Plan Template describes the following steps to move your business plan forward. Outline the next steps you plan to take to bring your business plan to fruition.

Types of business plans

Several types of business plans cater to different purposes and stages of a company's lifecycle. Here are some of the most common types of business plans.

Startup business plan

A startup business plan is typically an entrepreneur's first business plan. This document helps entrepreneurs articulate their business idea when starting a new business.

Not sure how to make a business plan for a startup? It’s pretty similar to a regular business plan, except the primary purpose of a startup business plan is to convince investors to provide funding for the business. A startup business plan also outlines the potential target market, product/service offering, marketing plan, and financial projections.

Strategic business plan

A strategic business plan is a long-term plan that outlines a company's overall strategy, objectives, and tactics. This type of strategic plan focuses on the big picture and helps business owners set goals and priorities and measure progress.

The primary purpose of a strategic business plan is to provide direction and guidance to the company's management team and stakeholders. The plan typically covers a period of three to five years.

Operational business plan

An operational business plan is a detailed document that outlines the day-to-day operations of a business. It focuses on the specific activities and processes required to run the business, such as:

Organizational structure

Staffing plan

Production plan

Quality control

Inventory management

Supply chain

The primary purpose of an operational business plan is to ensure that the business runs efficiently and effectively. It helps business owners manage their resources, track their performance, and identify areas for improvement.

Growth-business plan

A growth-business plan is a strategic plan that outlines how a company plans to expand its business. It helps business owners identify new market opportunities and increase revenue and profitability. The primary purpose of a growth-business plan is to provide a roadmap for the company's expansion and growth.

The 3 Horizons of Growth Template is a great tool to identify new areas of growth. This framework categorizes growth opportunities into three categories: Horizon 1 (core business), Horizon 2 (emerging business), and Horizon 3 (potential business).

One-page business plan

A one-page business plan is a condensed version of a full business plan that focuses on the most critical aspects of a business. It’s a great tool for entrepreneurs who want to quickly communicate their business idea to potential investors, partners, or employees.

A one-page business plan typically includes sections such as business concept, value proposition, revenue streams, and cost structure.

Best practices for how to make a good business plan

Here are some additional tips for creating a business plan:

Use a template

A template can help you organize your thoughts and effectively communicate your business ideas and strategies. Starting with a template can also save you time and effort when formatting your plan.

Miro’s extensive library of customizable templates includes all the necessary sections for a comprehensive business plan. With our templates, you can confidently present your business plans to stakeholders and investors.

Be practical

Avoid overestimating revenue projections or underestimating expenses. Your business plan should be grounded in practical realities like your budget, resources, and capabilities.

Be specific

Provide as much detail as possible in your business plan. A specific plan is easier to execute because it provides clear guidance on what needs to be done and how. Without specific details, your plan may be too broad or vague, making it difficult to know where to start or how to measure success.

Be thorough with your research

Conduct thorough research to fully understand the market, your competitors, and your target audience . By conducting thorough research, you can identify potential risks and challenges your business may face and develop strategies to mitigate them.

Get input from others

It can be easy to become overly focused on your vision and ideas, leading to tunnel vision and a lack of objectivity. By seeking input from others, you can identify potential opportunities you may have overlooked.

Review and revise regularly

A business plan is a living document. You should update it regularly to reflect market, industry, and business changes. Set aside time for regular reviews and revisions to ensure your plan remains relevant and effective.

Create a winning business plan to chart your path to success

Starting or growing a business can be challenging, but it doesn't have to be. Whether you're a seasoned entrepreneur or just starting, a well-written business plan can make or break your business’ success.

The purpose of a business plan is more than just to secure funding and attract investors. It also serves as a roadmap for achieving your business goals and realizing your vision. With the right mindset, tools, and strategies, you can develop a visually appealing, persuasive business plan.

Ready to make an effective business plan that works for you? Check out our library of ready-made strategy and planning templates and chart your path to success.

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Key Resources: Business Model Canvas Explained

The Business Model Canvas is a strategic tool that allows businesses to visualize, design, and innovate their business model. One of the crucial components of this canvas is the 'Key Resources' section. This section is dedicated to the most important assets that a company needs to create and deliver its value proposition. These resources can be physical, financial, intellectual, or human.

Key resources are the strategic assets a company needs to operate and deliver its value proposition. They are the main inputs that a company uses to create its product or service, reach its customer segments, and maintain relationships with them. Understanding and identifying these key resources is crucial for any business model.

Types of Key Resources

Key resources can be categorized into four main types: Physical, Intellectual, Human, and Financial. Each of these categories has its own characteristics and implications for the business model.

Physical resources include tangible assets such as buildings, vehicles, machinery, and inventory. Intellectual resources are intangible assets such as patents, copyrights, and proprietary knowledge. Human resources refer to the skills, talents, and expertise of the company's employees. Financial resources include cash, credit, and other financial assets.

Physical Resources

Physical resources are tangible assets that a company uses in its value creation process. These can include buildings, machinery, vehicles, and inventory. For a manufacturing company, the physical resources might include the factory where the products are made, the machinery used in the production process, and the inventory of raw materials and finished products.

Physical resources can be a significant source of competitive advantage for a company. For example, a company with a strategically located factory might be able to deliver its products more quickly and cheaply than its competitors. Similarly, a company with a large inventory might be able to meet customer demand more effectively.

Intellectual Resources

Intellectual resources are intangible assets that a company uses to create value. These can include patents, copyrights, trademarks, proprietary knowledge, and brand reputation. For a technology company, the intellectual resources might include the patents for its technology, the proprietary software it has developed, and the brand reputation it has built over time.

Intellectual resources can be a significant source of competitive advantage for a company. For example, a company with a strong patent portfolio might be able to prevent competitors from copying its technology. Similarly, a company with a strong brand reputation might be able to charge higher prices for its products or services.

Importance of Key Resources

Key resources are crucial for a company's success because they enable the company to create and deliver its value proposition. Without the necessary resources, a company would not be able to produce its product or service, reach its customer segments, or maintain relationships with its customers.

Moreover, key resources can be a source of competitive advantage for a company. A company with unique or superior resources can differentiate itself from its competitors and achieve a competitive edge. For example, a company with a highly skilled workforce might be able to deliver superior quality products or services. Similarly, a company with a strong patent portfolio might be able to prevent competitors from copying its technology.

Role in Value Creation

Key resources play a crucial role in the value creation process . They are the main inputs that a company uses to create its product or service. For example, a manufacturing company uses physical resources such as machinery and raw materials to produce its products. A software company uses intellectual resources such as proprietary software and technical expertise to develop its software.

The quality and efficiency of a company's key resources can significantly impact the quality and value of its product or service. For example, a company with high-quality machinery and skilled workers can produce high-quality products. Similarly, a company with efficient processes and systems can deliver its services more quickly and cost-effectively.

Role in Revenue Growth and Innovation

Key resources also play a crucial role in revenue growth and innovation. A company with strong key resources can leverage them to create new products or services, enter new markets, or improve its existing offerings. This can lead to increased revenue and growth for the company.

For example, a technology company with a strong patent portfolio can use its patents to develop new technologies and products. A company with a skilled R&D team can use its expertise to innovate and create new solutions. Similarly, a company with a strong financial position can invest in research and development, acquisitions, or market expansion to drive growth and innovation.

Identifying Key Resources

Identifying the key resources of a company is a crucial part of the business model canvas. It involves understanding the main inputs that the company uses to create its product or service, reach its customer segments, and maintain relationships with its customers.

This process requires a deep understanding of the company's value proposition, customer segments, channels, customer relationships, and revenue streams. It also requires a thorough analysis of the company's operations, processes, and capabilities.

Understanding the Value Proposition

The first step in identifying the key resources is understanding the company's value proposition . The value proposition is the unique combination of products or services that a company offers to its customers. It describes how the company solves its customers' problems and meets their needs.

The key resources needed to deliver this value proposition are the physical, intellectual, human, and financial assets that the company uses to create and deliver its products or services. For example, a software company's key resources might include its proprietary software, technical expertise, and customer relationships.

Analyzing the Operations and Capabilities

The next step in identifying the key resources is analyzing the company's operations and capabilities. This involves examining the company's processes, systems, and infrastructure to understand how it creates and delivers its value proposition.

This analysis can reveal the key resources that the company uses in its operations. For example, a manufacturing company's key resources might include its production facilities, machinery, and raw materials. A service company's key resources might include its customer service personnel, IT systems, and customer relationships.

Managing Key Resources

Once the key resources have been identified, the next step is to manage them effectively. This involves ensuring that the resources are available when needed, used efficiently, and maintained properly. It also involves investing in the development and improvement of the resources to enhance their value and competitive advantage.

Effective management of key resources can enhance a company's performance and profitability. It can also improve the company's ability to innovate and adapt to changes in the market.

Availability and Efficiency

The availability and efficiency of key resources are crucial for a company's operations. The company needs to ensure that the resources are available when needed and used efficiently. This can involve scheduling and planning activities, optimizing processes and systems, and managing inventory and supply chains.

For example, a manufacturing company needs to ensure that its machinery is available and operating efficiently to produce its products. A service company needs to ensure that its customer service personnel are available and efficient in handling customer inquiries and complaints.

Maintenance and Improvement

The maintenance and improvement of key resources are also crucial for a company's performance and competitiveness. The company needs to maintain its resources in good condition to ensure their reliability and longevity. It also needs to invest in the development and improvement of its resources to enhance their value and competitive advantage.

For example, a technology company needs to maintain its IT systems to ensure their reliability and security. It also needs to invest in the development and improvement of its software and technologies to stay ahead of its competitors.

In conclusion, key resources are a crucial component of the business model canvas. They are the strategic assets that a company uses to create and deliver its value proposition. Understanding and managing these resources effectively can enhance a company's performance, competitiveness, and ability to innovate.

Whether they are physical, intellectual, human, or financial, these resources play a crucial role in the value creation process, revenue growth, and innovation. Therefore, identifying and managing these resources should be a top priority for any business.

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Business Model Canvas: Explained with Examples

Got a new business idea, but don’t know how to put it to work? Want to improve your existing business model? Overwhelmed by writing your business plan? There is a one-page technique that can provide you the solution you are looking for, and that’s the business model canvas.

In this guide, you’ll have the Business Model Canvas explained, along with steps on how to create one. All business model canvas examples in the post can be edited online.

What is a Business Model Canvas

A business model is simply a plan describing how a business intends to make money. It explains who your customer base is and how you deliver value to them and the related details of financing. And the business model canvas lets you define these different components on a single page.   

The Business Model Canvas is a strategic management tool that lets you visualize and assess your business idea or concept. It’s a one-page document containing nine boxes that represent different fundamental elements of a business.  

The business model canvas beats the traditional business plan that spans across several pages, by offering a much easier way to understand the different core elements of a business.

The right side of the canvas focuses on the customer or the market (external factors that are not under your control) while the left side of the canvas focuses on the business (internal factors that are mostly under your control). In the middle, you get the value propositions that represent the exchange of value between your business and your customers.

The business model canvas was originally developed by Alex Osterwalder and Yves Pigneur and introduced in their book ‘ Business Model Generation ’ as a visual framework for planning, developing and testing the business model(s) of an organization.

What Are the Benefits of Using a Business Model Canvas

Why do you need a business model canvas? The answer is simple. The business model canvas offers several benefits for businesses and entrepreneurs. It is a valuable tool and provides a visual and structured approach to designing, analyzing, optimizing, and communicating your business model.

• The business model canvas provides a comprehensive overview of a business model’s essential aspects. The BMC provides a quick outline of the business model and is devoid of unnecessary details compared to the traditional business plan.
• The comprehensive overview also ensures that the team considers all required components of their business model and can identify gaps or areas for improvement.
• The BMC allows the team to have a holistic and shared understanding of the business model while enabling them to align and collaborate effectively.
• The visual nature of the business model canvas makes it easier to refer to and understand by anyone. The business model canvas combines all vital business model elements in a single, easy-to-understand canvas.
• The BMC can be considered a strategic analysis tool as it enables you to examine a business model’s strengths, weaknesses, opportunities, and challenges.
• It’s easier to edit and can be easily shared with employees and stakeholders.
• The BMC is a flexible and adaptable tool that can be updated and revised as the business evolves. Keep your business agile and responsive to market changes and customer needs.
• The business model canvas can be used by large corporations and startups with just a few employees.
• The business model canvas effectively facilitates discussions among team members, investors, partners, customers, and other stakeholders. It clarifies how different aspects of the business are related and ensures a shared understanding of the business model.
• You can use a BMC template to facilitate discussions and guide brainstorming brainstorming sessions to generate insights and ideas to refine the business model and make strategic decisions.
• The BMC is action-oriented, encouraging businesses to identify activities and initiatives to improve their business model to drive business growth.
• A business model canvas provides a structured approach for businesses to explore possibilities and experiment with new ideas. This encourages creativity and innovation, which in turn encourages team members to think outside the box.

How to Make a Business Model Canvas

Here’s a step-by-step guide on how to create a business canvas model.

Step 1: Gather your team and the required material Bring a team or a group of people from your company together to collaborate. It is better to bring in a diverse group to cover all aspects.

While you can create a business model canvas with whiteboards, sticky notes, and markers, using an online platform like Creately will ensure that your work can be accessed from anywhere, anytime. Create a workspace in Creately and provide editing/reviewing permission to start.

Step 2: Set the context Clearly define the purpose and the scope of what you want to map out and visualize in the business model canvas. Narrow down the business or idea you want to analyze with the team and its context.

Step 3: Draw the canvas Divide the workspace into nine equal sections to represent the nine building blocks of the business model canvas.

Step 4: Identify the key building blocks Label each section as customer segment, value proposition, channels, customer relationships, revenue streams, key resources, key activities, and cost structure.

Step 5: Fill in the canvas Work with your team to fill in each section of the canvas with relevant information. You can use data, keywords, diagrams, and more to represent ideas and concepts.

Step 6: Analyze and iterate Once your team has filled in the business model canvas, analyze the relationships to identify strengths, weaknesses, opportunities, and challenges. Discuss improvements and make adjustments as necessary.

Step 7: Finalize Finalize and use the model as a visual reference to communicate and align your business model with stakeholders. You can also use the model to make informed and strategic decisions and guide your business.

What are the Key Building Blocks of the Business Model Canvas?

There are nine building blocks in the business model canvas and they are:

Customer Segments

Customer relationships, revenue streams, key activities, key resources, key partners, cost structure.

• Value Proposition

When filling out a Business Model Canvas, you will brainstorm and conduct research on each of these elements. The data you collect can be placed in each relevant section of the canvas. So have a business model canvas ready when you start the exercise.  

Let’s look into what the 9 components of the BMC are in more detail.

These are the groups of people or companies that you are trying to target and sell your product or service to.

Segmenting your customers based on similarities such as geographical area, gender, age, behaviors, interests, etc. gives you the opportunity to better serve their needs, specifically by customizing the solution you are providing them.

After a thorough analysis of your customer segments, you can determine who you should serve and ignore. Then create customer personas for each of the selected customer segments.

There are different customer segments a business model can target and they are;

• Mass market: A business model that focuses on mass markets doesn’t group its customers into segments. Instead, it focuses on the general population or a large group of people with similar needs. For example, a product like a phone.  
• Niche market: Here the focus is centered on a specific group of people with unique needs and traits. Here the value propositions, distribution channels, and customer relationships should be customized to meet their specific requirements. An example would be buyers of sports shoes.
• Segmented: Based on slightly different needs, there could be different groups within the main customer segment. Accordingly, you can create different value propositions, distribution channels, etc. to meet the different needs of these segments.
• Diversified: A diversified market segment includes customers with very different needs.
• Multi-sided markets: this includes interdependent customer segments. For example, a credit card company caters to both their credit card holders as well as merchants who accept those cards.

Use STP Model templates for segmenting your market and developing ideal marketing campaigns

Visualize, assess, and update your business model. Collaborate on brainstorming with your team on your next business model innovation.

In this section, you need to establish the type of relationship you will have with each of your customer segments or how you will interact with them throughout their journey with your company.

There are several types of customer relationships

• Personal assistance: you interact with the customer in person or by email, through phone call or other means.
• Dedicated personal assistance: you assign a dedicated customer representative to an individual customer.  
• Self-service: here you maintain no relationship with the customer, but provides what the customer needs to help themselves.
• Automated services: this includes automated processes or machinery that helps customers perform services themselves.
• Communities: these include online communities where customers can help each other solve their own problems with regard to the product or service.
• Co-creation: here the company allows the customer to get involved in the designing or development of the product. For example, YouTube has given its users the opportunity to create content for its audience.

You can understand the kind of relationship your customer has with your company through a customer journey map . It will help you identify the different stages your customers go through when interacting with your company. And it will help you make sense of how to acquire, retain and grow your customers.

This block is to describe how your company will communicate with and reach out to your customers. Channels are the touchpoints that let your customers connect with your company.

Channels play a role in raising awareness of your product or service among customers and delivering your value propositions to them. Channels can also be used to allow customers the avenue to buy products or services and offer post-purchase support.

There are two types of channels

• Owned channels: company website, social media sites, in-house sales, etc.
• Partner channels: partner-owned websites, wholesale distribution, retail, etc.

Revenues streams are the sources from which a company generates money by selling their product or service to the customers. And in this block, you should describe how you will earn revenue from your value propositions.  

A revenue stream can belong to one of the following revenue models,

• Transaction-based revenue: made from customers who make a one-time payment
• Recurring revenue: made from ongoing payments for continuing services or post-sale services

There are several ways you can generate revenue from

• Asset sales: by selling the rights of ownership for a product to a buyer
• Usage fee: by charging the customer for the use of its product or service
• Subscription fee: by charging the customer for using its product regularly and consistently
• Lending/ leasing/ renting: the customer pays to get exclusive rights to use an asset for a fixed period of time
• Licensing: customer pays to get permission to use the company’s intellectual property
• Brokerage fees: revenue generated by acting as an intermediary between two or more parties
• Advertising: by charging the customer to advertise a product, service or brand using company platforms

What are the activities/ tasks that need to be completed to fulfill your business purpose? In this section, you should list down all the key activities you need to do to make your business model work.

These key activities should focus on fulfilling its value proposition, reaching customer segments and maintaining customer relationships, and generating revenue.

There are 3 categories of key activities;

• Production: designing, manufacturing and delivering a product in significant quantities and/ or of superior quality.
• Problem-solving: finding new solutions to individual problems faced by customers.
• Platform/ network: Creating and maintaining platforms. For example, Microsoft provides a reliable operating system to support third-party software products.

This is where you list down which key resources or the main inputs you need to carry out your key activities in order to create your value proposition.

There are several types of key resources and they are

• Human (employees)
• Financial (cash, lines of credit, etc.)
• Intellectual (brand, patents, IP, copyright)
• Physical (equipment, inventory, buildings)

Key partners are the external companies or suppliers that will help you carry out your key activities. These partnerships are forged in oder to reduce risks and acquire resources.

Types of partnerships are

• Strategic alliance: partnership between non-competitors
• Coopetition: strategic partnership between partners
• Joint ventures: partners developing a new business
• Buyer-supplier relationships: ensure reliable supplies

In this block, you identify all the costs associated with operating your business model.

You’ll need to focus on evaluating the cost of creating and delivering your value propositions, creating revenue streams, and maintaining customer relationships. And this will be easier to do so once you have defined your key resources, activities, and partners.  

Businesses can either be cost-driven (focuses on minimizing costs whenever possible) and value-driven (focuses on providing maximum value to the customer).

Value Propositions

This is the building block that is at the heart of the business model canvas. And it represents your unique solution (product or service) for a problem faced by a customer segment, or that creates value for the customer segment.

A value proposition should be unique or should be different from that of your competitors. If you are offering a new product, it should be innovative and disruptive. And if you are offering a product that already exists in the market, it should stand out with new features and attributes.

Value propositions can be either quantitative (price and speed of service) or qualitative (customer experience or design).

What to Avoid When Creating a Business Model Canvas

One thing to remember when creating a business model canvas is that it is a concise and focused document. It is designed to capture key elements of a business model and, as such, should not include detailed information. Some of the items to avoid include,

• Detailed financial projections such as revenue forecasts, cost breakdowns, and financial ratios. Revenue streams and cost structure should be represented at a high level, providing an overview rather than detailed projections.
• Detailed operational processes such as standard operating procedures of a business. The BMC focuses on the strategic and conceptual aspects.
• Comprehensive marketing or sales strategies. The business model canvas does not provide space for comprehensive marketing or sales strategies. These should be included in marketing or sales plans, which allow you to expand into more details.
• Legal or regulatory details such as intellectual property, licensing agreements, or compliance requirements. As these require more detailed and specialized attention, they are better suited to be addressed in separate legal or regulatory documents.
• Long-term strategic goals or vision statements. While the canvas helps to align the business model with the overall strategy, it should focus on the immediate and tangible aspects.
• Irrelevant or unnecessary information that does not directly relate to the business model. Including extra or unnecessary information can clutter the BMC and make it less effective in communicating the core elements.

What Are Your Thoughts on the Business Model Canvas?

Once you have completed your business model canvas, you can share it with your organization and stakeholders and get their feedback as well. The business model canvas is a living document, therefore after completing it you need to revisit and ensure that it is relevant, updated and accurate.

What best practices do you follow when creating a business model canvas? Do share your tips with us in the comments section below.

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FAQs About the Business Model Canvas

• Use clear and concise language
• Use visual-aids
• Customize for your audience
• Highlight key insights
• Be open to feedback and discussion

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Amanda Athuraliya is the communication specialist/content writer at Creately, online diagramming and collaboration tool. She is an avid reader, a budding writer and a passionate researcher who loves to write about all kinds of topics.

Key Resources In The Business Model Canvas: What To Include?

One of the more important (though at times trickier to define) sections of the business model canvas is the key resources section. Particularly for small and early stage ventures--there can be some confusion about what to include here.

So let's just get right to it.

What are key resources in the business model canvas?

In a nutshell, your key resources are those assets which are absolutely essential for your business model to work.

They describe all the valuable things that will be needed for you to actually deliver on the promise (or value proposition) you're making to your target customers.

For example, if you're selling items online, then a website, hosting and Ecommerce infrastructure are kind of essential resources for that model to be at all feasible!

In contrast, if you're running a B2B service company that does consulting work for other businesses, your key resources might be your team of expert consultants, and perhaps some specialized software or equipment.

Useful prompts for your key resources section

• What do you need in order to bring your value proposition to life?
• What are the necessary inputs for your business model?
• What assets or capabilities do you need to have in order to make your business model work?

Tying your key resources back to the core value proposition your business is making can be a useful way to check off your most important assets. Especially if you are projecting forward to some future value proposition, or considering a venture which doesn't quite exist yet--start by imagining a future where you are delivering on your value proposition perfectly, then picture the assets that would need to be in place to do so effectively.

Common types of key resources

Key resources come in a few common forms, and it's worth taking a moment to consider each of these larger categories when brainstorming your own business' key resources.

These are, according to Strategyzer :

Physical resources

Intellectual property.

• Bonus: Digital

A little more on each below.

Physical resources refer to assets like infrastructure, equipment, real estate, delivery vehicles, inventory and basically any assets that are grounded in the physical world; ie. made up of atoms,

For example, a coffee shop needs a location, brewing equipment, and (of course) coffee beans! Other examples of physical resources might be:

• A retail store needs shelves, registers and products;
• A food delivery like Deliveroo business needs vehicles (in this case bicycles!), uniforms and packaging materials; and
• A manufacturing business likely needs a factory, tools and raw materials.

In an increasingly online business world, intellectual property resources are incredibly valuable. This includes things like any patents, copyrights or other legal protections that you might have on your products or processes. But it also refers to your brand, proprietary software and systems and even data warehouses that you may have collected through business activities.

Human resources

Your human resources are, quite simply, your people power. This could be a team of in-house experts, your contractors, or even just yourself if you're a solopreneur. Understanding the role that human resources and talent will play in your broader business model is a key piece of the canvas; are you dependent on highly skilled talent (e.g. niche software developers?) or are you more dependent on a high volume of low-skilled workers (e.g. Deliveroo delivery drivers).

Financial resources

This could include investments, grants, lines of credit, or even just cash on hand. Other common financial resources are invoices (if you're selling on credit) or accounts receivable (if you're selling products or services before they've been paid for).

Some business models have higher capital demands than others, in which case being clear about the financial resources needed up front (and throughout) are essential--you can have all the other forecasts and projections going in the right direction, but if you run out of cash, everything will end in a hurry.

Digital resources

Not included in the original model, I've added this as a specific consideration for modern online businesses. While there's some overlap with the Intellectual Property resources, I think it's worth making a point of considering your digital resources that will be deployed (and secured) as your business model develops.

Things like:

• SEO and digital real estate: How much of the digital search space do you own? And how much can you realistically win?
• Virality: Do you have assets which are inherently viral, or access to channels which can go viral readily?
• Automation: If manufacturing facilities and systems are a key resources in physical space, thinking through areas of your business' digital knowledge processes that can be automated (and building or developing those systems) can also be considered a key digital resource in your business model.

Filling out the Business Model Canvas

We'll be adding to this series on filling out the Business Model Canvas in due course; in the meanwhile, if you'd like to duplicate an editable template of the business model canvas in Notion, you can do just that with the link above.

Happy business building.

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Key Resources in a Business Model Canvas

The process of business model creation and evaluation has become much easier recently, thanks to the appearance of various appliances like Business Model Canvas. It provides a framework for identifying and organizing the key elements of a business and how they fit together to create value.

Key resources are considered to be one of the crucial parts of any business model.

Today, let’s discuss in more detail how key resources are linked to the Business Model Canvas and define how they can influence the development of your business and contribute to its success.

What are Key Resources?

Physical resources, human resources, intellectual property, financial resources, network resources, defining your key resources, using key resources in business model canvas.

Key resources are the assets and credits that most businesses rely on when devising, delivering, and conveying value. Based on the aspect of work they influence, these resources can be grouped into different classes, like human resources, financial, physical, etc.

Key resources can also be categorized as tangible or intangible:

• Tangible resources are physical assets such as machinery, equipment, buildings, and inventory;
• The second type is more about something that is not materialistic, such as intellectual property, patents, trademarks, and customer data.

These resources are critical to a business model because they enable a company to perform key activities, create value for customers, and generate revenue. Without them, it would be practically impossible for a company to operate effectively and achieve its goals.

Identifying key resources requires a thorough understanding of a company’s business model, industry, and competitive landscape. In order to do that, a company has to determine its key activities. Only after doing that they can figure out which resources they need to perform these activities effectively.

For example, some of the assets that are essential for producing their goods are various raw materials, production equipment, and professional workers. For a software company, it would be necessary to gain access to the following:

• Specialized software development tools;
• A talented team of software engineers;
• Intellectual property such as patents and trademarks.

By using various Business Model Canvas, you can create a structured scheme identifying and organizing key resources. The canvas is composed of nine elements. Some of the main ones are key activities, customer segments, value propositions, and key partnerships.

In the lower-left quadrant of the canvas, you’ll find key resources side-by-side with key activities and key partners. This quadrant is the representation of all the resources and capabilities needed to create value for customers.

What are the Main Kinds of Key Resources?

Any business requires a number of key resources to operate effectively. So, now we want to present you with a list of some of the most common ones and describe their features.

Physical key resources are one of the crucial elements of any business model. First of all, they include substantial assets like various appliances, tools, and inventory. Plus, any company needs a building – a place where they organize their production and deliver their services to the customers.

We already mentioned that the usage of this type of resource is vital for manufacturing or transportation industries.

Physical key resources are also essential for companies involved in construction, mining, and agriculture , as most of their working processes require the usage of specialized tools and machinery. Additionally, they are crucial for businesses in the retail industry , where inventory, store layout, and displays act as an attraction for customers.

Physical assets are not limited to production or service delivery activities. Things like working spaces, furniture, utilities, and technological devices make it possible for any company to effectively perform its administrative functions as well.

For example, a financial services company requires access to high-speed Internet, computer systems, and a comfortable spot for work to conduct its operations and serve its customers.

No business can become outstanding without human key resources . You can call them a backbone in a way. They refer to the people who work for a company, including employees, contractors, and partners, and play a vital role in driving growth, innovation, and success.

Human resources are critical for companies involved in service industries such as:

• Healthcare;
• Consulting.

If a company wants to succeed in these industries and provide services of the highest quality to meet the needs and expectations of their customers, they need to hire workers that are professional, educated, skilled, and qualified.

For example, a healthcare company requires highly skilled personnel that are experts in their field in order to guarantee excellent patient care. Similarly, an education company requires talented teachers and professors to engage their students and make the learning processes effective.

Human assets are also really important for companies that provide their services for technology-based industries , like IT services, design, content creation, etc.

These companies require a proficient and talented team of software engineers, designers, and scientists to come up with fresh ideas and be the driving force of innovation in various fields.

Human key resources are not only about technical skills and knowledge. Creativity, leadership, and teamwork are some other essential features that are extremely valuable for any business.

These qualities are crucial for driving innovation, collaboration, and productivity and are a necessity for businesses looking to stay ahead of the competition.

For any business owner, one of the top priorities is the effective management of human resources. It involves the following:

• Identifying and attracting top talent;
• Providing opportunities for professional growth and development;
• Creating an environment that will motivate your employees and lead to a boost of creativity, innovation, and productivity.

Intellectual property (IP) is a valuable resource for businesses of all sizes and industries. It refers to the legal rights that protect all the unique products created by someone, like literary and artistic works, symbols, names, and designs.

Some of the forms of IP you might be familiar with are patents, trademarks, copyrights, trade secrets, and industrial designs. The main purpose of all these protection forms is to give companies the possibility to ensure their unique ideas and creations are preserved.

They prevent others from using them without permission or compensation.

For example, a software development company may hold a patent for a unique software algorithm or a trademark for its brand name. Similarly, a fashion company may hold copyrights for its clothing designs or a trademark for its logo.

• For any business that wants to remain competitive and relevant in the market and ensure the safety of their unique products and possessions, IP is a must;
• It gives businesses an opportunity to demonstrate their unique color, manner, and style and find customers that’ll resonate with it. It makes it possible to establish your differences;
• Moreover, IP can also serve as a valuable asset that businesses can monetize through licensing agreements, joint ventures, or other business arrangements. This can provide a valuable source of revenue for businesses and help them generate new income streams.

If businesses want to significantly increase the value of their intellectual assets , effective management of IP is not an option but a necessity. It involves identifying and protecting valuable IP assets, monitoring and enforcing IP rights, and developing strategies for leveraging IP for business growth and success.

Financial key resources are the lifeblood of any business. They refer to the financial assets that a company possesses, including cash, investments, credit lines, and other financial instruments.

No business can develop and reach success in this competitive and fast-moving world without a strong financial base. What are their main features?

• They provide the necessary capital for the expansion. Businesses can invest in the development of their employees and the creation of new products and services. It allows them to succeed in various marketplaces;
• Moreover, financial resources are also crucial for businesses looking to manage their cash flow and maintain financial stability . They enable companies to pay their bills on time, manage their debt obligations, and respond to unexpected financial challenges.

Business owners should pay more attention to the management of financial resources , as it’ll help maximize their financial performance and success.

This involves developing and implementing effective financial strategies, managing cash flow, and monitoring key financial metrics such as revenue, profit margins, and return on investment.

Financial key resources are also critical for businesses looking to attract investors and secure funding for growth and expansion. Investors and lenders typically look for companies with strong financial fundamentals and a track record of financial success.

Therefore, businesses must demonstrate a clear understanding of their financial position and the resources needed to achieve their growth objectives.

In every business ecosystem, the orchestration of financial services stands as a cornerstone of success. The meticulous calibration of digital infrastructures is indispensable.

By enlisting the expertise of adept developers, businesses can significantly bolster their financial operations. This move not only enriches the technological prowess of a company but also amplifies its market stature through enhanced financial strategies and services, thereby achieving unparalleled operational excellence.

Our last but definitely not least point is network key resources . Today, the market is really globalized, and all industries are connected in some way with each other. So, creating a strong functioning network is essential if you want your business to succeed.

These resources are based on the connections and relationships that a business has with its suppliers, customers, partners, and other stakeholders in the industry.

There’s a variety of benefits effective network resources can provide any business. Some of the main points are:

• Increased access to new markets;
• Opportunities for collaboration and innovation;
• Access to new technologies and resources.

For example, a business that has a strong network of suppliers and distributors can quickly and easily source materials and products, reduce costs, and deliver high-quality products and services to customers.

Similarly, a business that has a strong network of partners and collaborators can tap into new sources of expertise, ideas, and innovation and develop new products and services that meet the evolving needs of customers.

Moreover, network resources can also provide businesses with a valuable source of information and insights into industry trends, customer preferences, and competitive dynamics.

Defining key resources for a business involves identifying the critical assets and capabilities that the business needs to operate, compete, and succeed. Here are some steps to help define your key resources:

• Identify your business model. First, identify your business model and the key activities that are needed to make it work. That way you’ll be able to figure out which resources you’ll need in order to reach all your objectives;
• Identify critical resources . Next, identify the critical resources that are necessary for the successful performance of your business. This might include physical assets like various tools and space for work, financial resources like capital and financing, human resources like expertise employees, and intellectual resources like patents and trademarks;
• Prioritize resources. Assess your resources and outline the ones that are the most important for the development of your business. This will help you designate your resources more effectively and efficiently;
• Assess strengths and weaknesses. Define the weak and strong points you currently have. By doing that, you can outline where you need to invest more resources or adjust your strategy;
• Plan for contingencies . Unexpected situations and various emergencies are practically unavoidable, so it’s essential to create a backup plan. An alternative strategy and action plan will decrease the risk of failing.

No Business Model Canvas (BMC) can function properly without key resources. This strategic tool allows companies to create, develop, and effectively operate their business models. In the BMC, key resources are the assets and capabilities that give businesses an opportunity to comfortably organize their work in all aspects and increase their productivity.

You can create your models yourself or you can use other companies for an advertisement:

• Start by determining the key resources that are essential for your business to function;
• Group them according to their type and importance;
• Ensure that they are aligned with your value proposition.

This will help you create and deliver value to your customers effectively.

To avoid any mishaps and emergencies, or at least to make their impact not as strong, think about some other strategies you might use in case the original one doesn’t work out.

Defining your key resources is an important first step in developing a successful business strategy. There are a few steps you need to take in order to achieve that:

• Identify your business objectives, short-term and long-term goals, and key performance indicators;
• Conduct a comprehensive audit of your business resources. This should include an inventory of your physical, human, and intellectual resources;
• Determine which ones are crucial for the success of your business;
• Prioritize them based on their importance and value to your business;
• Finally, develop a resource management plan that outlines how you’ll manage and optimize your key resources.

In order to make this process simpler and more organized, you can operate some of the newest tools, like Business Model Canvas.

Profitable Business Models > Business Model Canvas

The Business Model Canvas Explained: Key Resources

• by  Joanne Moyo
• January 20, 2022

On the Business Model Canvas, the Key Resources segment refers to the supplies, assets, and materials required to deliver your value proposition to your customer segment. So, for instance, if you own a coffee shop, then coffee beans will obviously be an essential resource. However, you’ll need to look at your key resources in respect of the whole business model canvas.

Your key resources cannot be viewed from one angle. So a key question is: “what resources do you need to support other segments of your business model canvas?”

What are Key Resources?

So what is the definition of key resources? Key resources refer to the necessary products and services that increase your value proposition.    Essential key resources are crucial to the success of your business, without them your value proposition is compromised. Key Resources can be physical, financial, intellectual, human, and relational. It all depends on your business model.

The management of key resources is in-house, meaning it’s up to you to determine the resources necessary for your business to run. If you are working with a shipping partner who ships your products for you, some key resources for your business would be the technology, warehouses, and employees needed to ensure that operations go smoothly between your company and the Key Partner.

For example, during Netflix’s early years, one of its key partners was the United States Postal Service (USPS) who shipped DVDs via mail to customers. Some key resources for them were the technology needed to process all the DVD orders and update the inventory system and the employees at the logistic centers. When the DVDs were returned, they sorted and scanned the UPC barcodes on the special Netflix envelopes. Additionally, employees had to inspect the returned DVDs to ensure they weren’t broken or too damaged to play.   

Key resources can also evolve as the company grows and expands. Looking back at Netflix, in the early days, the company’s key resources were their DVD collection and cost-effective mail-order system. Today, Netflix’s key resource is undoubtedly the original content they produce. And the rights to stream online video content from the deals they brokered with some of the biggest production studios.

Types of Key Resources 

One way to think about the resources and assets your business depends on is to split them into four broad types.

• Physical resources

Physical resources are tangible assets used to create a value proposition. Examples of physical resources include inventory, equipment, point-of-sale systems, computers, machines, buildings, distribution networks, and manufacturing plants. All these enable your business to function.

An essential resource for Amazon, for example, is its fulfillment centers (warehouses), where they sort, pack, and ship orders. Without adequate infrastructure, Amazon would fail to keep up with the demands and needs of their customers.

What happens if inventory is not delivered on time? What happens to your business operations? 

You will need to make a comprehensive list of the physical resources you need for your business. This can help you plan for future emergencies, such as finding alternate equipment sources or gathering the names of repair companies. You must be aware of the physical dependencies of your company and its most vital components.

•  Intellectual resources

Most companies depend on specialized knowledge to maintain competition with other businesses. This type of knowledge can take many different forms: software algorithms, product manufacturing, intangible resources like your brand, intellectual property, partnerships, customer lists, and even product designs are valuable resources to factor into your Business Model Canvas.

Intellectual resources take some time and money to develop; such extensive measures should be taken to ensure that you own the rights to these intellectual resources. Filing for copyrights, trademarks, and patents is one way to do this.

Nike, for example, is heavily dependent on its brand to sell their products to a customer segment that is devoted to the brand. Similarly, Microsoft relies on software that has been tweaked and perfected over years of trial and error. Other businesses like Google have substantial intellectual resources such as softwares, patents, and trademarks and view these resources as a significant driver of business growth.

For example, the number of patents filed by Google between 2011 and 2012 grew by 170%. Apple’s patents grew by 68% in the same period.

•  Human resources

No matter what your business model looks like,  people will always be one of the most essential foundational resources. However, they are easily the most overlooked assets. Companies in the service industries specifically require a lot of human resources such as customer service representatives, software engineers, etc.

Uber, for example, is heavily dependent on the network of drivers that join the platform as employees. Another example is Amazon. Amazon truck drivers are essential human resources and combined with the trucks (physical resources), they deliver goods to Amazon customers.  

All you need to do for this section of the BMC is identify your ‘human resources’ and then figure out how to retain them and continue enabling their skills.

We may have a lot of automation nowadays. However, human capital is still the number one driving force for any business. Individuals trained in specific skills or those with market-related experience are crucial key resources.

•  Financial resources

Money is another crucial essential resource, and it includes things like cash and lines of credit. In fact, one of the primary reasons why some businesses fail is running out of money. Most start-ups fail because they are not making enough revenue (via revenue streams or funding) to sustain and grow their business.

Your business will need access to physical cash, a line of credit, or even a loan at support. Additionally, a sufficient flow of money is required to care for business obligations such as paying employees, rent, utilities, etc.

How to Define Your Key Resources

To identify the things your business can not operate without. A good exercise would be to think about your entire business model and determine the most crucial things required during a typical day of operation.

The following are some questions you can ask yourself:

• What tools do you need to produce your product or service?
• What are tangible and intangible assets required to market it to your customer segments?
• Would it increase your value proposition if you add this as a key resource?
• Would it decrease or compromise your value proposition if you remove this from a list of key resources?
• Does this resource give you an edge over the competition?
• What assets would enable you to attract more customers?
• What assets would make running a business much easier?
• What kind of trampolines you need in order to scale up your business?

All businesses face challenges regardless of how prepared they are. Understanding the resources your company needs for daily operations is crucial in insulating it from unforeseen obstacles.

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12 Key Elements of a Business Plan (Top Components Explained)

Starting and running a successful business requires proper planning and execution of effective business tactics and strategies .

You need to prepare many essential business documents when starting a business for maximum success; the business plan is one such document.

When creating a business, you want to achieve business objectives and financial goals like productivity, profitability, and business growth. You need an effective business plan to help you get to your desired business destination.

Even if you are already running a business, the proper understanding and review of the key elements of a business plan help you navigate potential crises and obstacles.

This article will teach you why the business document is at the core of any successful business and its key elements you can not avoid.

Let’s get started.

Why Are Business Plans Important?

Business plans are practical steps or guidelines that usually outline what companies need to do to reach their goals. They are essential documents for any business wanting to grow and thrive in a highly-competitive business environment .

1. Proves Your Business Viability

A business plan gives companies an idea of how viable they are and what actions they need to take to grow and reach their financial targets. With a well-written and clearly defined business plan, your business is better positioned to meet its goals.

2. Guides You Throughout the Business Cycle

A business plan is not just important at the start of a business. As a business owner, you must draw up a business plan to remain relevant throughout the business cycle .

During the starting phase of your business, a business plan helps bring your ideas into reality. A solid business plan can secure funding from lenders and investors.

After successfully setting up your business, the next phase is management. Your business plan still has a role to play in this phase, as it assists in communicating your business vision to employees and external partners.

Essentially, your business plan needs to be flexible enough to adapt to changes in the needs of your business.

3. Helps You Make Better Business Decisions

As a business owner, you are involved in an endless decision-making cycle. Your business plan helps you find answers to your most crucial business decisions.

A robust business plan helps you settle your major business components before you launch your product, such as your marketing and sales strategy and competitive advantage.

4. Eliminates Big Mistakes

Many small businesses fail within their first five years for several reasons: lack of financing, stiff competition, low market need, inadequate teams, and inefficient pricing strategy.

Creating an effective plan helps you eliminate these big mistakes that lead to businesses' decline. Every business plan element is crucial for helping you avoid potential mistakes before they happen.

5. Secures Financing and Attracts Top Talents

Having an effective plan increases your chances of securing business loans. One of the essential requirements many lenders ask for to grant your loan request is your business plan.

A business plan helps investors feel confident that your business can attract a significant return on investments ( ROI ).

You can attract and retain top-quality talents with a clear business plan. It inspires your employees and keeps them aligned to achieve your strategic business goals.

Key Elements of Business Plan

Starting and running a successful business requires well-laid actions and supporting documents that better position a company to achieve its business goals and maximize success.

A business plan is a written document with relevant information detailing business objectives and how it intends to achieve its goals.

With an effective business plan, investors, lenders, and potential partners understand your organizational structure and goals, usually around profitability, productivity, and growth.

Every successful business plan is made up of key components that help solidify the efficacy of the business plan in delivering on what it was created to do.

Here are some of the components of an effective business plan.

1. Executive Summary

One of the key elements of a business plan is the executive summary. Write the executive summary as part of the concluding topics in the business plan. Creating an executive summary with all the facts and information available is easier.

In the overall business plan document, the executive summary should be at the forefront of the business plan. It helps set the tone for readers on what to expect from the business plan.

A well-written executive summary includes all vital information about the organization's operations, making it easy for a reader to understand.

The key points that need to be acted upon are highlighted in the executive summary. They should be well spelled out to make decisions easy for the management team.

A good and compelling executive summary points out a company's mission statement and a brief description of its products and services.

An executive summary summarizes a business's expected value proposition to distinct customer segments. It highlights the other key elements to be discussed during the rest of the business plan.

Including your prior experiences as an entrepreneur is a good idea in drawing up an executive summary for your business. A brief but detailed explanation of why you decided to start the business in the first place is essential.

Adding your company's mission statement in your executive summary cannot be overemphasized. It creates a culture that defines how employees and all individuals associated with your company abide when carrying out its related processes and operations.

Your executive summary should be brief and detailed to catch readers' attention and encourage them to learn more about your company.

Components of an Executive Summary

Here are some of the information that makes up an executive summary:

• The name and location of your company
• Products and services offered by your company
• Mission and vision statements
• Success factors of your business plan

2. Business Description

Your business description needs to be exciting and captivating as it is the formal introduction a reader gets about your company.

What your company aims to provide, its products and services, goals and objectives, target audience , and potential customers it plans to serve need to be highlighted in your business description.

A company description helps point out notable qualities that make your company stand out from other businesses in the industry. It details its unique strengths and the competitive advantages that give it an edge to succeed over its direct and indirect competitors.

Spell out how your business aims to deliver on the particular needs and wants of identified customers in your company description, as well as the particular industry and target market of the particular focus of the company.

Include trends and significant competitors within your particular industry in your company description. Your business description should contain what sets your company apart from other businesses and provides it with the needed competitive advantage.

In essence, if there is any area in your business plan where you need to brag about your business, your company description provides that unique opportunity as readers look to get a high-level overview.

Components of a Business Description

Your business description needs to contain these categories of information.

• Business location
• The legal structure of your business
• Summary of your business’s short and long-term goals

3. Market Analysis

The market analysis section should be solely based on analytical research as it details trends particular to the market you want to penetrate.

Graphs, spreadsheets, and histograms are handy data and statistical tools you need to utilize in your market analysis. They make it easy to understand the relationship between your current ideas and the future goals you have for the business.

All details about the target customers you plan to sell products or services should be in the market analysis section. It helps readers with a helpful overview of the market.

In your market analysis, you provide the needed data and statistics about industry and market share, the identified strengths in your company description, and compare them against other businesses in the same industry.

The market analysis section aims to define your target audience and estimate how your product or service would fare with these identified audiences.

Market analysis helps visualize a target market by researching and identifying the primary target audience of your company and detailing steps and plans based on your audience location.

Obtaining this information through market research is essential as it helps shape how your business achieves its short-term and long-term goals.

Market Analysis Factors

Here are some of the factors to be included in your market analysis.

• The geographical location of your target market
• Needs of your target market and how your products and services can meet those needs
• Demographics of your target audience

Components of the Market Analysis Section

Here is some of the information to be included in your market analysis.

• Industry description and statistics
• Demographics and profile of target customers
• Marketing data for your products and services
• Detailed evaluation of your competitors

4. Marketing Plan

A marketing plan defines how your business aims to reach its target customers, generate sales leads, and, ultimately, make sales.

Promotion is at the center of any successful marketing plan. It is a series of steps to pitch a product or service to a larger audience to generate engagement. Note that the marketing strategy for a business should not be stagnant and must evolve depending on its outcome.

Include the budgetary requirement for successfully implementing your marketing plan in this section to make it easy for readers to measure your marketing plan's impact in terms of numbers.

The information to include in your marketing plan includes marketing and promotion strategies, pricing plans and strategies , and sales proposals. You need to include how you intend to get customers to return and make repeat purchases in your business plan.

5. Sales Strategy

Sales strategy defines how you intend to get your product or service to your target customers and works hand in hand with your business marketing strategy.

Your sales strategy approach should not be complex. Break it down into simple and understandable steps to promote your product or service to target customers.

Apart from the steps to promote your product or service, define the budget you need to implement your sales strategies and the number of sales reps needed to help the business assist in direct sales.

Your sales strategy should be specific on what you need and how you intend to deliver on your sales targets, where numbers are reflected to make it easier for readers to understand and relate better.

6. Competitive Analysis

Providing transparent and honest information, even with direct and indirect competitors, defines a good business plan. Provide the reader with a clear picture of your rank against major competitors.

Identifying your competitors' weaknesses and strengths is useful in drawing up a market analysis. It is one information investors look out for when assessing business plans.

The competitive analysis section clearly defines the notable differences between your company and your competitors as measured against their strengths and weaknesses.

This section should define the following:

• Your competitors' identified advantages in the market
• How do you plan to set up your company to challenge your competitors’ advantage and gain grounds from them?
• The standout qualities that distinguish you from other companies
• Potential bottlenecks you have identified that have plagued competitors in the same industry and how you intend to overcome these bottlenecks

In your business plan, you need to prove your industry knowledge to anyone who reads your business plan. The competitive analysis section is designed for that purpose.

7. Management and Organization

Management and organization are key components of a business plan. They define its structure and how it is positioned to run.

Whether you intend to run a sole proprietorship, general or limited partnership, or corporation, the legal structure of your business needs to be clearly defined in your business plan.

Use an organizational chart that illustrates the hierarchy of operations of your company and spells out separate departments and their roles and functions in this business plan section.

The management and organization section includes profiles of advisors, board of directors, and executive team members and their roles and responsibilities in guaranteeing the company's success.

Apparent factors that influence your company's corporate culture, such as human resources requirements and legal structure, should be well defined in the management and organization section.

Defining the business's chain of command if you are not a sole proprietor is necessary. It leaves room for little or no confusion about who is in charge or responsible during business operations.

This section provides relevant information on how the management team intends to help employees maximize their strengths and address their identified weaknesses to help all quarters improve for the business's success.

8. Products and Services

This business plan section describes what a company has to offer regarding products and services to the maximum benefit and satisfaction of its target market.

Boldly spell out pending patents or copyright products and intellectual property in this section alongside costs, expected sales revenue, research and development, and competitors' advantage as an overview.

At this stage of your business plan, the reader needs to know what your business plans to produce and sell and the benefits these products offer in meeting customers' needs.

The supply network of your business product, production costs, and how you intend to sell the products are crucial components of the products and services section.

Investors are always keen on this information to help them reach a balanced assessment of if investing in your business is risky or offer benefits to them.

You need to create a link in this section on how your products or services are designed to meet the market's needs and how you intend to keep those customers and carve out a market share for your company.

Repeat purchases are the backing that a successful business relies on and measure how much customers are into what your company is offering.

This section is more like an expansion of the executive summary section. You need to analyze each product or service under the business.

9. Operating Plan

An operations plan describes how you plan to carry out your business operations and processes.

The operating plan for your business should include:

• Information about how your company plans to carry out its operations.
• The base location from which your company intends to operate.
• The number of employees to be utilized and other information about your company's operations.
• Key business processes.

This section should highlight how your organization is set up to run. You can also introduce your company's management team in this section, alongside their skills, roles, and responsibilities in the company.

The best way to introduce the company team is by drawing up an organizational chart that effectively maps out an organization's rank and chain of command.

What should be spelled out to readers when they come across this business plan section is how the business plans to operate day-in and day-out successfully.

10. Financial Projections and Assumptions

Bringing your great business ideas into reality is why business plans are important. They help create a sustainable and viable business.

The financial section of your business plan offers significant value. A business uses a financial plan to solve all its financial concerns, which usually involves startup costs, labor expenses, financial projections, and funding and investor pitches.

All key assumptions about the business finances need to be listed alongside the business financial projection, and changes to be made on the assumptions side until it balances with the projection for the business.

The financial plan should also include how the business plans to generate income and the capital expenditure budgets that tend to eat into the budget to arrive at an accurate cash flow projection for the business.

Base your financial goals and expectations on extensive market research backed with relevant financial statements for the relevant period.

Examples of financial statements you can include in the financial projections and assumptions section of your business plan include:

• Projected income statements
• Cash flow statements
• Balance sheets
• Income statements

Revealing the financial goals and potentials of the business is what the financial projection and assumption section of your business plan is all about. It needs to be purely based on facts that can be measurable and attainable.

11. Request For Funding

The request for funding section focuses on the amount of money needed to set up your business and underlying plans for raising the money required. This section includes plans for utilizing the funds for your business's operational and manufacturing processes.

When seeking funding, a reasonable timeline is required alongside it. If the need arises for additional funding to complete other business-related projects, you are not left scampering and desperate for funds.

If you do not have the funds to start up your business, then you should devote a whole section of your business plan to explaining the amount of money you need and how you plan to utilize every penny of the funds. You need to explain it in detail for a future funding request.

When an investor picks up your business plan to analyze it, with all your plans for the funds well spelled out, they are motivated to invest as they have gotten a backing guarantee from your funding request section.

Include timelines and plans for how you intend to repay the loans received in your funding request section. This addition keeps investors assured that they could recoup their investment in the business.

12. Exhibits and Appendices

Exhibits and appendices comprise the final section of your business plan and contain all supporting documents for other sections of the business plan.

Some of the documents that comprise the exhibits and appendices section includes:

• Legal documents
• Licenses and permits
• Credit histories
• Customer lists

The choice of what additional document to include in your business plan to support your statements depends mainly on the intended audience of your business plan. Hence, it is better to play it safe and not leave anything out when drawing up the appendix and exhibit section.

Supporting documentation is particularly helpful when you need funding or support for your business. This section provides investors with a clearer understanding of the research that backs the claims made in your business plan.

There are key points to include in the appendix and exhibits section of your business plan.

• The management team and other stakeholders resume
• Marketing research
• Permits and relevant legal documents
• Financial documents

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Martin luenendonk.

Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.

Key Resources Overview

Key resources are the most important physical, human, intellectual, and financial assets your organization uses to make your business model successful and sustainable. They include:

Relevant Principles

• Physical resources: Equipment, raw materials, buildings, manuals, and procedures, e.g., any hardware you use is a physical resource
• Human resources: Key people and skills that are needed for the business model to work
• Intellectual resources: Intellectual property, codified systems and processes, and the intangible know-how of your team
• Financial resources: Cash and lines of credit

Resources can be tangible or intangible and are defined in the following way:

• Tangible resources: Physical resources that you can see, e.g., a training manual or a finance assistant
• Intangible resources: Nonphysical resources, e.g., customer knowledge, connections, and networks

Not all of your resources should be listed in your business model canvas. Only the main ones are important for this process. Your key resources can be described as those that:

• Your business model would fail without
• Are difficult to replace
• Make you distinctive or provide you with a competitive advantage

For many business models, you may not have all of the key resources within your organization, so you may need to partner with other organizations and individuals to access them.

Questions that you may want to consider are: Is there a risk for the business model if the resource may not be available in the future? To what extent will the resource allow for growth? When and how do you decide whether a key resource should be held within your organization or can sit with a partner? Have you developed tangible or intangible assets as key resources through your key activities that you could use to innovate your business model?

To complete the key resources building block in your Business Model Sustainability Canvas, you will need to look at the most important inputs and assets your organization uses to make your business model work and determine whether any are accessed through a partner. In section 7.1 , there is information on the importance of making effective resource decisions that will support long-term sustainability.

Section 7.1: Resourcing Decisions ​

This section highlights the importance of evaluating your key resources through the lens of sustainability.

Key discussion areas:

• Understand how the insourcing or outsourcing of activities has an impact on the key resources you develop
• Highlight how key resources can become key capabilities that will potentially deliver new revenue, reduce costs, and create new impact for BUTI segments

Key Takeaways ​

• Key resources are the assets that you need to have in place (or have access to through a partner) for a sustainable business model.
• When defining the necessary resources, concentrate on what’s necessary to perform key activities in your business model.

Complete the following in your Business Model Sustainability Canvas :

• Identify your key resources and determine whether they are yours or a partner’s.
• Section 7.1: Resourcing Decisions
• Key Takeaways

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Key Resources Building Block in Business Model Canvas

Published: 02 January, 2024

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Table of Contents

In the Business Model Canvas, Key Resources appear within the Operating Model. They also play a large role when you’re examining innovation’s risks.

The Key Resources in the Business Model Canvas Building Block plays an important role in understanding what model resources we have available to fuel our innovation, as well as understanding where a key resource is missing.

Every business model succeeds or fails in how key resources are found and used. In short, we can use our Key Resources to build our value proposition by best utilizing our talented human resources and other assets.

By using the Unite extended Business Model Canvas, you can gain a deeper understanding of the potential risks linked to specific bmc Key Resources. It helps shed light on dependencies and provides strategies to mitigate these risks. Download the Unite extended Business Model Canva s now to leverage its benefits and enhance your grasp of the role of Key Resources in innovation and risk management.

Download the Complete eXtended Business Model Canvas package, including instructions for putting it to work for you today.

The UNITE Business Model Canvas

Key resources meaning in business model canvas (bmc).

In any business, the Key Resources are the essential inputs used to create a compelling value proposition , serve the targeted customer segment , and deliver products or services effectively. These resources are the cornerstone of a successful business model and can be both tangible and intangible resources .

When considering what are key resources, it is crucial to identify and list them, categorizing them into physical, financial, intellectual property, and unique people skillsets. Particularly focus on the core and differentiating strengths or capabilities that you may be able to leverage.

Related: Business Capability Map: A Practical Business Approach

Key Resources Examples in Business Model Canvas:

• Fashion Outlet: Imagine you own a fashion outlet that specializes in selling large quantities of overcapacity stock outside the city centre. Your key resources are: a) Cheap location with good access: A strategic location that allows easy access to suppliers and customers, minimizing transportation costs and attracting bargain-hunting customers. b) Contracts with fashion producers: Exclusive partnerships with fashion producers that provide a consistent supply of overstocked items at discounted prices, ensuring a competitive edge in the market.
• Google Business Model: When analyzing Google’s business model, several key resources emerge as essential components: a) Index: Google’s vast index of web pages and content forms the foundation for its powerful search engine, enabling users to find relevant information quickly and efficiently. b) Algorithm: Google’s proprietary search algorithm, constantly refined and improved, ensures accurate and relevant search results, enhancing the user experience and increasing user loyalty. c) Computing power: Google’s robust infrastructure, encompassing hardware, software, and a team of skilled engineers, supports its data centres and complex computations required for various services.
• British Petroleum (BP) and Exxon: In the oil industry, companies like British Petroleum and Exxon rely heavily on key resources such as: a) Oil fields: Access to vast oil reserves and expertise in extraction and refining processes is vital for their operations and revenue generation. b) Advanced drilling technologies: Investment in cutting-edge technologies for efficient exploration and extraction of oil reserves gives them a competitive advantage.
• Ford and Toyota: Automakers like Ford and Toyota require specific key resources to maintain their competitiveness: a) Car factories: State-of-the-art production facilities that enable large-scale manufacturing of vehicles, ensuring timely delivery and cost optimization. b) R&D capabilities: Investments in research and development to innovate and improve vehicle designs and technologies, catering to evolving customer demands.
• Google and Facebook: Tech giants like Google and Facebook rely on key resources like: a) Customer data: Extensive user data collection and analysis allow personalized experiences and targeted advertising, driving user engagement and attracting advertisers. b) Computing infrastructure: Massive data centres and computational capabilities are essential for handling vast amounts of user data and delivering seamless services.

Types Of Key Resources

The types of Key Resources include Human resources , Financial resources , Physical resources , and Intellectual resources. They are each outlined below.

Every model template includes Key Resources, Key Resources can look differently depending on the focus of each specific template, to make conceptualizing your Key Resources easier, however, we usually think about them as falling into one of four categories.

Human Resources

These are your people. Someone has to enact innovation. Ultimately, your human resources do the work of transformation. You’ll need to ensure that your workforce has the skills necessary to move the business forward. Don’t ignore your key partners at this stage, outside organizations may have human resources that you can use with only minor investments.

As you complete a Business Model Canvas, you reflect on the people you’ll ask to do your work. Simply, do you have the bodies in place necessary to put your innovation plans in motion? 

Managers can influence the performance of their human resources in a number of ways. An incentive system rewards performance, though it can be controversial in how they’re applied, be sure to completely think through the incentives you offer, and how employees can obtain them because a poorly applied incentive system can ruin morale and negatively impact performance.

Human resources can also be influenced through organizational schemes . Innovation teams, specifically formed, can have a tremendous effect on the direction a company takes. Other types of organizational designs can funnel talent toward specific tasks or challenges. Good managers know how to best leverage the human resources they have, encouraging the creativity and insight it takes to be truly innovative, they also recognize when an organization would benefit from hiring key employees who will help plans move forward productively.

Human Key Resources Examples:

• People who create the product or service
• Truck drivers who deliver products
• Customer service agents
• Managers who oversee production
• Salespeople
• Human resources employees
• Information technology staff

Financial Key Resources

The numbers are the numbers. The funds you have available, either on hand or at reasonable interest, are your Financial Resources.

When considering your Financial Resources, don’t neglect your access to capital markets . Can you borrow funds? Does it make sense to go into debt? Properly applying credit might give you the opportunity to begin innovation that promotes lasting growth. As a startup venturing into a new market segment, such as Uber did with ride-sharing, financial capital emerges as a critical key resource. Having substantial financial resources allows you to embark on a “land grab” strategy, rapidly capturing market share ahead of competitors as you strive to establish a dominant presence.

Financial Key Resources Examples:

• Cash: money or its equivalent.
• Bank Deposits: money placed into banks, including checking accounts and money market accounts.
• Holdings of Stocks: publicly traded stocks can be easily converted to cash, and are considered financial resources of an organization. These stocks are traded on stock exchanges, like the NASDAQ or the NYSE . It takes only a few minutes to sell stocks on the market.
• Holdings of Publicly Traded Bonds: There are various types of bonds that can be included in the financial resources of an organization: U.S. government securities, mortgage bonds, foreign bonds, corporate bonds, etc…,
• Foreign Currency Holdings: These are currencies issued in another country. Foreign currencies can be held in a local or in a foreign bank. Foreign currency can be quickly converted to local currency, thus they are considered part of the financial resources of an organization. Also, many international companies need to hold amounts of foreign currency to carry out their operations, like selling abroad or paying foreign suppliers.
• Checks: checks are instruments that contain an order that directs a bank to pay an amount of money to the check holder. Checks can be easily converted to money, and sometimes, checks can be used to pay suppliers: checks are financial assets.

Source: https://economicpoint.com/financial-resources-examples

Physical Resources

These are your tangible resources, including capital-intensive production facilities, materials, supplies, property, and equipment. Maybe you have storage areas full of raw materials, or pallets loaded with products. Or maybe you have a point-of-sales system shared across distribution networks. Consumer goods companies are likely to have vast physical resources, while creative industries might rely heavily on their human resources and less on manufacturing facilities or warehouses.

Infrastructure-driven businesses are likely to have materials other businesses lack by the time they’re considering innovation. While that sort of investment can be a signal of a successful business model, it can also have the effect of paralyzing management decisions. “We have all this stuff,” decision-makers think, “and so much capital wrapped up in it, all our solutions have to justify those prior purchases.”

Clearly, that’s not a path toward innovation. It takes a brave visionary to change directions sometimes. Your physical resources don’t have functional value if they are holding you back.

This is a good place to consider some common intangible resources, also. Software, for example, would often not be thought of as a “physical resource” but purchased computer applications in the business world behave like material objects more than truly intangible resources. Related intellectual property often behaves more like a physical resource than an intangible one. Potentially substantial licensing fees for software and other technology must also be evaluated to see if it works in your business model to enhance value creation.

Physical Key Resources Examples:

• Machinery and equipment: This includes the tools you use to make your product, as well as any machinery and equipment that goes into the manufacturing process (for example, a CNC machine).
• Buildings and office spaces: If your business requires a physical location, this may be one of your biggest expenses.
• Vehicles and trucks: If you’re selling a service or product that requires shipping, or if you have an on-demand delivery service for customers, vehicles are an important part of your business.
• Point-of-sale systems: These are useful for businesses that accept in-person payments from customers.

Tesla provides a compelling illustration of the significance of key resources in the Business Model Canvas . Central to Tesla’s business model is the Giga Factory, a facility that holds a crucial role in manufacturing a substantial share of the world’s large batteries. This strategic asset affords Tesla a competitive edge by capitalizing on economies of scale, resulting in cost efficiencies throughout the production of their electric vehicles.

Intellectual Key Resources

Your business is smart, and within its material and its people rests a vast collection of proprietary knowledge acquired through years of hard work and investment. How can you leverage what you know? In other words, what are your Intellectual Resources?

Your business model no doubt relies on what your human resources know. It’s important, then, to have a clear view of the members of your organization’s specialities, education, and experience. They are potentially untapped key resources that can add to your value proposition.

Knowledge management must be part of your overall innovation strategy . Your customer databases must be properly protected and utilized. What kind of information do you keep in those customer databases, and are you properly taking unfair advantage of what you know about your customers? Are you similarly tracking other key partners so you can work with them in the most productive ways?

You should also consider how you’re developing your Intellectual Resources. Many successful business enterprises install a corporate university to educate and train their human resources in-house. That’s a cost-effective way of growing from within that isn’t necessarily capital-intensive. An exemplary illustration of an Intellectual resource rooted in know-how is the Toyota Production System . This invaluable expertise has been instrumental in driving Toyota’s consistent enhancement of productivity and quality for several decades through continuous process improvement.

Intellectual Key Resources Examples:

• Systems and processes
• Customer knowledge
• Customer databases
• Copyrights and patents

How to Determine Your Key Resources

The interconnection of key resources and the value proposition.

Your Key Resources make your business what it is: only you have that particular collection of people, customer knowledge, and key abilities. Taken together, they encircle how you build your value propositions and conduct your key activities. For a successful business model, the link between key resources and the value proposition is crucial. Key resources are the assets and capabilities that help a company create, deliver, and capture value for customers. The value proposition is the unique value a company offers to its customers through its products or services. Understanding this connection is essential for improving the business model and meeting customer needs effectively. Let’s explore how these two components are interconnected:

• Value Creation: Key resources are essential for turning the value proposition into a reality.
• Competitive Advantage: Unique key resources strengthen the value proposition’s market positioning.
• Value Delivery: Key resources ensure efficient delivery of the value proposition to customers.
• Resource Allocation: Specific resources are strategically allocated to support the core value proposition.
• Innovation and Adaptation: Key resources enable companies to innovate and adapt the value proposition.
• Value Capture: The interplay drives revenue and profits by meeting customer needs effectively.
• Resource Optimization: Understanding the connection helps optimize resource allocation for efficiency.

Key Resources play an important role in expanding business and value, and so is a big element of The UNITE Value Proposition Canvas. Unlock the potential of your business with The UNITE Value Proposition Canvas Model as a powerful tool that empowers businesses to expand and create value. One of the key elements within this canvas is the recognition of the vital role played by Key Resources in driving business growth. By carefully connecting each customer segment to its most crucial key resource, you’ll gain invaluable insights into the essence of your business model. You can download The UNITE Value Proposition Canvas now and discover the keys to unlocking your business’s true potential for success.

Download the complete Value Proposition Canvas Package, including instructions for putting it to work for you today.

The UNITE Value Proposition Canvas

Key resources and different types of business models.

A business model is a framework within which a company offers products or services to customers. It includes the structure, key resources, and processes that enable a firm to create, deliver, and capture value. The study of business models is called management science.

Businesses use business models to compete in the market and achieve sustainable success. A successful business model is one that can be replicated and can be applied to similar markets.

In general, business models separate businesses into three types:

• Product-driven Business.
• Scope Driven Business.
• Infrastructure Driven Business.

1- Product Driven Business Key Resources

Product-driven businesses are focused on developing a product and then finding the market for it. This is the opposite of the market-driven model where companies focus on what customers want, and then develop products to meet those needs.

The product-driven model is generally used by smaller companies that have a specific niche or audience in mind. For example, if you have a product that solves a specific problem for a certain group of consumers, then that’s who you’ll market your product to. This can be particularly effective when you have limited funds but still want to make sure your business has some level of growth potential.

The Key resources of these companies are human and intellectual because they usually are able to access intellectual property and know-how in their specific industry and particular niche.

2- Scope Driven Business Key Resources

The key aspect of Scope Driven Businesses is that they will have a clear idea of who their customers are and what they want from them. This means that they will have to spend time trying to understand their customer’s needs and wants before they even consider creating any products or services for them.

The key resources for such a business include:

• An understanding of what your company does best and how you can differentiate yourself from the competition.
• A clearly defined target customer segment.
• An understanding of who it is that you want to serve and how they think, behave, feel and believe.

3- Infrastructure Driven Business Key Resources

Infrastructure-driven business refers to companies that make their earnings by utilizing their infrastructure, For Example:

In the Telecommunications industry, it requires an initial large investment in infrastructure. After that, it will reap the benefits over time with just a small investment to keep its systems up to date,

Amazon is also an infrastructure-driven business because its main function is selling products online. The company can leverage its scale by using economies of scale to drive down costs and increase profits.

The key resources for an infrastructure-driven business are:

• Infrastructure (network, platform, etc.)

Identifying Your Key Resources

Building a strong business model requires attention to all available key resources. We find it useful to brainstorm lists of resources with a variety of team members. Human resources employees will recognize opportunities that a warehouse employee won’t know about, but the warehouse worker will be really smart about logistical matters.

Your IT specialist has insights into your telecommunications infrastructure while your accountant can identify vendor financing opportunities. Each resource mentioned by your team is analyzed and evaluated for its importance in your overall value proposition.

Reflect on the key resources listed in your brainstorming. How do they contribute to your overall business model, and what is missing? Innovation isn’t just a dream; most businesses can identify increasingly important components to their growth efforts as their plans progress.

Capital Resources in Key Resources

Capital resources are an essential component of key resources for any business or organization. Key resources are the strategic assets that a company possesses to create and deliver value to its customers. Capital resources, specifically, refer to the financial assets, funds, and investments that a company uses to operate, grow, and sustain its business operations. These resources are crucial for several reasons:

• Investment and Growth: Funds for research, expansion, asset acquisition, and growth opportunities.
• Infrastructure and Technology: Enables efficient operations through acquiring and maintaining physical and technological assets.
• Human Resources: Attracts and retains talented employees with competitive salaries and benefits.
• Marketing and Promotion: Invests in marketing to promote products/services and build brand awareness.
• Risk Management: Acts as a buffer during economic downturns or crises.
• Innovation and Adaptation: Fuels research and development to stay relevant in a changing market.
• Competitive Advantage: Secures better deals and invests in advanced technologies for a competitive edge.
• Debt Reduction and Stability: Pays off debts and maintains a healthy debt-to-equity ratio.
• Long-Term Sustainability: Crucial for the organization’s growth and stability in the long run.
• Investor and Stakeholder Confidence: Signals financial health and fosters trust for delivering returns.

Connecting The Dots: The UNITE Business Model Framework

The business model canvas serves as a powerful tool for entrepreneurs, prompting them to explore a wide array of possibilities. One crucial element that sets it apart is the emphasis on identifying key resources. As an entrepreneur, you possess the freedom to make strategic choices regarding these resources: whether to develop them in-house, opt for rental agreements, or acquire them through purchase. The decisions made in this regard have a profound impact on your overall cost structure. The UNITE Business Model Framework includes a number of canvases that focus on value creation and finding the right business model to meet your   customer segment and customer needs. The framework is built to inspire drastic changes that help you find a competitive advantage. Our hope is that your company grows through business model innovation, and so we again encourage you to look deeper into our website and the book.

Here is a summary of the key ingredients of the framework:

The Key Resources building block in the Business Model Canvas identifies the essential inputs a business needs for its value proposition, customer segment, and product delivery. These resources can be human, financial, physical, or intellectual. Identifying and leveraging key resources is crucial for optimizing operations, delivering value, and gaining a competitive edge. The UNITE Business Model Framework provides a comprehensive approach to understanding and utilizing key resources for long-term success.

Frequently Asked Questions

1. what is key resource value.

Key resources value refers to the significance and strategic importance of the essential inputs a business possesses to create, deliver, and sustain its value proposition. These key resources play a vital role in the success of the business model by enabling the company to differentiate itself, offer unique products or services, and gain a competitive advantage in the market. Identifying and leveraging key resources effectively allows businesses to optimize their operations, improve value delivery to customers, and achieve long-term success.

2. What are key resources and capabilities?

Key resources are the primary inputs that a business requires to operate, create value for its customers, and achieve its objectives. These resources can be tangible or intangible, such as human capital, financial assets, physical infrastructure, or intellectual property.

Key capabilities, on the other hand, refer to the unique abilities and skills that a business possesses to perform specific tasks or activities effectively. These capabilities are often closely related to the key resources and contribute to a company’s competitive advantage. For example, a well-trained workforce can be a key resource, while the ability to innovate and develop new products can be a key capability.

3. What are resources in a business?

Resources in a business encompass the assets, materials, and capabilities used to conduct operations, produce goods, and deliver services. They can be tangible, like machinery and inventory, or intangible, such as knowledge, intellectual property, and brand reputation. Properly managing and allocating resources is vital for a business to attain its goals and stay competitive in the market.

4. What are the 9 types of resources?

The nine types of resources in a business can be classified as follows:

• Human Resources: The people who work for the company and contribute their skills, knowledge, and expertise to its operations.
• Financial Resources: The funds and capital available to the business for investment, growth, and day-to-day operations.
• Physical Resources: Tangible assets like machinery, equipment, facilities, and inventory that are used in the production process.
• Intellectual Resources: Intangible assets such as patents, copyrights, trademarks, and proprietary knowledge that provide a competitive advantage.
• Informational Resources: Data and information that the company collects, analyzes, and uses to make informed decisions.
• Technological Resources: Tools, software, and technological infrastructure that support the business’s operations and innovation.
• Natural Resources: Renewable or non-renewable resources used in the production process, such as water, minerals, or agricultural products.
• Social Resources: The company’s relationships and networks with stakeholders, customers, suppliers, and partners.
• Reputational Resources: The brand reputation, customer loyalty, and public perception of the company.

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The 4 Key Resources You’ll Need to Grow Your Business

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Key Resources are the components your business needs to build out the value proposition you promise customers. Every business needs them, and without key resources you won’t be able to bring in revenue or have a clear value proposition.

Without key resources, you wouldn’t be able to deliver value and you wouldn’t have a business to build a business model canvas for! 🙂

Here is a visualization of where key resources fits into the business model canvas.

Types of Key Resources

A key resource can fall into any of the four categories that we are going to look at, and you’ll definitely have at least one, so if you’re struggling to come up with this, do some research (more on how below).

Physical Resources

These are resources that you can touch, feel, and are tangible.

Examples of Physical Resources include:

• Machinery and equipment
• Buildings and office spaces
• Vehicles and trucks
• Point-of-sale systems (like Square or Shopify)
• Distribution networks (i.e. storage facilities and the transportation that will get your products from point A to point B)

Intellectual Resources

These are the resources that are intangible but are often just as, if not more important than the physical resources.

Examples of Intellectual Resources include:

• Proprietary knowledge like a certain method of doing things or information you’ve gained through the years on what works best.
• Systems and processes
• Customer knowledge
• Your company’s brand
• Copyrights and patents
• Customer databases

As a service-based business, intellectual property is heavily relied upon to get things done and do them in our own way.

Human Resources

Not to be confused with the HR department down the hall that everyone dreads going to see (sorry HR folks!). These are resources…that are human.

These might also fit in with your key partners piece of the business model canvas.

Examples of Human Resources include:

• People who create the product or service
• Truck drivers who deliver products
• Customer service agents
• Managers who oversee production
• Salespeople
• Human resources employees (sorry, I had to!)

Again, as a service based business, human resources are super important to what I do. Without the right people, using the intellectual property the right way, my business wouldn’t exist.

Financial Resources

Of course, every business model is going to need cash on hand and some lines of credit to keep operations moving. But think about what your business needs.

If you are planning on building the next app that changes the world, you’re going to need quite a bit of money to hire a developer, marketing help.

If you’re opening a franchise location, do you have $50-$100k lying around, or will you need to go out and get a loan?

These are the types of things to think about when it comes to financial resources you’ll need.

Examples of Financial Resources:

• Tradelines and lines of credit
• Venture capital
• Grants and loans
• Stock options for employees

What Resources You’ll Need

If this is your first business or one in an industry you’re not as familiar with, there are a few places you can start to get ideas.

First would be doing some competitive research.

What are your potential competitors doing? Are there any larger companies who have their financials listed publicly that you can get ideas from?

Next, make a list that includes all the key activities you’ll be doing, people you’ll need, and channels you’ll be using to create your value proposition . Then take this list and think about what kinds of resources you’ll need to make those happen.

This doesn’t need to be an exhaustive list, but pull together the major buckets you’ll need to pay attention to in order to be successful.

Key Resources for a Marketing Agency Example

For a marketing agency, there are quite a few resources needed. Here is an example of what this exercise could look like:

To implement campaigns, I’ll need a computer and a place to work (physical resources) . I’ll also need a few pieces of software and tools to keep track of performance and help clients understand how their money is working for them.

I’ll need another person to help me implement everything and free up time so I can bring in sales (human resources) .

I’ll be training this person using proprietary knowledge and systems I have in place that help implement campaigns properly (intellectual resources) .

To get started, I will need to have enough cash set aside to be able to pay this new team member (financial resources).

What do your key resources look like?

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Analyzing Key Resources: Beginner’s Guide

If you’re new to analyzing resources for your business or project, you’re in the right place. Understanding how to identify, evaluate, and use key resources is fundamental for success. In this beginner’s guide, we will break down the process of analyzing resources in a simple and easy way. By the end of this article, you’ll understand the importance of key resources and how to analyze them effectively.

What Do We Mean by ‘Main Parts’ in a Business Plan?

A business plan has main parts like human resources, financial resources, physical resources, and intellectual resources. These parts are crucial for a business to work well and provide value to customers.

Identifying the main parts for a specific business plan means understanding the business’s unique needs, goals, and market.

By asking specific questions and doing thorough analysis, a business can figure out the main parts for its own business plan .

For instance, in a simple business map, the main parts could be the team of employees and their skills, the initial investment and ongoing financial support, the necessary equipment and infrastructure, and any patents, trademarks, or proprietary technology.

These examples show how important it is to identify and prioritize the main parts for effective business planning and management.

Examples of Main Parts in a Simple Business Map

Types of main parts you might have.

A business plan includes physical parts like manufacturing equipment, office space, and raw materials. Human resources, such as skilled professionals, trained laborers, and experienced management staff, are also essential. Financial aspects like funding, capital investment, and budget allocation for research, development, and marketing are crucial. These examples show the main parts that a business needs to consider for a key resources analysis.

Things You Can Touch (Physical Parts)

Physical parts included in a business plan can be tangible assets and resources like machinery, equipment, vehicles, land, buildings, and infrastructure. These elements form the physical foundation of a business and are important for operations and production.

For example, manufacturing companies rely on machinery and equipment to produce goods, while logistics companies need vehicles and storage facilities for transportation and storage.

These physical parts contribute significantly to the overall structure and organization of a business plan by providing a clear understanding of the resources needed for day-to-day operations. They also play a role in determining cost structures, including capital investments, depreciation, and maintenance expenses.

The Team That Helps You (Human Parts)

The people in a business team have different roles and responsibilities such as leadership, management, creativity, innovation, problem-solving, and customer service. Each person brings their unique skills and expertise, which contributes to the business’ success. Strong leadership can motivate employees and boost productivity, while excellent customer service can build loyalty and repeat business.

To integrate the human aspect into the business plan, strategic planning and clear communication are necessary. Identifying strengths and weaknesses of team members helps leverage their skills effectively. Ongoing training and development can further improve their contributions to the business.

Money to Make Things Happen (Financial Parts)

The financial components in a business plan should include budgeting, financial projections, revenue streams, and cost allocation. These elements provide an overview of a company’s financial health and future prospects. They help potential investors and stakeholders make informed decisions. Budgeting and financial projections help identify potential risks and opportunities, guiding decision-making.

Accurately forecasting revenues and expenses allows businesses to align operations with long-termobjectives and adapt to market conditions. Balance sheets, income statements, cash flow statements, and break-even analysis are common financial parts crucial for an effective business plan . They evaluate the financial feasibility of a business model, helping optimize profitability and sustainability.

Ideas and Creations (Intellectual Parts)

Some intellectual parts to include in a business plan are:

• Unique ideas
• Creative concepts
• Innovative solutions
• Proprietary technology
• Trade secrets

These intellectual assets distinguish a business and give it a competitive edge. Including unique ideas and creations strengthens a business plan by showcasing innovation, problem-solving, and market differentiation.

Strategies for highlighting intellectual parts in a business plan include:

• Clearly outlining the intellectual property portfolio
• Emphasizing the market potential and impact of the ideas and creations
• Demonstrating how these intellectual assets align with the overall business strategy

Businesses can also use case studies, success stories, and partnerships to show the practical application and value of their intellectual parts in the marketplace.

Online Tools and Software (Digital Parts)

There are different online tools and software that can help with various parts of a business plan. These include customer relationship management (CRM) software, accounting software, project management tools, and communication platforms.

Using these digital tools can improve processes, manage data, encourage teamwork, and boost customer interaction.

For instance, CRM software is crucial for managing customer data and interactions to build and maintain relationships. Accounting software supports financial management and reporting, ensuring accuracy and organization of financial data.

Additionally, project management tools help organize and track tasks, timelines, and resources, while communication platforms assist in internal and external communication, promoting teamwork and customer engagement.

By integrating these digital tools, businesses can improve efficiency, productivity, and the overall success of their business plan.

Discovering the Main Parts of Your Own Business Plan

Looking at what you do best (key activities).

Business success and uniqueness are determined by specific functions and processes. These include production, design, technology integration, customer service, and marketing.

These activities directly impact product or service quality, efficiency, and innovation.

They also differentiate a business from competitors, providing a competitive advantage and positioning as an industry leader.

For instance, technological innovation can lead to more advanced products, while exceptional customer service can build loyalty and brand reputation.

These activities are essential for the business’s success and uniqueness in the market.

Starting with Your Big Idea (Value Proposition)

A business’s big idea should focus on solving a specific problem or providing significant value to its customers. This might involve addressing a pressing need, enhancing convenience, or delivering a more cost-effective solution.

The value proposition should clearly differentiate itself from existing offerings in the market, showcasing its unique selling points and addressing any relevant gaps or shortcomings.

To attract and retain customers, the big idea should ideally offer something that is in high demand or is currently under-served in the market. This could mean providing exceptional quality, superior customer service, innovative features, or competitive pricing.

By focusing on these key aspects, a business can effectively leverage its big idea to gain a competitive edge and build a loyal customer base.

Getting Creative with Your Business Map

A business map can creatively represent the physical, human, financial, intellectual, and digital components of a business by integrating different colors, shapes, and sizes.

For example, physical resources like inventory, equipment, or facilities can be depicted through icons, while human resources can be symbolized by figures representing different roles in the organization. Financial resources can be presented through dollar signs or icons, and intellectual resources can be showcased through icons representing patents, trademarks, or copyrights. Digital resources can be illustrated through icons representing software, data, or digital platforms.

Using visual elements such as arrows, lines, and symbols, a business map can visually showcase key activities and the value proposition. A flowchart can depict the sequence of key activities and the relationships between different components, while icons, images, and text can highlight the business’s unique selling points. This not only makes the map visually appealing but also facilitates a clear understanding of the business model.

Creating a strong business plan for a new venture can be achieved through innovative approaches like using mind mapping tools, visualization software, or infographic templates. By adopting a visual and creative approach to business planning, entrepreneurs can effectively communicate their ideas, strategy, and vision to stakeholders and investors using creative layouts, color schemes, and imagery to represent different aspects of the business, such as the target market, value proposition, revenue streams, and cost structure.

Creating a Strong Business Plan

Learning how to draw a basic business plan: a free lesson.

The concept of ‘Main Parts’ in a business plan refers to the fundamental elements that make up the plan. These elements are crucial for the business’s success. Examples of main parts in a simple business map include:

• Key resources
• Cost structure
• Revenue streams
• Customer segments

Identifying and analyzing these main parts is essential when starting a business to build an effective business model. It helps in understanding how the business will create value and generate revenue. By determining the key resources, activities, and partners needed, a business can set the groundwork for a successful venture. Understanding the main parts of a business plan is crucial for any entrepreneur looking to start their own business.

Are You Starting Your Own Business?

The blog talks about key resources in the Business Model Canvas (BMC). It’s important to identify and use these resources to create value for customers. Finding the unique value proposition is crucial for standing out from competitors. Determining key activities that the business excels at is also crucial for success. Developing a strong business plan is essential.

The blog also discusses financial, human, physical, and intellectual resources in the business model canvas and their impact on success. It offers an extended Business Model Canvas for risk management and innovation, and consulting services for business model strategy and innovation.

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Original text

Whether you are identifying key resources as a part of a Business Model Canvas or simply trying to understand the things that make your value proposition successful, getting a sense of clarity about your company’s available resources allows you to scale, value, and utilize them as needed.

Think of Key Resources as Things

Simply put, your business’ key resources will either solve or cause problems during the daily operation of the company. Losing track of these key resources can cause your business to encounter previously unforeseen road bumps or lose a significant amount of capital.  Knowing the names behind the foundational resources your business depends on will help you to monitor trends as you use and remove them over time.

Business Model Canvas: Types of Resources

A great way to think about the resources and assets your business depends on is to split them into four broad types.

Physical Business Resources

If inventory doesn’t come in, what would happen to your business?  If a piece of equipment fails, how would that impact the business?  Be aware of the physical dependencies of your company and their most vital components. Inventory, components, materials, buildings, computers, point-of-sale systems, machines, equipment, and distribution channels are all examples of things in this category.

A comprehensive list of physical resources can help you to plan for future emergencies, such as gathering the names of repair companies, find alternate equipment sources, and locating insurances. If possible, consider borrowing another company’s equipment while yours is being repaired. Businesses such as wineries have strong sharing relationships with their equipment in the case of emergencies.

Intellectual Property Resources

More than anything, your company depends on specialized, authoritative knowledge to maintain competition with other businesses. This knowledge can take many different forms. Product manufacturing, software algorithms, and even product designs are all valuable resources to factor into your Business Model Canvas . Extensive measures should be taken to ensure the business owns the rights to said knowledge. Filing for copyrights, trademarks, and patents is one way to do this.

Other valuable knowledge assets may be less obvious, but still just as important to your business. Customer lists, branding, processes, and exclusive partnerships are highly important resources that should be well-guarded. Your company may need to acquire this intellectual property from another company, and then maintain a positive relationship for the greatest benefit.

Human Resources

No matter what business you’re in, your people will always be one of the most important foundational resources. A person can fulfill many roles for your company and help you meet critical needs you may not be fully aware of. A person in your business may:

• Bring marketing value and technical knowledge by being well known in their field.
• Have an incredible relationship with your most critical customers.
• Have the creative vision for directing future products and campaigns.
• Satisfy customers through amazing software troubleshooting.
• Excel at fundraising, networking, sales, and other specialties. 

These are the people who help to create the customer relationships and value propositions that undergird your business.

All you need to do for this section of the BMC is identify your ‘people resources’ and make a list. Later on, you’ll need to figure out how to retain them and continue enabling their skills.

Financial Resources

Needing capital to fund your business may seem like a no-brainer, but money is a largely overlooked resource for many companies during the Business Model Canvas process. Your business may need access to physical cash, a line of credit, or even a loan. A sufficient flow of money is required to pay for obligations (e.g. employees, rent, utilities, loans), take advantage of opportunities (e.g. discounts, purchases for growth), and cover emergencies. Securing excellent relationships with your bank, investors and donors, and other financial providers can be a strategic move as well as a resourceful one.

The Four Key Business Resources at Work

To get a better idea of the four kinds of key business resources, let’s look at the example of a small fictional nursery. The nursery doesn’t have any Intellectual Property at this time, so that category not included on this list.

This business has very carefully outlined their resources in all three relevant categories. They physically possess a greenhouse in which to grow their plants, making the top of the list. Their delivery truck brings said plants to individuals on their customer list, both of which are physical items that can be held, sold, or upgraded.

The plant propagation manager and the plant salesperson each contribute to the overall sales for the company. As invaluable employees with a wide range of experience and ROI, these human resources should be maintained at all costs.

The financial resources of the business include the loan that the nursery took out for their greenhouse, a large part of their income-generating physical resources. A line of credit is also listed to deal with other purchases for the company, such as soil and fertilizer. These financial resources should not be thought of as negative assets, but rather important monetary investments that help businesses grow and thrive.

Define Your Key Business Resources

To identify the key things your business could not live without, trying walking through your company during a day of normal operation. What tools are required to produce your product?  What tangible and intangible assets are required to market it to your customer segments? As you decide on what your key resources are, categorize them to determine whether they consist of general things, physical objects, or people. This is important to keep in mind as you move forward in the BMC to identifying key company activities, or the “actions” your business takes every day.

All businesses will eventually encounter challenges, no matter how prepared they are. Understanding the resources your nonprofit company can’t do without is the first step toward protecting it from unnecessary hiccups and obstacles that could impede its ultimate success.

Additional Reading:

https://www.cleverism.com/key-resources-building-block-in-business-model-canvas/

https://www.youtube.com/watch?v=qSlSBiRXOII

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Discussing Key Resources and Risk Exposure in Your Farm Business Plan

• Margaret Lippsmeyer, Michael Langemeier , and Michael Boehlje
• Center for Commercial Agriculture
• Purdue University

Introduction

Developing a business plan for your farm helps align day-to-day operations with overarching business goals.  In this article, we explore the importance of assessing current business resources and exposure to risk while creating a business plan.  We provide discussion on risks to your business’s key resources, a framework to evaluate the strength of your farm’s resource base, and an outline of how to craft an effective business plan.  These topics link back to our previous articles on integrated risk management (Lippsmeyer, Langemeier, and Boehlje, 2024a) and key resources (Lippsmeyer, Langemeier, and Boehlje, 2024b) where we discussed how macroeconomic factors and other external shocks can influence timing and effectiveness of investments in key business resources.

Assessing Resources

Availability and strength of key resources—including financial, physical, human, organizational, and information technology—should shape your business objectives and determine an effective business plan.  Business objectives and business plans should focus on strengthening your farm’s key resource base.  This resource base acts as a foundation for potential farm expansion, or ability to withstand shocks or stresses in the business environment.  Evaluating key resources is a critical initial step in business planning, ensuring you have accurate benchmarks for your business’s resources.  These benchmarks help to identify which key resources to leverage and which need to be strengthened.

In the next sections we discuss different types of key resources and major risks associated with each.  In addition to this discussion, Figure 1 poses a series of questions which can be used to assess the strength of your farm’s key resources.  These questions are intended to pinpoint potential shortcomings in a farm’s resource base, thereby assisting in the development of a business plan that addresses resources needing improvement.  Figure 2 illustrates risk exposure by resource category.

Figure 1. Assessing Strength of Business Resources

Adapted from Olsen (2007)

Organizational Resources

Organizational resources are the glue which binds together physical, financial, human resources, and information technology, giving direction and meaning to a farming operation.  Organizational resources include business reputation, core values, operational structures, and systems, and play a vital role in differentiating your farm from competitors.  For example, most operations can effectively produce yellow corn, but consistent product quality, reliable logistics, trustworthy relationships with input suppliers and product distributors are ways in which your organizational resources may yield a competitive advantage.

Many risks associated with organizational resources are considered strategic risks.  Strategic risks are caused by external shocks or stresses which create a misalignment between a farm’s business strategy and available resources and capabilities (Lippsmeyer, et al., 2023).  These risks lack off-the-shelf risk mitigation strategies, making them particularly threatening for businesses.  Risks to organizational resources exemplify strategic risk: coming from a variety of sources, are known to cause brand erosion, tarnish reputation, obscure business strategy, and lack effective tools to mitigate these risks.

Adverse weather conditions reducing crop yield is often categorized as a production risk.  However, if as a consequence your operation fails to fulfill a sales contract, the risk becomes a strategic risk, impacting your business’s reputation.  Although distributors may have alternative sources to compensate for your shortfall, your farm’s reliability in meeting contractual obligations could come under scrutiny.  This could adversely affect your future prospects of securing contracts with the same distributor.

Brand erosion and loss of reputation frequently relate to three factors: price, timeliness, and quality.  Balancing a competitive price and product quality is a challenge which impacts a farm’s ability to maintain a positive reputation and retain customers.  Moreover, perceptions of certain farming practices (i.e., production using certain chemicals or hormone treatments), negative publicity, or increases in competition may also contribute to brand erosion and reputation loss.

The clarity of a business strategy is another component of strategic risk.  Business strategy may become compromised due to complexities of relationships between operators, employees, and outside parties; or through attempts to expand to seize economies of scope.  For example, business strategy may become unclear during periods of high employee turnover or when a business expands into new market channels.  Periods high turbulence, when structure, goals, and values become unclear, are when resilience is most necessary.  Operational resilience can serve as a dynamic buffer, enabling quick adaptation to internal and external pressures, and sufficient slack resources to provide leeway while maneuvering through unforeseen challenges (Lippsmeyer and Langemeier, 2023).

Information Technology

Information technology draws parallels between the collection and use of farm data to the concept of ‘surveillance capital’ used to enhance social media platforms (Lippsmeyer, Langemeier, and Boehlje, 2024b).  In the context of production agriculture, information technology provides data-driven insights, helping producers identify operational inefficiencies, and assisting in on farm decision-making.  The effectiveness of this resource is highly dependent on data collection, organization, and ability to accurately analyze the data and draw correct interpretations.

A common risk associated with information technology is data security.  Whether it is financial data collected by a lender, input supplier data, or your farm production data, there are significant concerns about how to protect data from being stolen or accessed without permission.  Strategies to limit data accessibility include user authentication to ensure only authorized users can access your farm records, data encryption for sending sensitive information, and access control limits to restrict who can view, modify, or delete data.  In the age of increasing data collection and use, it is critical to read and fully understand contracts with equipment or information technology companies prior to signing away rights, and subsequently, knowing how to revoke access if necessary.

Risks relating to information technology span beyond data security.  Often even if data collection and storage is done in a secure manner, there remain difficulties or limitations associated with data processing.  This poses potential issues of uninformed or ill-informed farm decisions if incorrect conclusions are drawn from analysis, despite best efforts to use data driven insights.

Financial Resources

Financial resources include cash, investments, equity, and receivables, all of which provide liquidity to fund business expenses and updates to physical resources.  Sufficient financial resources ensure farming operations can pursue new opportunities when they arise and have ability to weather through unexpected periods of high input costs or low market prices.  Risks to financial resources include limited access to debt or equity capital and insufficient liquidity.  Without the availability of financial resources, the ability to grow or seize new opportunities is significantly constrained, if not entirely unfeasible.

Physical Resources

Physical resources include land, machinery, buildings, and inventories.  These assets are characterized by significant initial investment, continual need for maintenance, and a lack of liquidity relative to financial resources.  Assessments of physical resources may vary based on the type of farming operation and the type of resource but generally take into account the resource’s useful life, initial level of investment, quality of maintenance, and salvage value.  For example, maintaining land resources may involve soil testing, use of fertilizers to improve nutrient content, or use of cover crops to prevent erosion.  While other physical resources like planters and combines need much more frequent maintenance and replacement after exhaustion of their useful life.

One of the major risks related to physical resources is inefficient use (i.e., low utilization rates).  Inefficient use of machinery or storage facilities results in higher than necessary production costs.  However, inefficient use may be justified in some scenarios.  While inefficient use of physical resources is undesirable in the long run, for an operation that plans to grow, having some degree of slack may increase flexibility.

Other risks include improper care and overuse of a resource.  These risks are often attributed to poor management or lack of investment due to ownership structure – for example, producers who rent versus own machinery or farm ground are typically more hesitant to make major investments because there is no guarantee they will reap the future benefit from the investment.

Inventories are the final physical resource we will address.  Inventories, particularly stored crops, present unique risks including contamination with aflatoxin, insect infestation, or fire in storage bins from inadequate drying procedures.  Inventories are the most liquid physical resource for farming operations, typically being sold within one year of harvest, and often used to supplement financial resources.

Human Resources

There are two varieties of human resources we will discuss: those internal to an operation and those which are external.  Internal human resources include employees, management, company owners, as well as the relationships, knowledge, and competencies of each.  These resources have extensive operational and industry knowledge which is built through time.  Prior research shows experience displays positive relationships with profitability and financial efficiency (Vanhuyse, Bailey, and Tranter, 2021).  Lippsmeyer, Langemeier, and Boehlje (2024b), discuss the importance of human resources and provide strategies for how to attract and retain quality employees.  Risks relating to internal human resources include talent shortages, insufficient workforce, employee retention, and lack of experience.  Losing employees incurs significant operational costs, both directly (due to insufficient labor availability) and indirectly (due to loss of tacit operational knowledge) (Spender and Grant, 1996).

External human resources include customer relations, interactions with and knowledge of suppliers.  These relationships are more challenging to control due to their indirect connection with a business, yet remain critical for success.  Risks relating to customer relations include losses of long-term customers and related market opportunities.  Often these risks are closely related to product quality, pricing, and timeliness, as well as organizational resources.  If customers perceive you as an unreliable supplier, relationships will deteriorate quickly.  Maintaining consistent product quality, efficient logistics, knowledgeable employees, and quality service are all strategies businesses use to encourage longevity of reliable customer relationships (Claycomb and Martin, 2001).

Supplier risks include untimely deliveries, varying quality of inputs, and excessive or unexpected costs.  These factors have the potential to influence quality or price of a product, potentially reflecting poorly on your business.  Careful and frequent evaluation is necessary to decide which suppliers to continue doing business with, how to set and maintain input standards, and strategies to reward suppliers for desirable behaviors.

Setting Business Objectives

Obtainable business objectives are a critical part of every good farm business plan, so a direct path can be plotted from current performance levels to improved performance where objectives are met.  Objectives may vary by enterprise, but likely revolve around improving quality standards, profitability metrics, and timeliness.

Objectives may include achieving specific quality benchmarks for products, retaining a specific proportion of contract agreements from year to year, ensuring a given percentage of deliveries are completed on time, or having management take part in strategy, business, or leadership improvement workshops.  Objectives relating to information technology include learning to collect and store yield data, or developing systems to analyze the impact of different inputs on crop health.  Objectives for financial resources include achieving specific financial ratio benchmarks, paying off high-interest lines of credit, or saving to invest in a new piece of machinery.  Objectives to enhance and maintain human resources might involve hiring additional staff, offering career development opportunities, or offering incentives for loyal customers.

Developing A Business Plan

Using Figure 1, we encourage you to evaluate each of your farm’s key resources to help pinpoint any weaknesses in your resource base and subsequently identify areas in your operation needing improvement.  Business plans should begin by identifying strengths or weaknesses of current resources, assessing the implications of relative strengths (or weaknesses) in achieving business objectives, and then focus on setting up step by step plans to achieve those objectives.

Once your business plan has been created, considerations also need to be made for the timing of major organizational changes or substantial investments.  Both external shocks (e.g., macroeconomic uncertainties) and available operational slack must be considered to identify optimal timing to improve your resource base (Lippsmeyer, Langemeier, and Boehlje, 2024b).

In order to identify actions effective in making change, regular evaluations with consistent standards must be used to assess resource strength and progress made towards achieving objectives.  Continually assessing strengths and weaknesses of key resources and identifying potential improvements can prevent businesses from developing a ‘needs-based strategy’ which waits for major issues to arise, then scrambles to control damage.

Conclusions

This article has provided a discussion of key resources and risks associated with each.  By considering the strengths and weaknesses of your resource base, combined with the appropriate timing for investments, you will be better equipped to develop an effective business plan.  Using the tools provided in this article, we prompt you to critically assess your farm’s key resources and develop a business plan which progresses from your current resource base to achieving business objectives.

Claycomb, C. and C.L. Martin, C. L. (2001). “Building Customer Relationships: An Inventory of Service Providers' Objectives and Practices.” Marketing Intelligence & Planning, 19 (6). https://doi.org/10.1108/EUM0000000006109

Lippsmeyer, M. and M. Langemeier. (2023). “ Agility and Absorption Capacity .”  farmdoc daily (13):75, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, April 24.

Lippsmeyer, M., M. Langemeier, J. Mintert, and N. Thompson.  (2023). “ Resilience to Strategic Risk .”  farmdoc daily (13):115, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, June 23.

Lippsmeyer, M., M. Langemeier, and M. Boehlje.  (2024a). “ Integrated Risk Management: Developing an Asset-Based Business Strategy .”  farmdoc daily (14):54, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, March 18.

Lippsmeyer, M., M. Langemeier, and M. Boehlje.  (2024b). “ Key Resources Determining the Future of the Farm .”  farmdoc daily (14):60, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, March 27.

Olsen, E. (2007). Assessing Your Business and Its Capabilities. In Strategic Planning for Dummies (pp. 121-140). Indianapolis: Wiley Publishing, Inc.

Spender, J., and R. Grand, R. (1996). Knowledge and the Firm: Overview. Strategic Management. https://doi.org/10.1002/smj.4250171103

Vanhuyse, F., A. Bailey, and R. Tranter. (2021). "Management Practices and the Financial Performance of Farms." Agricultural Finance Review, 81(3) . https://doi.org/10.1108/AFR-08-2020-0126

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Like many customers today, you are probably reevaluating how to best run your VMware workloads, and whether to keep them on-premises or move them to the cloud. Whichever path you choose, it will require an investment of time and resources. This is an opportunity to consider your long-term platform strategy – so you spend your resources wisely to reduce technical debt while you set yourself up for success in the future.

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Azure VMware Solution delivers a fully managed VMware environment in Azure that is operated and supported by Microsoft. You can move VMware workloads to Azure “as is” so your applications require little or no refactoring. This streamlines migration and you can continue using familiar skills while learning new Azure skills. The State of Alaska recently migrated 1,200 servers comprising 700 applications in less than three months. The state faces unique challenges due to its size and geography, and the move to centralize applications and data on Azure improved resiliency and security, while helping the state enhance data transparency to its citizens.

As part of your move, we recommend that you optimize with Azure monitoring, security, automation, and other services. This approach has been successfully adopted by Knorr-Bremse , a global manufacturing firm based in Germany. They utilized Azure Migrate and Modernize to facilitate their transition, which included planning, migration, and staff training for Azure skills. They now efficiently run their workloads using Azure VMware Solution as well as other Azure IaaS and PaaS services. The beauty of Azure management services like Azure Monitor is that you can use them across all your cloud workloads and extend them to manage VMware workloads on-premises or even those running in other clouds. With this adaptive approach, Azure becomes your new unified IT operations center with access to any Azure service you need now or in the future. 

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KPMG Announces 2024 U.S. Impact Plan

NEW YORK, April 29, 2024 —  Today, KPMG LLP, the U.S. audit, tax, and advisory firm, published its 2024 U.S. Impact Plan reporting the firm’s efforts and related metrics in environmental sustainability, social responsibility, and robust governance practices for the fiscal year ending September 30, 2023. This report details KPMG’s ongoing commitment to these areas since the release of its inaugural report in 2022.

"Our continued hard work and investments propel our impact and the progress we’ve made so far toward our commitments, and this year’s report highlights the actions we’ve taken to enhance accountability and transparency in our work,” said KPMG U.S. Chair and CEO Paul Knopp. “Through sustainable business operations and a focus on the well-being of our people and communities, we are investing in a future that aligns with our values and ensures our position as a trusted advisor to our clients and the C-suite."

Each year, the KPMG U.S. Impact Plan highlights the firm’s continued investments and accountability across four key pillars: People, Planet, Prosperity, and Principles of Governance. These pillars serve as the cornerstones of our business and are instrumental in driving our ongoing success as an industry leader.

Key highlights include:

People: empowering kpmg professionals and fostering their well-being, with a focus on 4 key areas.

• Growing capabilities – Identifying future skills and supporting various ways that people learn;
• Working smart – Enabling effective and agile delivery models with the best combination of teams and technology;
• Leading at every level – Building world-class leaders across all levels of the firm who instill trust and engage with people, clients and the capital markets; and,
• Thrive@KPMG – Focusing on well-being through a healthy work environment and culture that supports flexibility, recovery and respect. 

PLANET: Reducing the firm’s greenhouse gas emissions

• 28% reduction in the sum of the firm’s scope 1 and 2 emissions since 2019.
• Utilization of funds from KPMG’s internal carbon price of $15 to sign two renewable power purchase agreements from NextEra Energy Resources to generate 29 MW of renewable energy from two new solar projects in Texas.

PROSPERITY: Creating a world with equity and access to opportunity for all

• $17.4 million in funds to organizations in support of the KPMG U.S. Foundation's mission and vision of a world underscored by equity and access to opportunity;
• $1.1 million raised from the KPMG U.S. Foundation and KPMG U.S. partner and employee donations to help support communities impacted by natural disasters;
• $351,000 in grants awarded through our Employee Relief Fund.

PRINCIPLES OF GOVERNANCE: Harnessing the power of artificial intelligence (AI)

• Over the course of 2023, KPMG made generative AI capabilities available to all of its professionals and provided training and development offerings to help them effectively harness the technology to enhance the quality of client services and improve their own experience at the firm.   

“This work serves as the foundation for how we make the difference at KPMG and reflects our dedication to creating long-term value for our people, clients, society and the planet,” said KPMG U.S. Deputy Chair and COO  Laura Newinski . “Through our journey, we aim to inspire others to take action and embrace sustainable practices by sharing insights that can empower others to make a positive impact and contribute to a more sustainable future.”

About KPMG LLP

KPMG LLP is the U.S. firm of the KPMG global organization of independent professional services firms providing audit, tax and advisory services. The KPMG global organization operates in 143 countries and territories and has more than 273,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

KPMG is widely recognized for being a great place to work and build a career. Our people share a sense of purpose in the work we do, and a strong commitment to community service, inclusion and diversity and eradicating childhood illiteracy. Learn more at www.kpmg.com/us .

Katy Reddin

Associate Director, Corporate Communications

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The 2024 KPMG U.S. CEO Outlook Pulse Survey

CEOs are tackling risks to growth including geopolitics, cyber and structural changes such as tight labor market and new regulations, according to KPMG's latest survey.

KPMG Named One of Fortune Magazine’s 100 Best Companies to Work For

The Firm Celebrates Its 17th Year on the List; Honor Recognizes KPMG’s Continued Commitment to Support and Upskill Its People

Context for Change: AI Dominates Consumer Tech Trends

KPMG released the Context for Change survey measuring how consumers across twenty major U.S. cities are perceiving future macroeconomic and tech trends.

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Business | Key Bridge collapse: Port channel reopening on…

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Business | Key Bridge collapse: Port channel reopening on target, recovery efforts continue, Gov. Moore says

The Dali struck a key support pillar of the bridge March 26, sending it plummeting into the Patapsco River and killing six construction workers who had been repairing potholes on the span.

Since then, the mammoth cargo ship has remained aground and trapped under a massive chunk of the bridge as crews strive to restore at least some shipping traffic to one of the East Coast’s busiest ports.

The temporary Fort McHenry Limited Access Channel that crews hope to reopen in a week and a half with a depth of 45 feet had opened temporarily for four days with 38 feet of bottom clearance. Before closing as expected Monday morning, five ships that had been stranded in Baltimore were able to escape, while the first container ship to call the port since the accident arrived and departed.

In total, during the four-day window, 19 vessels sailed through, including nine arrivals and 10 departures, carrying sugar, cement, fertilizer, lumber and other goods, and providing work for nearly 200 members of the International Longshoremen’s Association, Gov. Wes Moore said Tuesday during a news conference.

“That’s an important milestone,” Moore said. But, he added, “it’s a temporary solution. We cannot take our eyes off the ball. The focus is making sure that we are going to open the 50-foot channel, and we will.”

But to restore the port to its full capacity and rebuild the bridge, Moore said, the state needs the support of Congress. To that end, he said he has visited Capitol Hill and, later this week, will host the “entire” House Committee on Appropriations.

“We’ve already had members of Congress … from Florida to Washington state show up to see the wreckage,” he said.

Moore and other officials said they continue to search for the bodies of two construction workers, Miguel Luna and José Mynor López, who remain missing. Previously, crews recovered the bodies of their co-workers, Dorlian Castillo Cabrera, Maynor Suazo Sandoval,  Alejandro Hernandez Fuentes and Carlos Daniel Hernández.

“We’re still looking for two missing workers — two unaccounted-for souls — and that search for them has not changed,” the Democratic governor said. “We’re still working closely with the families of the victims, and that has not changed.”

Col. Roland L. Butler Jr., the Maryland State Police secretary, said sonar images and mapping techniques have helped give divers a general area where the men’s bodies might be found.

“It’s very poor visibility down there. There’s so much debris,” Butler said. “We believe we have areas of interest. We’re unable to access those areas of interest.”

Divers and salvage crews have been communicating about “what they’re seeing, where they’re locating things” and developing plans on where to search once an area has been determined safe, he said.

Moore said a minimum of 25 divers, 10 from the state police’s underwater recovery team, are available on any given day to fulfill the state’s commitment to bring closure to the families of the victims.

Noting that Tuesday marked five weeks since the “unthinkable tragedy,” Baltimore Mayor Brandon Scott said the city and state are continuing efforts to make resources available to both the families of those killed in the bridge collapse and workers and businesses who have been affected by the resulting slowdown in port traffic.

A fund organized by Baltimore’s Office of Immigrant Affairs has raised more than $750,000 for the victims’ families, he said.

Meanwhile, efforts continue to free the Dali.

In a news release Tuesday afternoon, the Port of Baltimore said the vessel is expected to be removed by May 10.

But at the media briefing, Coast Guard Rear Adm. Shannon Gilreath said: “I can’t give you an exact date of when the Dali is going to be removed because there’s a lot of factors that play into that. Both the engineering the salvage operations themselves and weather and so we’re going to continue to move to do this safely and as fast as possible.”

So far 182 containers have been removed from the ship, and the next step is “remarkably complicated,” removing a piece of steel the size of the Eiffel Tower, Moore said.

According to Gilreath, crews will use a precision cutting technique to break down the massive piece of wreckage draped across the Dali’s bow.

“We are able to institute all those cuts simultaneously,” he said, “so that they’re not trying to cut something and then something from another section collapses.”

Crews have been using a hydraulic grabber to clear debris from the harbor’s main shipping channel, which is 50 feet deep and 600 feet wide. The “Gus” hydraulic grabber has a capacity to lift 1,000 tons in a single pull from the water, Moore said. More than 3,300 tons of debris have been pulled from the water so far, he said.

There’s an estimated 50,000 tons of wreckage — steel and concrete — along the bridge’s former path.

So far, more than 200 vessels have come through the four alternate channels that have been opened, Moore said.

When it opens, the new 45-foot channel is expected to be open overnight daily from 8 p.m. to 7 a.m. Officials have said the goal is to fully open the main channel by the end of May.

Salvage efforts continue as workers make preparations to remove the wreckage of the Francis Scott Key Bridge from the container ship Dali five weeks after the catastrophic collapse. (Jerry Jackson/Staff)

Crane barges surround the contianer ship Dali and wreckage of the Francis Scott Key Bridge as salvage efforts continue five weeks after the catastrophic collapse. (Jerry Jackson/Staff)

An osprey perches on the twisted rebar of one of the destroyed Francis Scott Key Bridge support structures. (Jerry Jackson/Staff)

Crane barges surround the remaining support pier of the Francis Scott Key Bridge collapse site as salvage efforts continue. (Jerry Jackson/Staff)

A massive claw nicknamed Gus is used to grab huge pieces of debris at the Francis Scott Key Bridge collapse site. (Jerry Jackson/Staff)

Salvage experts work in the wreckage of the Francis Scott Key Bridge resting on the bow of the container ship Dali Tuesday afternoon. Preparations are underway to remove the bridge wreckage from the ship. (Jerry Jackson/Staff

Salvage experts work in the wreckage of the Francis Scott Key Bridge resting on the bow of the container ship Dali Tuesday afternoon. Preparations are underway to remove the bridge structure from the ship. (Jerry Jackson/Staff)

Salvage experts work in the wreckage of the Francis Scott Key Bridge resting on the bow of the container ship Dali on Tuesday afternoon. Preparations are underway to remove the bridge wreckage from the ship. (Jerry Jackson/Staff

Salvage experts work hign in the wreckage of the Francis Scott Key Bridge resting on the bow of the container ship Dali Tuesday afternoon. Preparations are underway to remove the bridge structure from the ship. (Jerry Jackson/Staff)

The Pride of Baltimore II travels past the Francis Scott Key Bridge collapse site Tuesday afternoon on her way into port. (Jerry Jackson/Staff)

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