Looking For A Business Plan Alternative? Consider A Business Model Canvas For Startups - Forbes

Looking For A Business Plan Alternative? Consider A Business Model Canvas For Startups - Forbes


Looking For A Business Plan Alternative? Consider A Business Model Canvas For Startups - Forbes

Posted: 30 Sep 2019 06:00 AM PDT

By Rieva Lesonsky

Is the thought of writing a business plan holding you back from starting a business? If you're eager to get your business idea off the ground—without the drudgery of creating a massive document first—a business model canvas for startups might be right for you.

What is a business model canvas for startups?

A business model canvas is a quick-start alternative to a business plan. It helps you think through the most important aspects of startup—such as your product or service, your target market, and the resources you'll need to launch—in a brief chart format.

When to use a business model canvas

Why might you want to use a business model canvas instead of a traditional business plan? Here are some situations where a business model canvas might be appropriate:

  • You suddenly have an opportunity you want to act on. Maybe a restaurant space is for lease in the exact area you dream of launching your restaurant. Perhaps you have the chance to form a partnership with someone who has lots of the resources you need to start a business. Using a business model canvas can enable you to act quickly before opportunity slips away.
  • You want to beat the competition. If you have an innovative business idea, such as a software application or invention, using the business model canvas can help you be first to market. In a highly competitive space, other startups are likely planning launches similar to yours; the business model canvas can help you get the jump on them.
  • You don't need outside financing. If you are trying to get a bank loan, angel capital, or venture capital, you'll need to have a traditional business plan ready to show the financing source. But if you have sufficient startup capital on your own, there's no law saying that you have to follow the traditional business plan format.
  • You want to rapidly assess the viability of your idea. Writing a traditional business plan will reveal any flaws in your idea; however, a business model canvas can help you pinpoint problems faster. Using a business model canvas, you can decide immediately if your idea will fly or if you need to revise it or scrap it and move on to another concept.

Of course, some people just prefer the speed of a business model canvas and don't want to spend weeks or months crafting a lengthy traditional business plan. If this is you, go ahead and try the business model canvas. Just keep in mind this format isn't an excuse for neglecting the details of planning your startup.

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What's included in a business model canvas for startups

The business model canvas for startups takes a high-level view of your business idea and focuses on the key elements you'll need to make it viable. Developed by Alexander Osterwalder, it's a one-page document in chart form that covers the nine "building blocks" that help your business startup make money.

  1. Key partners: Who are the buyers, suppliers, partners, and other alliances that can help you accomplish core business activities?
  2. Key activities: What are the most important actions you need to take in order to fulfill your value propositions, strengthen customer relationships, secure distribution channels, and maximize revenue streams?
  3. Key resources: What essential resources are needed to launch and run your business and create value for your customers?
  4. Unique value proposition: What products and services do you plan to offer? What customer needs do they meet? How do they differentiate your business from your competition?
  5. Customer segments: What customer groups will your business serve? Identify the customer personas that your business provides value for.
  6. Customer relationships: What relationships will you build with your customer segments? What kind of relationship does each customer segment expect?
  7. Channels: What distribution methods will you use to deliver your products or services to your target market?
  8. Cost structure: What will it cost to start and sustain your business? Which resources and activities will be the most expensive?
  9. Revenue streams: How will your business make money? How will you price your products and services? Are there other potential revenue streams?

You can create a business model canvas on paper or a whiteboard. There are also several apps you can use to create your business model canvas; they allow you to incorporate additional information, easily save and share the business model canvas, and more.

Where to get help with the business model canvas

There are several places to get help creating your business model canvas. You can start by watching this SCORE webinar on using the Business Model Canvas. Then visit Strategyzer, Canvanizer, and Xtensio to find a business model canvas tool you can use. You'll also find sample business model canvas examples, resources, and training to help.

Both the traditional business plan and the business model canvas can help startup entrepreneurs evaluate their ideas and make important decisions about launching their startup.

Of course, you can use both methods if you want. Many entrepreneurs start with a business model canvas to give them a "jump start" and then flesh out a traditional business plan further down the road.

(Disclosure: SCORE is a client of my company.)

I am CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email me at rieva@smallbizdaily.com, follow me on Twitter @Rieva, and visit my website SmallBizDaily.com to get the scoop on business trends and sign up for my free TrendCast reports. Read all of Rieva Lesonsky's articles.

RELATED: Don't Waste Time on a Startup Business Plan—Do These 5 Things Instead

This article was originally published on AllBusiness.

Local Organizations Get Grants To Help Businesses - KNSI Radio

Posted: 30 Sep 2019 06:15 PM PDT

Local Organizations Get Grants To Help BusinessesClick to Enlarge Photo: MN Department of Employment and Economic Development Website

(KNSI) - The Minnesota Department of Employment and Economic Development (DEED) has awarded two-year grants totaling $2.7 million to 13 nonprofits including two in Central Minnesota.

Saint Cloud State University Small Business Development Center, St. Cloud, $75,625 The center provides programs and services for small businesses and entrepreneurs in the St. Cloud area.

The Business Development Competitive Grant Program, which was approved during the 2019 legislative session, provides funding to groups that offer business assistance to targeted groups, including women, minorities, rural residents, technology-based companies and entrepreneurs.

DEED is the state's principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade, and community development.

The following groups were also awarded funding for two years:

African Development Center, Minneapolis, $240,000 This group provides training, lending, and technical assistance to help African immigrants and refugees achieve economic prosperity in Minnesota.

Community and Economic Development Associates, Chatfield, $165,000 This group will implement the Harness and Harvest program to provide business training and technical assistance to agriculture-related businesses in rural areas in Southern Minnesota.

Entrepreneur Fund, Duluth, $200,000 This group helps people in Northeast Minnesota start and grow successful, locally owned small businesses.

Latino Economic Development Center, $199,875 This group provides culturally and language-specific small business training and technical assistance to Minnesota's Latino communities.

Leech Lake Financial Services, Cass Lake, $100,000 This project will assist the individual entrepreneur in establishing and growing new business on the Leech Lake Reservation.

Lower Sioux Indian Community, $100,000 This project will provide financial literacy workshops, financial counseling, a business plan development class, and Native arts entrepreneurship workshops.

Metropolitan Consortium of Community Developers, Minneapolis, $320,000 This group will implement the Open to Business Program Open to assist entrepreneurs in all aspects of business plan development, financing, and technical assistance.

Minnesota State University Small Business Development Center, Mankato, $274,000 The center provides programs and services for small businesses and entrepreneurs in the Mankato area.

Northland Foundation, Duluth, $200,000 This group will be implementing Small Business Development Center program, which will provide programs and services for small businesses and entrepreneurs in the Duluth area.

Red Wing Ignite, Red Wing, $105,000 This group provides support, training, and networking opportunities for innovative start-ups and businesses in the Red Wing area.

WomenVenture, St. Paul, $340,000 WomenVenture helps women entrepreneurs, low-income entrepreneurs, and women-owned businesses to develop and expand businesses and create jobs.

Find out how to start a business at SIU's Small Business Development Center workshops - SIU News

Posted: 30 Sep 2019 12:54 PM PDT

September 30, 2019

Find out how to start a business at SIU's Small Business Development Center workshops

by Christi Mathis

CARBONDALE, Ill. — Have you longed to own your own business? Perhaps you have a good idea for a product or service and wonder if you could make a living providing it.

If you've ever pondered launching your own business, or if you'd like to expand your current small business and take it to the next level, check out the "Starting a Business in Illinois" workshops the Small Business Development Center (SBDC) at Southern Illinois University Carbondale is offering this fall.

A voice of experience

Tracy McGee, of Creal Springs, has learned firsthand how helpful the workshop and resources at the SBDC can be. McGee attended a "Starting a Business in Illinois" workshop in June. Her business startup, Treasured Creations, features soaps and salves she creates herself by hand. Her plans include expanding with the second phase of operations to include a "pick-your-own" herb farm and eventually perhaps an herb Community Supported Agriculture operation.

She found both the workshop and the Small Business Toolkit informative and valuable. She's also meeting one-on-one with SBDC advisers and continuing to work on her business plan as she works toward her goals and establishes her business.

McGee said she's amazed to find such valuable resources here in Southern Illinois, especially considering the low cost of the workshop and that there's no charge for the other services.

"A lot of people have to pay a lot of money for the services I am receiving here at the SIU SBDC," McGee said.  "I'm grateful for that support."

Three workshops offered

The expertise that has proven so valuable to McGee and numerous other entrepreneurs is available to everyone in the region.

There are currently three SBDC workshops planned this fall. All take place at the Illinois Small Business Development Center/International Trade Center, located at 1740 Innovation Drive in SIU's Dunn-Richmond Economic Development Center.

The workshop schedule includes:

  • Oct. 7, 5-7 p.m.
  • Nov. 5, 1-3 p.m.
  • Dec. 9, 9-11 a.m.

Watch the website, https://sbdc.siu.edu/, for postings of the schedule for spring 2020 workshops, too.

 Workshops cover many topics

Each two-hour workshop presentation incorporates the most recent information available about creating a successful business or expanding an existing company.

Featured topics will include:

  • Start-up requirements.
  • Business planning.
  • Obtaining financing.
  • Legal structure.
  • Licensing and registration.
  • Market research and planning.

Participants receive instruction, business toolkit and more for $20

The cost of the workshop is $20 and that covers the cost of the presentations and more.  Those attending will receive a business toolkit, in both print and electronic formats. The kit contains an assortment of helpful checklists, guides and resource booklets from the Illinois Small Business Development Center statewide network and the U.S. Small Business Administration, as well as other helpful information.

Participants will also have access to the expertise and assistance of the center's experienced, professional staff. They will connect with certified business advisers who can help them assess their business plans and determine how to reach their goals during the question and answer session following the workshop.

Sign up now

Seating for the workshops is limited and frequently fills up fast so register now. Find complete details and registration online at sbdc.siu.edu. Or, call 618/536-2424 or email sbdc@siu.edu for more information.

SIU's SBDC helps business owners in many ways

SIU Carbondale hosts the Illinois Small Business Development Center with funding provided by the U.S. Small Business Administration and the Illinois Department of Commerce and Economic Opportunity.

The center provides a wide variety of services to prospective and current business owners and others. From concept to creation to expansion, the SBDC's staff are available to help. Typically, services are provided at no cost. To learn more about SIU's entrepreneurship and business development programs and services, contact the center at 618/536-2424 or by emailing sbdc@siu.edu.

The ultimate wealth creation for small business owners - Mortgage Professional America

Posted: 30 Sep 2019 08:59 AM PDT

Being an entrepreneur can be exciting—but in many cases, the flexibility and freedom gives way to never-ending hours and financial stress. For those small businesses that occupy a brick-and-mortar location, that financial stress is often tied to rent.

Business owners have no control over the rise and fall of rental rates, which makes it difficult to capture in a long-term business plan. If they own their unit, however, then financial planning becomes much more manageable.

The Small Business Association (SBA) 504 Loan program provides approved small businesses with long-term, fixed-rate financing used to acquire fixed assets such as property or equipment for expansion and/or modernization. It's specifically designed for owner-occupied commercial real estate, and it allows small business owners to have control over their destiny.

"It's the perfect opportunity for small business owners to actually create wealth by purchasing their commercial property. Most small businesses will pay a landlord rent for the complete tenure of their business—18+, 20+ years in their business and in the same spot, paying a mortgage to a landlord—and if they would have purchased that commercial real estate, in most cases, that property can be just as valuable as their business by the time their career is over. So we look at it as not necessarily a loan, but as a wealth creation strategy for small business owners," said Matt Craig, chief marketing officer at Fountainhead Commercial Capital.

504 Loans are typically structured with SBA providing 40% of the total project costs, a participating lender covering up to 50% of the total project costs, and the borrower contributing 10% of the project costs, according to the U.S. Small Business Administration. Under certain circumstances, a borrower may be required to contribute up to 20% of the total project costs.

Craig says that SBA loans have a history of being slow, cumbersome, and difficult to obtain, but that's only the case when working with an inexperienced lender or a bank that's not equipped to handle the needs of a small business. This misconception persists even as the process has vastly improved, and Craig says that's because of the horror stories and bad experiences that commercial brokers have heard and had in the past. If the right lender is presenting the borrower with information in a timely manner and helping them to understand it, it should barely take more time or effort than dealing with a traditional loan product.

 "Banks have given such a bad name to commercial lending," Craig said. "Once you work with a direct lender, who has that decision power in their hands and doesn't have to go through the bureaucracy and red tape, it can really open your eyes to the fact that it's really not as difficult as you thought it was. A lot of times too, because banks are so risk averse in terms of lending decisions, borrowers assume that they wouldn't be approved, and that's not always the case, either."

Fountainhead Capital is a non-bank direct lender specializing in SBA 504, SBA 7(a) loans, and they also have a conventional product similar to the SBA 504 product. There are only 14 7(a) licenses in the country for non-bank lenders, and Fountainhead holds one of them. Whereas banks are very risk averse, Fountainhead is the opposite; they try to stay on the cutting edge and they move very fast, sometimes issuing an approval in a matter of hours, not days. This is in stark contrast to commercial bank applications, which can sit in the pipeline for weeks even if they've been denied.

Fountainhead is on a growth track, making the 2019 Inc. 5,000 list. They've recently launched a new website and are focusing on direct-to-consumer business and digital advertising, but they also have a "massive" network of partners. The majority of their business comes through referrals and intermediaries, or from borrowers and brokers who have a file that was rejected from a bank. Over time, Craig said, they'd like to have an equal share of direct and broker business, with small business owners and commercial brokers alike seeing the company as a valuable resource.

Rather than looking at borrowers as a bunch of numbers on the page, a lender like Fountainhead can really dig into the borrower's situation in order to understand why their credit score or debts are what they are. Small business owners don't always know the options that are available to them, which means that their back is against the wall when they get into tough situations.

"Small business owners need cash fast, and they assume that the easiest way to get that is to go to one of those funding sources that can do that in 24 hours or less, but the problem is the interest rates on those are just absurd," Craig said. "You're looking at a roughly 5-7% on an SBA loan, and a lot of these small business loans that are provided by some of these other funders, the quick money, you're looking at interest rates being in the 30+ percent range. So, it seems like a good idea because you need the money, but at the same time, if you would've spent a couple extra hours with an actual loan specialist from a quality SBA lender, then you could have probably gotten more money for less for less interest."

Small business owners have a million things to worry about. Financing doesn't have to be one of them.

Small firms may have a new way to offer 401(k) plans to their workers - CNBC

Posted: 30 Sep 2019 06:55 AM PDT

If your employer doesn't offer a retirement plan, a new option might change that.

A federal rule now in effect allows companies to team up through certain employer groups and professional organizations to offer a shared 401(k) plan to their workers. The rule, which aims to expand the use of so-called multiple-employer plans, comes as a similar — but broader — proposal continues to idle in the Senate as part of the Secure Act.

"Both go to the same issue, which is how do we get plans to more workers," said Bradford Campbell, a partner in the Washington, D.C., office of law firm Drinker Biddle and an expert in employer-sponsored retirement plans.

Jason York | Getty Images

The target is the 38 million employees who don't have a workplace retirement plan, according to figures from the Labor Department, which issued the new federal rule in late July. Lack of access is more pointed among small businesses: In 2018, 53% of workers at companies with fewer than 100 workers had access to one, compared with 85% of workers at larger companies.

Small-business owners have cited cost and administrative headaches as reasons they don't offer retirement plans of their own to their workers. The new Labor Department rule aims to reduce those issues by making regulatory changes to allow local or state associations of employers — i.e., chambers of commerce — to sponsor a 401(k) plan that members can offer to their employees. Companies located far apart that want to band together would need to be in the same industry.

In addition to being offered through employer associations, these plans could also be offered through specific firms that handle human resources tasks for their business clients.

The Secure Act, meanwhile, includes a provision to allow companies to join a multiple-employer plan regardless of their membership in a professional organization or their industry. In other words, their only commonality would be their participation in a shared 401(k) plan for their workers. The measure also would allow financial-services firms to offer those expanded multiple employer plans to their business customers, Campbell said.

It's uncertain how many organizations may end up sponsoring a plan under the Labor Department rule.

"I think it has potential value in the marketplace, but it will probably be smaller in scale than the [Secure Act provision] would be," Campbell said.

There has been some interest among state and local chambers of commerce in making retirement plan available under the new rule, said Chantel Sheaks, executive director for retirement policy at the U.S. Chamber of Commerce.

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While the national group wouldn't qualify to offer a retirement plan to members, Sheaks said, it is serving as an educational resource for state and local chambers interested in learning more about offering a retirement plan to its members.

"If you're interested, I'd suggest reaching out to your local chamber to see if they'll sponsor one," Sheaks said.

The Las Vegas Metro Chamber of Commerce is already on the case. The group, which set up a 401(k) plan in advance of the new rule taking effect, is prepared to sign up the 56 employers — representing 2,000 workers — that have expressed interest in "taking it to the next step," said Joe Caldera, a wealth advisor with Las Vegas-based Caldera Wealth Management Group, which will be handling the administration of the plan.

The annual management fee for participants is just under 1% of assets managed. On top of that, participants will pay fees charged by the underlying investments they choose.

Meanwhile, a handful of states have taken steps to address the lack of retirement plans among small businesses as well. Some of those initiatives require employers of a certain size to participate in a state-run retirement option if they don't already offer one to their workers.

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