what is key resources in business plan

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: 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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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.

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.

Join over thousands of organizations that use Creately to brainstorm, plan, analyze, and execute their projects successfully.

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.

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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The Business Model Canvas Explained: Key Partners

No man is an island; the same goes for your business. They are other companies, 3rd parties, and people that you will need to achieve

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

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Business Model Canvas Key Resources

In a Business Model Canvas , the building block associated with Key Resources describes the resources necessary to carry out business activities. Key resources describe any resource the organization requires for its business model to work.

Table of Contents

Understanding key resources in the Business Model Canvas

These resources allow the organization to create a value proposition for consumers, release products to the market, maintain customer segment relationships, and earn revenue. 

Before developing its key resources, the business must consider these other blocks first. In other words, can the available resources meet key operational needs? If there aren’t the means to provide value, then no value exists.

Key resources may be tangible or intangible and represent assets that differ from company to company. In most cases, however, key resources will be defined by materials, equipment, and people. The business may own these resources, lease them out, or acquire them by other means.

Types of key resources

Broadly speaking, key resources can be categorized into four types:

• Physical – or tangible assets such as equipment, manufacturing facilities, distribution networks, inventory , and other buildings. Chip manufacturer Intel relies on semiconductor plants as a key resource.
• Intellectual – or intangible assets such as intellectual property, patents, and partnerships. Knowledge about customers is also a key intellectual resource. While these resources take time and money to develop, they are a major driver of innovation and growth . For example, the brand equity of Microsoft and Adobe has been crafted by years of research and development in software.
• Human – employee-related resources are utilized by organizations in the service, software, finance, science, and technology industries. These resources are important to any organization where creativity and a diverse knowledge pool drives growth . Pharmaceutical giant Novartis is dependent on a team of highly qualified scientists and sales representatives to sell its products to doctors.
• Financial – this includes cash, credit, and stock options for publicly listed companies. While all organizations rely on financial resources to some degree, they are particularly important in the banking and insurance industries. For example, an insurance company with insufficient capital to pay out insurance claims is unlikely to be viable.

How to determine key resources

Businesses requiring assistance with identifying key resources must consider the following questions:

• What key resources does the value proposition require? For example, a company selling sustainable and reliable electric vehicles must have access to the necessary raw materials, patents, and intellectual property concerning battery technology.
• What key activities does the value proposition require? Some businesses choose to work backward from the key activities of their business model . This can be achieved by evaluating the actions of other companies in the same industry.
• What key resources do the marketing and distribution channels require?
• How do key resources support existing revenue streams?

Key takeaways:

• In a Business Model Canvas, the building block associated with Key Resources describes the resources necessary to carry out business activities. The business may own these resources, lease them out, or acquire them by other means.
• Key resources are broadly categorized into four types: physical, intellectual, human, and financial. Resources may be tangible or intangible.
• Key resources can be determined by the business evaluating its value proposition . Some businesses also choose to work backward and determine the activities that will support the value proposition . This can be done by analyzing the actions of companies in the same industry.

Key Highlights

• Key Resources Definition: In the Business Model Canvas, the “Key Resources” building block outlines the resources required for a business to carry out its activities and deliver value to customers. These resources are essential for creating a value proposition , producing and releasing products, maintaining customer relationships, and generating revenue.
• Resource Importance: Key resources are crucial for the business model ’s viability. Without adequate resources to provide value, the entire business model could be compromised.
• Physical Resources: Tangible assets such as equipment, manufacturing facilities, inventory , and distribution networks. For instance, chip manufacturer Intel relies on semiconductor plants as a key physical resource.
• Intellectual Resources: Intangible assets like patents, intellectual property, and partnerships. These resources require investment but drive innovation and growth . Companies like Microsoft and Adobe have built brand equity through years of software research and development.
• Human Resources: Employee-related assets, especially in industries driven by creativity and diverse knowledge, such as technology and science. Companies like Novartis depend on highly qualified scientists and sales representatives.
• Financial Resources: Financial assets like cash, credit, and stock options. These are crucial for viability, especially in industries like banking and insurance where capital adequacy is vital.
• What resources does the value proposition necessitate? For example, an electric vehicle company needs access to raw materials, patents, and battery technology IP.
• What activities support the value proposition ? Some companies work backward by evaluating industry peers’ actions to determine their key resources.
• What resources do marketing and distribution channels require?
• Key Resources in the Business Model Canvas are essential for executing business activities and delivering value.
• Four main types of key resources: physical, intellectual, human, and financial.
• Identification of key resources can be based on value proposition requirements or by analyzing industry peers’ activities.

Alternatives to the Business Model Canvas

Fourweekmba squared triangle business model.

This framework has been thought for any type of business model , be it digital or not. It’s a framework to start mind mapping the key components of your business or how it might look as it grows. Here, as usual, what matters is not the framework itself (let’s prevent to fall trap of the Maslow’s Hammer ), what matters is to have a framework that enables you to hold the key components of your business in your mind, and execute fast to prevent running the business on too many untested assumptions, especially about what customers really want. Any framework that helps us test fast, it’s welcomed in our business strategy .

FourWeekMBA VTDF Framework For Tech Business Models

This framework is well suited for all these cases where technology plays a key role in enhancing the value proposition for the users and customers. In short, when the company you’re building, analyzing, or looking at is a tech or platform business model , the template below is perfect for the job.

Download The VTDF Framework Template Here

FourWeekMBA VBDE Framework For Blockchain Business Models

This framework is well suited to analyze and understand blockchain-based business models. Here, the underlying blockchain protocol , and the token economics behind it play a key role in aligning incentives and also in creating disincentives for the community of developers, individual contributors, entrepreneurs, and investors that enable the whole business model . The blockchain-based model is similar to a platform-based business model , but with an important twist, decentralization should be the key element enabling both decision-making and how incentives are distributed across the network.

Download The VBDE Framework Template Here

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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

How to make a business plan

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

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Key Resources Building Block in Business Model Canvas

Published: 02 January, 2024

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Business Models

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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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Denis Oakley & Co

I HELP BOLD LEADERS TRANSFORM THEIR BUSINESSES AND THE INDUSTRIES THEY COMPETE IN

February 10, 2018 By Denis Oakley

What Are The Key Resources Needed To Deliver The Value Proposition?

Key Resources in the business model canvas are the main inputs and assets the business uses to function effectively. Phrased differently it is what you need. For example,

• Plant and Equipment
• Intellectual Property
• Computer Software
• Expert Knowledge
• Political Connections

The key resources overlap to a certain extent with tangible and intangible assets on the balance sheet. However, it goes much further. In the Business Model Canvas , we only state those resources that make you unique compared to your competitors in the market.

Video of the Key Resources in the Business Model Canvas

Examples of Key Resources

Let’s say you have a fashion outlet. You sell large quantities of overcapacity stock outside the city centre. Your key resources are:

• the cheap location with
• good access and
• contracts with fashion producers.

In my analysis of the Google Business Model I identified Google’s key resources as the:

• the algorithm, and
• its computing power.

Computer power included – hardware, software and the engineers to write the code and configure the software and hardware.

In all three of these cases, the companies have far more resources than they use. The resources that we focus on are the ones that are absolutely critical to the success of the business model. If you don’t have them you are toast.

• Oil Fields – British Petroleum, Exxon
• Car Factories – Ford, Toyota
• Planning Permission – Property companies
• Patents – GlaxoSmithKline, Bayer
• Monopolies – British East India Company
• Customer Data – Google , Facebook

Physical Key Resources 

These are tangible resources. For example, equipment, buildings, machines, transportation or distribution networks. Dell’s distribution network was a Key Resource, enabling them to deliver PC’s at home – years before others did the same.

One example of key resources in the business model canvas is Tesla. Tesla’s business model includes the Giga Factory which produces a significant proportion of the world’s large batteries. This gives Tesla the advantage of economies of scale in cost in its electric car production.

Physical resources are tangible things that you can touch and feel. For a company distributing beer in rural Kenya, the key resources could be:

• the lorry, and
• the reliable supply of petrol.

In contrast, for a logistics company in the UK the key resources could be:

• the route planning software, and
• the warehouse automation system.

Both companies do something similar but the market and the competitive environment mean that what they see as key resources are quite different.

Human Key Resources

Human resources are the people that you need to do the work. People are often how you transform key resources, through activities into the value proposition. In most cases, human resources are either bodies or knowledge.

When I ran a food delivery operation we needed lots of motorcycle delivery riders. We weren’t really concerned about the quality or the skill set of the people. We just needed enough of them who could ride a bike and had insurance. An even starker example would be the West Indies sugar plantations. Slaves were imported from Africa and put to work on plantations. Output was correlated to the number of slaves on the plantation, not to their willingness, strength or knowledge.

In contrast, knowledge is all about particular domain knowledge or relationships. A consulting company’s key resource may be the lead consultant’s knowledge of economics that he has acquired over 30 years and won a Nobel prize for.

Conversely, it could be a different consultant’s Rolodex of all the property developers he has drunk whisky and played golf with over the same time period.

Financial Key Resources

Many businesses need cash for operations or capital projects. If you are going into chip fabrication or jet engine design you need scads of money to invest in the research, development and plant construction.

As a startup going into a new category, for example like Uber , then money becomes a critical key resource as you can use your wall of money in a land grab as you attempt to build market share ahead of competitors.

Intangible Key Resources

It is also important to remember that key resources may be more intangible. A patent that allows you to have a monopoly on producing a drug or which blocks a competitor’s access into a market are also key resources. Trade secrets and know-how are also important.

A good example of a know-how that is a key resource is the Toyota Production System which has enabled Toyota to consistently increase its productivity and quality over decades through process improvement .

Another example is the Audible business model . In this case, some of Audible’s key resources are the network effects that come from the number of audiobooks on its platforms and the sunk costs of many customers with hundreds of books that they have access to.

How to Determine Your Key Resources

There are four key questions that you need to ask

• what key resources does the value propositions require?
• what are the key resources required by our marketing and distribution channels require?
• which key resources are required to deliver our customer relationships? and,
• How do key resources support our revenue streams?

When you do this exercise it is often useful to talk through the customer’s user journey.

For example, if we look at the Rent- the- Runway business model

• the customer goes to the website – we need a website – and,
• chooses a dress – we need a stock of dresses, then
• has it delivered – do we deliver it ourself or get this outsourced
• wear it out for the night, and
• returns it to be drycleaned – another requirement

So from the user journey, we can see that we need

• cleaning and repair

The next step is to ask

How do we deliver all these?

When I build a business model  there are two or three ways of deciding the key resources.

The first is the simplest. I look at what other similar companies are doing and look at their key resources. Then I tailor the current business model to reflect how other companies in the industry work. This is a safe middle of the road approach. It’s not desperately interesting but you have a reliable outcome.

Working backwards from the Key Activities

Alternatively, you work backwards from the key activities in the business model. Here you have worked out what it is that you need to do in order to deliver the value proposition.

Then you work on what you need to have in order to deliver the key activities. You can think of it as building a bridge. You know you have to design the bridge and construct it. What are you going to need to design it? Engineers and Architects. What are you going to need to construct it? Building materials, planning permission, construction equipment and more engineers.

With startups, you can make this very powerful by looking at very different ways of delivering the key activities. For example, in the Apple business model , all the manufacturing is outsourced and Foxconn is a key partner supplying the manufacturing resource .

Starting from the Value Proposition

The final approach is to look at your value proposition and decide what are the resources that you need in order to make it happen. If I wanted to build a search engine for recruiters then the key resources would be a search engine and a large number of CVs. My key activities would then ask how do I get these and make them accessible to recruiters in order to generate revenue.

Playing with Key Resources In the Business Model Canvas

One of the things that I love about the business model canvas is that it makes it easy to open your eyes to more possibilities. The key resources are great for this. As an entrepreneur , you always have a choice of make, rent or buy. This depends on your appetite for risk, expected returns and available cash. It also has a huge impact on your cost structure

If you were designing the Airbnb business model , you could decide to build your own custom website and have everything just the way that you want.

Alternatively, you could pay another company a monthly fee to white label their commercial product, or you could buy an existing room-sharing website and rebrand it.

Airbnb decided that it would make its website. The Uber business model is based on not making or owning its own cars. Instead, it rents them and the drivers.

You can make this decision with all your key resources. In fact, if you don’t make these decisions then you are missing a trick and could make significant improvements to your business as a result.

You can apply this to all your key resources.

These are your Key Resources. Add these to your canvas.

Business Model Innovation

Business model innovation is all about combining all these factors with the other nine segments of the business model canvas and finding potential patterns that match the problem that you are trying to solve. They also have to deliver lots of value to your customers and solve their pain.

Business model design is frequently far harder than many entrepreneurs realise and it is good to have a guide to help bring things together. It is also critical to have a clear idea of how you are going to test your business model . This is so that you can validate it early and save time and money, or pivot whilst you still have a runway .

How to Build a Great Business Model Canvas – The FREE Course

This free course is in 10 lessons – each with a video and accompanying text. It describes how the business model canvas works and how to use it.

• Introduction 
• Value Propositions
• Marketing & Distribution Channels
• Customer Relationships
• Key Resources
• Key Activities
• Key Partners & Suppliers

Are you an Entrepreneur?

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About Denis Oakley

Explorer | Trail Runner | Mountain Lover

'Big' companies are civilisation. I stay in the wilderness guiding entrepreneurs and startups on their journey to becoming 'Big'.

Then I head back to the frontier

Strategy | Marketing | Operations

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I help entrepreneurs transform their industries through wiser choices

Outcome : More Traction, Bigger Rounds, Better Products

Method : Problems, Customers, Business Models, Strategy

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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).

Maskot / Getty Images

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.

Small Business Administration. " Write your business plan ."

Planview. " Resource Planning: How To Build a Resource Plan ."

11 Key Components of a Business Plan

3 min. read

Updated May 10, 2024

Somebody asked me what the key components of a good business plan were, and I’m glad they did—it’s one of my favorite topics.

It gives me a chance to review and revise another of the lists that I’ve done off and on for years (such as the one from yesterday on  common business plan mistakes ).

• 1. Measure a business plan by the decisions it causes

I’ve written about this one in several places. Like everything else in business, business plans have business objectives.

Does the plan accomplish its objective ? Whether it is better management, accountability, setting stepping stones to the future, convincing somebody to invest, or something else?

Realistically, it doesn’t matter whether your business plan is well-written, complete, well-formatted, creative, or intelligent. It only matters that it does the job it’s supposed to do. It’s a bad plan if it doesn’t.

• 2. Concrete specifics

Dates, deadlines, major milestones, task responsibilities, sales forecasts, spending budgets, and cash flow projections.

Ask yourself how executable it is. Ask yourself how you’ll know, on a regular basis, how much progress you’ve made and whether or not you’re on track.

• 3. Cash flow

Cash flow is the single most important concept in business. A business plan without cash flow is a marketing plan, strategic plan, summary, or something else—and those can be useful, but get your vocabulary right.

A business model, lean canvas, pitch deck, and so on can be useful in some contexts, like raising investment. But those aren’t business plans.

• 4. Realistic

While it is true that all business plans are wrong , assumptions, drivers, deadlines, milestones, and other such details should be realistic, not crazy.

The plan is to be executed. Impossible goals and crazy forecasts make the whole thing a waste of time.

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• 5. Short, sweet, easy-to-read summaries of strategy and tactics

Not all business plans need a lot of text.

The text and explanations are for outsiders, such as investors and bankers; however, many companies ought to use business planning to improve their business operations. If you don’t need the extra information, leave it out.

Define strategy and tactics in short bullet point lists. Tactics, by the way, are related to the marketing plan, product plan, financial plan, and so on. Strategy without tactics is just fluff.

• 6. Alignment of strategy and tactics

It’s surprising how often they don’t match.

Strategy is focus, key target markets , key product/service features, important differentiators, and so forth. Tactics are things like pricing, social media, channels, and financials, and the two should match.

A gourmet restaurant (strategy) should not have a drive-through option (tactics.)

• 7. Covers the event-specific, objective-specific bases

A lot of components of a business plan depend on the usage.

Internal plans have no need for descriptions of company teams. Market analysis hits one level for an internal plan but often has to be proof of market or validation for a plan associated with investment. Investment plans need to know something about exits; internal plans don’t.

• 8. Easy in, easy out

Don’t make anybody work to find what information is where in the plan. Keep it simple.

Use bullets as much as possible, and be careful with naked bullets for people who don’t really know the background. Don’t show off.

• 9. As lean as possible

Just big enough to do the job . It has to be reviewed and revised regularly to be useful. Nothing should be included that isn’t going to be used.

• 10. Geared for change

A good business plan is the opposite of written in stone. It’s going to change in a few weeks.

List assumptions because reviewing assumptions is the best way to determine when to change the plan and when to stick with it.

• 11. The right level of aggregation and summary

It’s not accounting. It’s planning.

Projections look like accounting statements, but they aren’t. They are summarized. They aren’t built on elaborate financial models. They are just detailed enough to generate good information.

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

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

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The Business Planning Process: 6 Steps To Creating a New Plan

In this article, we will define and explain the basic business planning process to help your business move in the right direction.

What is Business Planning?

Business planning is the process whereby an organization’s leaders figure out the best roadmap for growth and document their plan for success.

The business planning process includes diagnosing the company’s internal strengths and weaknesses, improving its efficiency, working out how it will compete against rival firms in the future, and setting milestones for progress so they can be measured.

The process includes writing a new business plan. What is a business plan? It is a written document that provides an outline and resources needed to achieve success. Whether you are writing your plan from scratch, from a simple business plan template , or working with an experienced business plan consultant or writer, business planning for startups, small businesses, and existing companies is the same.

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The Better Business Planning Process

The business plan process includes 6 steps as follows:

• Do Your Research
• Calculate Your Financial Forecast
• Draft Your Plan
• Revise & Proofread
• Nail the Business Plan Presentation

We’ve provided more detail for each of these key business plan steps below.

1. Do Your Research

Conduct detailed research into the industry, target market, existing customer base,  competitors, and costs of the business begins the process. Consider each new step a new project that requires project planning and execution. You may ask yourself the following questions:

• What are your business goals?
• What is the current state of your business?
• What are the current industry trends?
• What is your competition doing?

There are a variety of resources needed, ranging from databases and articles to direct interviews with other entrepreneurs, potential customers, or industry experts. The information gathered during this process should be documented and organized carefully, including the source as there is a need to cite sources within your business plan.

You may also want to complete a SWOT Analysis for your own business to identify your strengths, weaknesses, opportunities, and potential risks as this will help you develop your strategies to highlight your competitive advantage.

2. Strategize

Now, you will use the research to determine the best strategy for your business. You may choose to develop new strategies or refine existing strategies that have demonstrated success in the industry. Pulling the best practices of the industry provides a foundation, but then you should expand on the different activities that focus on your competitive advantage.

This step of the planning process may include formulating a vision for the company’s future, which can be done by conducting intensive customer interviews and understanding their motivations for purchasing goods and services of interest. Dig deeper into decisions on an appropriate marketing plan, operational processes to execute your plan, and human resources required for the first five years of the company’s life.

3. Calculate Your Financial Forecast

All of the activities you choose for your strategy come at some cost and, hopefully, lead to some revenues. Sketch out the financial situation by looking at whether you can expect revenues to cover all costs and leave room for profit in the long run.

Begin to insert your financial assumptions and startup costs into a financial model which can produce a first-year cash flow statement for you, giving you the best sense of the cash you will need on hand to fund your early operations.

A full set of financial statements provides the details about the company’s operations and performance, including its expenses and profits by accounting period (quarterly or year-to-date). Financial statements also provide a snapshot of the company’s current financial position, including its assets and liabilities.

This is one of the most valued aspects of any business plan as it provides a straightforward summary of what a company does with its money, or how it grows from initial investment to become profitable.

4. Draft Your Plan

With financials more or less settled and a strategy decided, it is time to draft through the narrative of each component of your business plan . With the background work you have completed, the drafting itself should be a relatively painless process.

If you have trouble writing convincing prose, this is a time to seek the help of an experienced business plan writer who can put together the plan from this point.

5. Revise & Proofread

Revisit the entire plan to look for any ideas or wording that may be confusing, redundant, or irrelevant to the points you are making within the plan. You may want to work with other management team members in your business who are familiar with the company’s operations or marketing plan in order to fine-tune the plan.

Finally, proofread thoroughly for spelling, grammar, and formatting, enlisting the help of others to act as additional sets of eyes. You may begin to experience burnout from working on the plan for so long and have a need to set it aside for a bit to look at it again with fresh eyes.

6. Nail the Business Plan Presentation

The presentation of the business plan should succinctly highlight the key points outlined above and include additional material that would be helpful to potential investors such as financial information, resumes of key employees, or samples of marketing materials. It can also be beneficial to provide a report on past sales or financial performance and what the business has done to bring it back into positive territory.

Business Planning Process Conclusion

Every entrepreneur dreams of the day their business becomes wildly successful.

But what does that really mean? How do you know whether your idea is worth pursuing?

And how do you stay motivated when things are not going as planned? The answers to these questions can be found in your business plan. This document helps entrepreneurs make better decisions and avoid common pitfalls along the way. ​

Business plans are dynamic documents that can be revised and presented to different audiences throughout the course of a company’s life. For example, a business may have one plan for its initial investment proposal, another which focuses more on milestones and objectives for the first several years in existence, and yet one more which is used specifically when raising funds.

Business plans are a critical first step for any company looking to attract investors or receive grant money, as they allow a new organization to better convey its potential and business goals to those able to provide financial resources.

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Honda News Alerts

Included divisions.

• Honda Corporate
• Honda Autos
• Honda Racing
• Honda PowerSports
• Honda Power Equipment
• Honda Engines
• Honda Marine
• Electrification
• American Honda Collection Hall
• Most recently published results first (Latest First)
• Most recently published results last (Oldest First)
• Most relevant results first (Relevance)

Summary of 2024 Honda Business Briefing on Direction of Electrification Initiatives and Investment Strategy

• Approach to electrification targets: Honda has not changed its belief that EVs are the most effective solution in the area of small mobility products such as motorcycles and automobiles, and Honda's electrification target to make EVs and FCEVs represent 100% of its global vehicle sales by 2040 remains unchanged. Honda must look ahead to the period of EV popularization and build a strong EV brand and a strong EV business foundation from a medium- to long-term perspective. 
• Structural reform of procurement and production operations: Through the establishment of a vertically-integrated EV value chain with a central focus on batteries, as of 2030, Honda will reduce the cost of the battery to be procured in North America by more than 20% compared to the cost of current batteries . Honda will establish a competitive business structure with an aim to reduce overall production cost by approximately 35% . Honda already has a positive outlook to secure enough batteries for the planned production of approximately 2 million EVs per year.
• EV lineup strategy: For the Honda 0 Series, a global EV series which will be the flagship series of Honda EVs, a total of seven models will be launched globally by 2030 including various models ranging from small to large size. As a part of electrification with the use of Honda Mobile Power Pack e: (MPP), Honda will introduce a micro-mobility product which will be equipped with 4 MPPs in Japan before the end of FY2026, enhancing the applications of MPPs.
• Financial strategy: Honda is planning to invest approximately 10 trillion yen in resources over the 10-year period through 2030, when the period of full-fledged popularization of EVs is expected to start. Honda will pursue both bold investments for future growth and shareholder returns.

Honda Motor Co., Ltd. Director, President and Representative Executive Officer (Global CEO) Toshihiro Mibe today held a press briefing on Honda initiatives centering on automobile electrification.

Following is a summary of his formal remarks:

1. Honda approach to electrification and initiatives toward achieving its targets: The environment surrounding automobile electrification is undergoing dramatic changes, and in some regions, the sense of a slowdown in EV market growth is gaining attention. There are various approaches toward Honda's 2050 goal of carbon neutrality. For example, to achieve "zero environmental impact" in powering large mobility products such as aircraft and large watercraft, the use of SAF *1   and e-fuel is being viewed as a high potential solution, from the perspective of range.

On the other hand, Honda has not changed its belief that EVs are the most effective solution in the area of small mobility products such as motorcycles and automobiles. Looking at the trend from a longer-term perspective, Honda is confident that the EV shift will continue to proceed steadily. Without getting too caught up in the current changes in the situation, Honda must look ahead to the period of EV popularization, which will begin in the second half of the 2020s and build a strong EV brand and a strong EV business from a medium- to long-term perspective.

As of 2030, Honda plans to make EVs and FCEVs represent 40% of its global auto sales, and to produce more than 2 million units of EVs. Working toward this future, Honda will steadily pursue the following three initiatives, while making investment decisions at the right timing:

• Introduction of attractive EVs only Honda can offer
• Establishment of a comprehensive EV value chain with a central focus on batteries 
• Advancement of EV production technologies and facilities

Through these initiatives, Honda is aiming to achieve a return on sales (ROS) of 5% for its EV business as of 2030 to further increase its profit margin to make its BEV business self-sustaining.

1-1. Introduction of attractive EVs only Honda can offer The Honda 0 Series, which will play a key role in the Honda EV strategy, will be a completely new EV series Honda will create from "zero" with a new EV development approach of "Thin, Light, and Wise." In January of this year, at CES, two concept models were unveiled, namely Saloon and Space-Hub. As for Saloon, which will become a flagship model of the series, Honda is planning for the market launch of a model very similar to this concept model, in 2026.

• With the adoption of a new dedicated platform for mid- to large-size EVs and a further advanced power unit, a package featuring unprecedented styling with a low vehicle height and a short overhang will be realized. 
• With the adoption of a newly-developed compact e-Axle and the world's top-class ultra-thin battery pack, the motor room and floor will be made thin. Moreover, both the low vehicle height styling and a spacious and comfortable interior space will be achieved through the application of technologies Honda has amassed through our long history of car making. This includes optimization of the parts layout, reduction of the number of parts, as well as adoption of Honda's original collision control technology, and the adoption of body frames that combine excellent design and performance.
• Furthermore, the cabin will be designed to realize more comfort and more fun of driving, featuring an intuitive user interface and exhilarating visibility.
• In addition to lighter body frames, the new EV series models will adopt an all-new power unit, which was made lighter and thinner by applying Honda's original technologies amassed through the development of F1 machines and HEV models. This will enable Honda to reduce the overall vehicle weight by approximately 100kg (220 pounds) compared to initial Honda EVs.
• Heavy components such as the battery and power unit will be placed low and in the center of the vehicle body to realize a low center of gravity, resulting in stable vehicle behavior and a nimble and sporty driving performance.
• As a technology to realize vehicle control at the will of the driver, a further advancement was achieved for the motion management system developed based on posture control technology that Honda has amassed through the development of its original robotics technologies.  
• By combining the highly efficient power unit and excellent aerodynamic technology Honda has amassed through motorsports activities, the new EV series models will achieve both a sporty driving experience unique to Honda and the world's top class electricity efficiency performance. With that, Honda will strive to realize sufficient range of more than 300 miles (480 km) *2 for each of the Honda 0 Series models.
• Honda will independently develop the underlying E&E architecture, the vehicle OS which is the upper layer of the overall architecture, as well as various applications that will be on the vehicle OS. Honda will apply original customization to the SoC (system-on-chip) semiconductors which will be installed in Honda 0 Series models. For example, such customized SoC will feature AI, which is essential for the advancement of automation and intelligence, yet helps lower power consumption.
• The EV models we will introduce in the second half of the 2020s will continuously advance in a way that they will possess intelligence to be more attentive to the preferences and needs of each individual customer.
• The Honda 0 Series models which will be introduced in the second half of the 2020s will adopt a centralized architecture, which will consolidate multiple ECUs which are serving individual functions to control the vehicle's systems, to a core ECU and serve as a single "brain" for the entire vehicle. This will align each and every function and make it possible to speedily offer new and inspiring experiences never before possible. With that, Honda EV models will continuously advance in a way that they will possess intelligence to be more attentive to the preferences and needs of each individual customer.
• As for AD/ADAS (automated driving and advanced driver assistance systems), Honda is aiming to offer a seamless mobility experience, not only inside the vehicle but the entire process from the moment the customer enters the vehicle until they exit the vehicle. To this end, the AD/ADAS will be advanced to be more in tune with human sensibilities by adopting further advanced sensing technologies and intelligence technologies including AI. As for driver-assistive technologies, the Level 3 automated driving technology, which Honda put into practical use ahead of other companies around the world, will be utilized to make automated driving functions available in a broader speed range on expressways, as well as on regular roads. Moreover, by providing customers with consistent support for their entire mobility experience, including pickup arrangement and parking of the vehicle at places away from home, Honda will realize "the joy and freedom of mobility" with less stress to our customers.

1-2. Establishment of a comprehensive EV value chain with a central focus on batteries To secure high competitiveness from a long-term perspective, Honda will strive to build value chains in stages with a central focus on batteries, which are core components of EVs and determine the competitiveness of EVs.

• The early days of EVs:the first half of the 2020s Honda will stably procure necessary volume of batteries while holding down the cost by strengthening external partnerships for the liquid lithium-ion batteries in each respective region.  
• The transitional period for EVs: in the mid-2020s Honda will begin battery production with its JV partners. In the U.S., in 2025, the joint venture EV battery plant with LG Energy Solution will begin production with a capacity of 40GWh of batteries per year. By building a solid value chain with its partner, which will have the largest scale in North America, Honda will realize a competitive battery cost. Moreover, the lightweight and compact battery packs, which will be produced with Honda's high-density packaging technologies, will be installed in the Honda 0 Series models and contribute to enhance the product value of those models. In addition to EV production, Honda will expand the scope of its business into the battery life cycle business, which includes the areas of charging service, energy service and reuse/recycle. Honda will build a stable business foundation by expanding the areas of battery business Honda will do in-house.
• The popularization period for EVs: in the second half of the 2020s Honda will further expand its scope of battery business and strive to build a vertically-integrated and comprehensive EV value chain with a central focus on batteries, that includes all aspects of EV production, from procurement of raw materials mainly for batteries, through production of finished EVs, as well as battery reuse and recycling. In Canada, Honda will begin in-house production of the EV battery being co-developed with GS Yuasa. As for key battery materials, in Canada, Honda will proceed to internalize production by producing cathode materials with POSCO Future M, and separators with Asahi Kasei, at our respective new joint venture plants to be constructed. Moreover, Honda is aiming to build a comprehensive value chain with an eye toward secondary use and the recycling of EV batteries. With that, in addition to optimizing battery prices and achieving a stable supply, Honda will ensure the competitiveness of its entire value chain, including the upstream and downstream areas of EV battery business. With these initiatives, in 2030, Honda will reduce the cost of the battery to be procured in North America by more than 20% compared to the cost of current batteries. As for batteries necessary for the production of approximately 2 million units of EVs planned for 2030, we already have a positive outlook to secure enough batteries.

1-3.   Advancement of EV production technologies and facilities The period of transition from ICE to EV leading up to the mid-2020s will be a phase in which Honda will respond flexibly to changes in demand and the business environment while also ensuring profitability. During this phase, our existing production facilities will be fully utilized to produce both ICE and EV models on the same line. In addition, Honda will advance its production operations by steadily incorporating advanced technologies necessary to realize the "Thin, Light and Wise" concept. This will lead to the establishment of a highly efficient production structure at dedicated EV plants in the future.

As for the production line of the thin battery pack, which will be the key to EV production, the new battery case production line to be installed at our Anna Plant in Ohio will be equipped with mega casting machines, which are 6,000-ton class high-pressure die-casting machines. This will greatly reduce the total number of parts consisting of the battery case and secondary parts from over 60 to 5 parts. Also, combined with the technology of friction stir welding (FSW), investment will be reduced and production efficiency will be increased at the same time.

Honda became the first company in Japan *3 to install a 6,000-ton class mega casting machine to its production technology R&D facility located in Tochigi, Japan, currently being verified for mass production.

Including application to the production of large cast aluminum body frame parts in the future, the die-casting technology will be continuously advanced.

As for the battery pack assembly line, Honda's original "Flex Cell Production System," will be adopted. This system combines 1) the modular parts configuration according to the product function of the vehicle and 2) the "cell production system" that brings together in a single area the equipment, jigs, and production associates required for each production process. The adoption of the Flex Cell Production System ahead of the start of full-capacity EV production will enable flexible responses to changes in production models and fluctuations in production volume. In addition, by utilizing the Digital Twin , which reproduces real-life production line conditions in cyberspace in real time, the production efficiency in various aspects including the supply of parts to factories, production volume and speed will be optimized. In this way, Honda will supply products in a timely manner in accordance with market needs. In the future, Honda plans to further expand the scope of applications of these technologies beyond the battery pack production line, and apply them to all lines at Honda EV production facilities.

Ultimately, the culmination of these initiatives will be demonstrated at the dedicated EV plant which will become operational in 2028 in Canada. By achieving the world's top-level production efficiency, including a significant increase in capacity utilization rates and a reduction of fixed costs, Honda aims to reduce overall production cost by approximately 35% compared to conventional mixed-flow production lines.

2. Advancement of overall operation with real-time data linkage In addition to the initiatives in the areas of product, procurement and productions, Honda will further advance all of our automobile business operations, everything from planning to after-sales services, by linking them with software. By utilizing data obtained from Honda's original software-defined mobility products, it becomes possible to offer products and experience-based value more closely tailored to each individual customer in all situations, and with greater speed. For example, data on the latest market trends and customer preferences obtained "at the spot" of sales will be fed back to our product development and production teams on a real time basis, enabling the fastest possible delivery of products optimized to fulfill the needs of our customers and market. In addition, real-time vehicle data obtained through the connected function will be linked to Honda service operations, enabling Honda to formulate and propose an optimal service menu for customers on a real-time basis through the dedicated Honda app.

Going beyond these examples, by constantly linking the entire value chain with the latest data, Honda will build a system that enables quick and flexible responses to rapid changes in the EV market.

3. EV lineup strategy Preparing for the start of the EV popularization period in 2030, Honda will strategically launch EV models globally, mainly with Honda 0 Series models. Moreover, as for hybrid-electric models, for which demand is strong in the current market, Honda will further advance performance and enhance the lineup globally.

The following is the outline of new model introduction plans,

<EVs>

• Honda 0 Series -  global EV series The Honda 0 Series models will be first introduced in North America in 2026, then rolled out globally. Including various models ranging from small to large size, a total of seven models will be launched globally by 2030.
• EV lineup in China Honda will introduce a total of 10 Honda-brand EV models by 2027 and make EVs represent 100% of our automobile sales in China by 2035. Honda unveiled the "Ye Series," a new EV series which will follow the e:N Series currently available, continuing to enhance its EV lineup in China.  
• Small-size EV lineup        Starting with the N-VAN e:, a commercial-use mini-EV that will go on sale in Japan this fall, Honda will make sequential introductions of small-size EVs in regions where there is a need for them. This also will include introduction of personal-use mini-EV models in 2025 as well as small EVs that emphasize the "joy of driving," in 2026.

< Electrification with the use of Honda Mobile Power Pack>

• In 2024: Introduction of electric motorcycle models which will be powered by two MPPs
• In FY2026 (fiscal year ending March 31, 2026): Introduction of a micro-mobility product which will be equipped with 4 MPPs in Japan

<Advancement of HEV models>

• Honda's original two-motor hybrid-electric system, namely e:HEV system, as well as the HEV platforms will be renewed. After the renewal, the e:HEV system will be lighter and more efficient, and the platforms will also be more efficient and shared by more models, achieving both further improved fuel economy and a high-quality, exhilarating driving experience.
• Honda will repurpose its EV development technologies to hybrid-electric models and adopt an electric all-wheel drive (e-AWD) system that leverages the motor installed in EV models. Compared to the conventional mechanical all-wheel drive system, the e-AWD system will increase maximum driving force output and enable more responsive and precise control on drive force distribution. Moreover, by applying cooperative control along with the Motion Management System, the e-AWD system will realize excellent driving performance while stabilizing vehicle behaviors, leading to the realization of both peace of mind and the fun of driving for the customers.

Honda will offer its further advanced hybrid models to a large number of customers around the world. At the same time, the structure of our ICE business, which includes hybrid-electric models, will be further strengthened to ensure steady earnings. Then, the funds generated by ICE business will be invested into EV and other new businesses.

4. Financial strategy – Securing resources to invest/Capital allocation For Honda to realize its electrification strategy, it will be essential to make investments strategically at the right timing. Therefore, Honda is planning to invest approximately 10 trillion yen in resources over the 10-year period through 2030, when the period of full-fledged popularization of EVs is expected to start.

The breakdowns of the 10-trillion-yen investment are as follows:

• Approximately 2 trillion yen for R&D expenditure toward the realization of software-defined mobility
• Approximately 2 trillion yen for the investments and capital contributions related to the establishment of comprehensive EV value chains in key markets such as the U.S., Canada and Japan
• The area of production that includes the construction of dedicated next-generation EV production plants
• Electrification of motorcycles
• Development of new EV models
• Investment in fabrication of dies

While carefully assessing the level of EV popularization in the market, Honda will flexibly make investment decisions at the appropriate timing. 

The cash Honda generates will be allocated for 1) the investment of resources to ensure our future growth and 2) the return to shareholders. Plans for company-wide capital allocation are outlined below.

• From 2021 to 2025 (a phase to strengthen ICE product business and invest resources to EV business) Honda will generate 12 trillion yen in operating cash flow by strengthening its motorcycle and ICE/HEV businesses . Such cash will be allocated among EV business, ICE/HEV business and investment in new areas, while at the same for stable and continuous dividend payments.  As Honda has been proceeding with the plan to buyback 780-billion-yen worth of our own shares over the four-year period from FY2022 through FY2025 to achieve the PBR (price-to-book ratio) of above 1 as early as possible, capital efficiency will be improved, including optimization of the amount of equity capital accumulated from the past.
• From 2026 to 2030 (a phase of full-fledged business conversion from ICE to EV) Honda will strive to earn the same level of cash as the 2021-2025 period by raising operating cash flow through increasing unit sales of motorcycles mostly in newly emerging countries and further improving the business structure of ICE/HEV business. On top of that, Honda will improve profitability of its EV business with an aim toward 5% ROS and increase EV unit sales to add more operating cash flow. Both combined, Honda will strive to generate more cash than that of the 2021-2025 period. As for resource allocation, Honda will further accelerate its investment of resources in the areas of electrification and software to ensure the growth of our EV business. At the same time, Honda will continue making stable and continuous dividend payments and expeditious share buybacks for shareholder returns. As for dividends, Honda is planning to pay more than 1.3 trillion yen for the FY2022-2026 period and more than 1.6 trillion yen for the FY2027 -2031 period. These dividend payment amounts indicate our intention to make stable and continuous dividend payments without reducing the dividend per share, even if short-term profits fluctuate as a result of on-going up-front investments which will be necessary during the transformation period. Honda will maximize cash generation from the earnings base built up to date as well as from the new growth areas. In doing so, both bold investments for future growth and solid shareholder returns will be pursued.

*1 SAF: sustainable aviation fuels *2 A range measured based on the standards set by the EPA (the U.S. Environmental Protection Agency) *3 Honda internal research

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FinOps X 19-22 June 2024

AWS Updates Savings Plans, Compute Optimizer, and Tagging

April 25, 2024

Key Insight: In March, AWS delivered four updates that help FinOps Practitioners tackle their top two key priorities this year , namely reducing waste or unused resources and managing commitment discounts . The recommended approach is to address both usage and rate optimization in tandem, and the FinOps Framework Domains have been updated to reflect that approach.

At the beginning of every year, the FinOps Foundation delivers the results of their annual survey, the State of FinOps . This year’s survey found that priorities have shifted for practitioners. In March shortly after the survey results came out, Amazon Web Services (AWS) announced several new features that help FinOps Practitioners tackle their top two key priorities this year , namely reducing waste or unused resources and managing commitment discounts .

New 7-day return window for AWS Savings Plans

On March 20, 2024, AWS began offering the ability to return or repurchase Savings Plans within 7 days of purchase. The announcement was brief, but we dug into the details with Rick Ochs , Cloud Optimization Product Manager at AWS, so you can be prepared to take advantage of this capability.

In order to be eligible for return or repurchase, the Savings Plans must have an hourly commitment of $100 or less, have been purchased in the past 7 days and in the same calendar month, with up to a maximum of 10 returns per calendar year per management account. This action can be performed programmatically with an API, or via the console.

Knowing that a Savings Plan can be returned, for example if a purchase made for expected cloud usage is not aligned with the observed usage, takes the stress out of clicking the “buy” button and lowers the risk that FinOps Practitioners take when making commitments to cloud providers for Rate Optimization . A little flexibility goes a long way for Practitioners when it comes to managing commitment discounts.

FinOps Landscape

In addition to a 7-day return window for Savings Plans from AWS, these commitment discounts from Cloud Service Providers (CSPs) also offer flexibility with commitment discounts:

• AWS Reserved Instances: sell on RI marketplace , modify , or exchange Convertible RIs
• Microsoft Azure Reservations: exchange or refund Reservations , or trade Reservations for Savings Plans
• Google Cloud Committed Use Discounts: merge and split commitments

AWS, Microsoft, and Google all offer native discount management tools, and numerous Independent Software Vendors (ISVs) support multi-cloud commitment discount management:

• Apptio Cloudability
• Spot by NetApp
• Tanzu CloudHealth

See the FinOps Landscape for more FinOps platforms and services with support for managing commitment based discounts .

FinOps teams can use FinOps Landscape and its various filters to find solutions that meet their unique needs.

AWS Compute Optimizer supports new instance types and customizability for rightsizing recommendations

At the end of March, AWS announced two updates for AWS Compute Optimizer :

• Support for 51 additional Amazon Elastic Compute Cloud (Amazon EC2) instance types
• Customizable Amazon EC2 rightsizing recommendations based on memory utilization

Both of these improvements to AWS Compute Optimizer help FinOps teams reduce waste or unused resources, which is their top key priority for 2024 . As new compute resources come out from CSPs, their native management tooling, as well as ISV tooling, must be updated to support those new resources. This enables FinOps Practitioners to recommend more efficient infrastructure and keep the environment modernized. More efficient resource usage translates to reduced waste.

The ability to customize Amazon EC2 rightsizing recommendations based on memory utilization is a critical improvement for organizations who want to be able to act on those recommendations. With memory customizability, users can set desired memory usage and trust that the recommendations meet their usage needs. Engineers can implement them with less scrutiny over each individual recommendation, easing Workload Optimization .

Rightsizing recommendations are very important for efficient cloud usage. When first developing a workload, it’s often difficult to know how much computing power it will need, so overprovisioning is common. In addition to cloud native recommendations, many third-party cloud management tools offer rightsizing recommendations. But customizability and tunability is very important to make these recommendations useful.

In addition to AWS’s customizable rightsizing recommendations, here are a few ISVs that offer the ability to tune/adjust the capacity inputs to rightsizing recommendations.

See the FinOps Landscape for more FinOps platforms and services with support for resource utilization & efficiency .

Retroactively apply AWS Cost Allocation Tags

AWS rounded out the month with another update : the ability to tag resources retroactively for up to 12 months. As long as customers have added tags to a resource in the past, you can activate (or deactivate) cost allocation tags by submitting a backfill request.

For many, proper tagging is the foundation for performing FinOps Capabilities . This update helps teams organize their resources so they can understand their usage and cost , optimize it , and deliver business value . It underpins their ability to reduce waste and manage commitment discounts optimally. Retroactive application is especially helpful in cases where tags may not have been applied when resources were provisioned, or if business units merge, or another company is acquired and must be merged into your environment.

In addition to AWS, these cloud service providers offer native tag management:

• Google Cloud: updating existing tags
• Microsoft Azure: edit tags
• Oracle Cloud: add, update, remove tags

Here are a few examples of FinOps tools with built-in tag managers:

• SoftwareOne

Optimize usage and rates in tandem

These four updates from AWS support both usage optimization and rate optimization. Some teams are unsure if they should tackle usage or rate optimization first, but Rick recommends doing both in tandem . The community agrees with this approach, and to reflect that thinking, the FinOps Foundation recently updated its Framework Domains to unify Cloud Usage Optimization and Cloud Rate Optimization under a single Domain: Optimize Cloud Usage & Cost .

J.R. Storment

FinOps Foundation

Amazon Web Services

Amber Gregorio

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Medium-term business plan 2024-2026

Visual Summary

ECA’s mission is to deliver ideas and actions for an empowered, prosperous, and transformed Africa, informed by the 2030 Agenda and Agenda 2063. ECA’s dual role as a regional arm of the United Nations and a key component of the institutional landscape in Africa positions it to effectively address the continent’s development challenges support Africa’s agency and advance achievement of the 2030 Agenda and Agenda 2063 targets. ECA provides a strategic link between global guidance and policy and country-level action and provides multistakeholder and intergovernmental platforms for substantive and multidisciplinary debates on the SDGs and their implementation. ECA also offers unique integrated platforms that provide visibility to cross-border and transboundary issues, mobilizing other region-based entities such as the African Union and its regional economic communities for accelerated action to achieve the 2030 Agenda and Agenda 2063 targets. This Medium-Term Business Plan for 2024–2026 describes our strategic orientation and explains how we plan to respond to this call over the next three years. Our work aims to support the emergence of Africa as a global solutions powerhouse for energy transitions, climate action and investment for sustainable development and shared prosperity for all. ECA will deliver strategic policy options and initiatives to promote Africa’s transformation and rescue the SDGs by creating a school of thought and practice around four strategic focus areas: macroeconomic and social policy and development financing for sustainable transitions; sustainable industrialization and economic diversification through regional integration; infrastructure with a particular focus on technology, connectivity and energy; and climate resilience, green transition and food security. We will engage in these efforts in ways that strengthens Africa’s agency and leadership for transformation.

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• Reproductive Health in the Workplace
• Examples of Jobs and Reproductive Health
• About Exposures and Reproductive Health

How Employers Can Reduce Workplace Reproductive Hazards

• Employers can help keep workers and their families safe by taking steps to protect them from reproductive hazards.
• Reproductive hazards can impact the hormones, sexual function, fertility, and pregnancies of workers.

Healthy is good for business

Healthy workers are more productive than sick workers. Showing your workers that you care can improve morale and employee retention. Improving safety and health at your workplace can also save your company money.

Research shows that successful safety and health systems reduce the costs of injury and illness, with a high return on investment.

All workers are impacted

Regardless of sex or stage of reproduction, all workers can be affected by reproductive hazards. Workers can also carry chemicals home on the skin, hair, clothes, and shoes. Some of these can harm other people in their households.

Many chemicals in the workplace have not been tested to see if they can cause reproductive problems. Laws for workplace safety and health are intended to protect average workers. They do not always protect workers' reproductive health and the health of their families.

Pregnant and breastfeeding workers

Although most employees are able to safely perform their jobs throughout pregnancy, worker safety can sometimes be different for pregnant workers.

Current occupational exposure limits were set based on studies performed in non-pregnant adults. There are many reasons these limits might not protect a pregnant person or fetus.

Pregnancy can cause some chemicals, like some metals, to be absorbed into the bloodstream more easily. As their body changes, a pregnant worker may find that personal protective equipment (like some respirator types) no longer fits correctly.

Changes in pregnant workers' immune system, lung capacity, and even ligaments can alter their risk for injury or illness.

Some chemical exposures are riskier for an unborn baby than an adult, due to its rapid development and smaller relative size. For most chemicals, we don't have good information on what levels of exposure might harm a fetus.

If an employee is breastfeeding, think about what exposures can get into breast milk. Encourage your employees to talk to their doctors about their workplace exposures. Keep in mind that hazards can be different for someone who is breastfeeding or pregnant.

How you can keep your workers healthy and safe

Identify hazards in your workplace.

Some workplace hazards are obvious, like machinery that can cause injury or chemicals that can be poisonous. Other hazards include stress, working long hours, working night shifts, standing or sitting for long periods of time, and noise. Once you have identified the hazards in your workplace, you can start thinking of ways to make your workplace safer.

• Checking your workplace to make sure there are no serious hazards
• Training your employees in safe work practices
• Providing employees with needed equipment and safety gear
• Understanding your responsibilities as an employer

Make a plan

Think about what jobs in your company could be hazardous to reproductive health and share this information with employees. Offer them options to avoid tasks involving reproductive hazards while they are trying to conceive, pregnant, or breastfeeding. If an employee cannot completely avoid a reproductive hazard on the job, try to reduce it where possible.

Learn about your responsibilities towards pregnant and breastfeeding workers, including:

• The Pregnant Workers Fairness Act
• The Fair Labor Standard Act and PUMP Act

Create a smoke-free workplace

Secondhand smoke can harm reproductive health and fertility in both men and women. Secondhand smoke also can harm a fetus if a pregnant person regularly breathes it.

Request a Health Hazard Evaluation

If you want to make your workplace safer but don't know where to start, NIOSH can help. The Health Hazard Evaluation Program helps employees, unions, and employers learn whether health hazards are present at their workplace and recommends ways to reduce hazards and prevent work-related illness. Evaluations are done at no cost to the employees, unions, or employers.

Information on specific workplace reproductive hazards

Learn more about the potential reproductive health hazards in your workplace:

• Examples of jobs and associated reproductive hazards
• Preventing exposure to specific reproductive health hazards

Supporting Nursing Moms at Work: Employer Solutions . Office on Women's Health.

Occupational Exposures and Reproductive Health: Grajewski B, Coble J, Frazier L, McDiarmid M. Birth Defects Res B Dev Reprod Toxicol 2005;74:157-163.

National Institute for Occupational Safety and Health (NIOSH)

The Occupational Safety and Health Act of 1970 established NIOSH as a research agency focused on the study of worker safety and health, and empowering employers and workers to create safe and healthy workplaces.

Reproductive Health and The Workplace