Whether you are identifying key resources as a part of a Business Model Canvas or simply trying to understand the things that make your value proposition successful, getting a sense of clarity about your company’s available resources allows you to scale, value, and utilize them as needed.
Think of Key Resources as Things
Simply put, your business’ key resources will either solve or cause problems during the daily operation of the company. Losing track of these key resources can cause your business to encounter previously unforeseen road bumps or lose a significant amount of capital. Knowing the names behind the foundational resources your business depends on will help you to monitor trends as you use and remove them over time.
Business Model Canvas: Types of Resources
A great way to think about the resources and assets your business depends on is to split them into four broad types.
Physical Business Resources
If inventory doesn’t come in, what would happen to your business? If a piece of equipment fails, how would that impact the business? Be aware of the physical dependencies of your company and their most vital components. Inventory, components, materials, buildings, computers, point-of-sale systems, machines, equipment, and distribution channels are all examples of things in this category.
A comprehensive list of physical resources can help you to plan for future emergencies, such as gathering the names of repair companies, find alternate equipment sources, and locating insurances. If possible, consider borrowing another company’s equipment while yours is being repaired. Businesses such as wineries have strong sharing relationships with their equipment in the case of emergencies.
Intellectual Property Resources
More than anything, your company depends on specialized, authoritative knowledge to maintain competition with other businesses. This knowledge can take many different forms. Product manufacturing, software algorithms, and even product designs are all valuable resources to factor into your Business Model Canvas. Extensive measures should be taken to ensure the business owns the rights to said knowledge. Filing for copyrights, trademarks, and patents is one way to do this.
Other valuable knowledge assets may be less obvious, but still just as important to your business. Customer lists, branding, processes, and exclusive partnerships are highly important resources that should be well-guarded. Your company may need to acquire this intellectual property from another company, and then maintain a positive relationship for the greatest benefit.
No matter what business you’re in, your people will always be one of the most important foundational resources. A person can fulfill many roles for your company and help you meet critical needs you may not be fully aware of. A person in your business may:
- Bring marketing value and technical knowledge by being well known in their field.
- Have an incredible relationship with your most critical customers.
- Have the creative vision for directing future products and campaigns.
- Satisfy customers through amazing software troubleshooting.
- Excel at fundraising, networking, sales, and other specialties.
These are the people who help to create the customer relationships and value propositions that undergird your business.
All you need to do for this section of the BMC is identify your ‘people resources’ and make a list. Later on, you’ll need to figure out how to retain them and continue enabling their skills.
Needing capital to fund your business may seem like a no-brainer, but money is a largely overlooked resource for many companies during the Business Model Canvas process. Your business may need access to physical cash, a line of credit, or even a loan. A sufficient flow of money is required to pay for obligations (e.g. employees, rent, utilities, loans), take advantage of opportunities (e.g. discounts, purchases for growth), and cover emergencies. Securing excellent relationships with your bank, investors and donors, and other financial providers can be a strategic move as well as a resourceful one.
The Four Key Business Resources at Work
To get a better idea of the four kinds of key business resources, let’s look at the example of a small fictional nursery. The nursery doesn’t have any Intellectual Property at this time, so that category not included on this list.
This business has very carefully outlined their resources in all three relevant categories. They physically possess a greenhouse in which to grow their plants, making the top of the list. Their delivery truck brings said plants to individuals on their customer list, both of which are physical items that can be held, sold, or upgraded.
The plant propagation manager and the plant salesperson each contribute to the overall sales for the company. As invaluable employees with a wide range of experience and ROI, these human resources should be maintained at all costs.
The financial resources of the business include the loan that the nursery took out for their greenhouse, a large part of their income-generating physical resources. A line of credit is also listed to deal with other purchases for the company, such as soil and fertilizer. These financial resources should not be thought of as negative assets, but rather important monetary investments that help businesses grow and thrive.
Define Your Key Business Resources
To identify the key things your business could not live without, trying walking through your company during a day of normal operation. What tools are required to produce your product? What tangible and intangible assets are required to market it to your customer segments? As you decide on what your key resources are, categorize them to determine whether they consist of general things, physical objects, or people. This is important to keep in mind as you move forward in the BMC to identifying key company activities, or the “actions” your business takes every day.
All businesses will eventually encounter challenges, no matter how prepared they are. Understanding the resources your nonprofit company can’t do without is the first step toward protecting it from unnecessary hiccups and obstacles that could impede its ultimate success.
SCORE is always here to help. Need support to create a business model canvas for your business?. Talk to a SCORE mentor today and get started on the road to a profitable business.
Be the first to know what’s new on our blog, which free workshops are coming up, and the business trends to watch by signing up to receive our newsletter.
Copyright © 2023 SCORE Association, SCORE.org
Copyright © 2022 SCORE Association, www.score.org
Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.