BMC Part Six: Key Resources
What does your business depend on?
What can’t you afford to lose?
These irreplaceable elements are Key Resources, the vital ingredients and components that are required for your Value Proposition to exist.
Picture a game of Jenga.
You try and gently remove one of the blocks…and you get it out. Success!
That obviously wasn’t a key part of the tower.
If you remove a block and the whole thing collapses, you’ve found a key part of the structure, which you can’t afford to remove (and you need to get better at Jenga).
This is what makes something a Key Resource – without it, your whole business collapses.
By listing them all here, we can find ways to protect them, backing them up and ensuring the business’s longevity.
It could be a person, like the founder or a vital team member.
It could be a special building or location.
It could be your equipment and machinery.
It could be your intellectual property, like a trade secret or a unique recipe.
It could be a patent, that stops imitators.
It could be your brand, a name customers recognise and trust over the rest of the market.
Interestingly, it’s not the same for every business – even within the same industry.
We pay much more for a meal prepared by a celebrity chef, because it adds to the experience and the story. That doesn’t mean every restaurant needs to list an individual chef on their Key Resources.
Sometimes the chef is replaceable, sometimes they’re not.
The same goes for buildings. If you had to move 300 metres down the road, would your business model still work?
If it would be fine, then that particular building probably isn’t a Key Resource.
If it would be a disaster, then we know that our current premises are vital to our success, so we’ll list them here.
Brands are interesting. Is your customer more willing to pay more for your product because of the brand? If yes, then your brand is a Key Resource that needs maintenance and attention. If customers don’t care, then let’s not include our brand in this box.
An exciting question you get to ask is: What should we outsource and what should we do ourselves?
Key Resources are expensive to own, but they can be worthwhile.
That means, it’s worth toying with the idea of outsourcing the less important functions to a Key Partner, someone who is an expert in that field.
Vice versa, it can sometimes be worth pulling a feature in-house, like how Netflix create their own content.
Four questions for your business
· What are our key resources?
· Do we have a plan for defending/retaining these resources?
· Are there opportunities to move something off to a partner?
· Are there opportunities to in-source something that’s currently owned by a partner?
Next we're onto our Key Activities...
This is a multi-part series on the Business Model Canvas.
If you’d like to jump straight to a particular section, go to:
Overview: How To Use The Business Model Canvas