Developing a Business Idea Using the Business Model Canvas
Senior 3 · Entrepreneurship
Developing a Business Idea Using the Business Model Canvas
Lesson 3 of 4
25 min
Ishimwe’s canvas convinced her aunt. But when she asked her SACCO, a savings and credit cooperative, for a loan of Frw 200,000, the loan officer asked a harder question: “Show me your business plan.” A lender wants to know exactly how much money is needed, what it will be spent on, how many packets will be sold, and how the loan will be repaid. A canvas answers what the business is; a business plan also answers how much, when and who.
Definition
Business plan: a written document that describes a business, its goals, its market and how it will operate, with financial forecasts showing how it will reach those goals.
Executive summary: a short overview, usually one page, at the start of a business plan that gives its main points: the idea, the market, the team, the money needed and the expected results.
Start-up costs: the money needed to set up a business before it starts selling, such as equipment, first stock and registration.
| Element | What it contains |
|---|---|
| Executive summary | the whole plan in brief: the problem and solution, customers, competitive advantage, owners, money needed and how it will be repaid |
| Business description | name, location, legal form, products or services, vision, mission and objectives |
| Market analysis | the customer segments and their size, competitors, prices in the market and trends, from the owner’s market research |
| Marketing plan | the product, price, place and promotion (the 4Ps), and sales targets |
| Operations plan | premises, equipment, suppliers, the production process, quality control, permits and certificates needed |
| Management and organisation | owners and managers, their skills and experience, staff and their duties, an organisation chart |
| Financial plan | start-up costs and sources of finance, a sales forecast, a projected income statement, a cash-flow forecast and the break-even point |
| Risk analysis | what could go wrong and how the business will reduce each risk |
| Appendices | supporting papers: CVs, price quotations, survey results, copies of licences |
Tip
Write the executive summary last. It summarises every other section, so it can only be written when they are finished. But it goes first, because a busy loan officer may read nothing else. One page, plain words, real figures.
Definition
Fixed costs: costs that stay the same whatever the quantity produced, such as rent and salaries. Variable costs: costs that rise with each unit produced, such as raw materials and packaging.
Break-even point: the level of sales at which total revenue equals total costs, so there is neither profit nor loss.
Cash-flow forecast: a table of the money expected to come into and go out of a business each month, showing whether it will have enough cash to pay its bills.
Worked example
Worked example 1: a start-up budget (illustrative figures)
| Start-up item | Cost (Frw) |
|---|---|
| Solar dryer, built by a local workshop | 180,000 |
| Packet sealer | 60,000 |
| Trays, knives, buckets and a scale | 40,000 |
| First stock of packets and labels | 30,000 |
| Registration and product testing | 40,000 |
| Working capital for the first month | 50,000 |
| Total | 400,000 |
Check: .
Sources of finance: own savings Frw 100,000, a family contribution Frw 100,000 and a SACCO loan Frw 200,000, which also total Frw 400,000.
Worked example
Worked example 2: monthly profit and break-even (illustrative figures)
Ishimwe plans to sell 300 packets a month at Frw 1,000. Each packet costs Frw 400 in tomatoes, packaging and transport (variable cost). Fixed costs are Frw 110,000 a month: rent of drying space Frw 30,000, phone and promotion Frw 20,000 and a helper’s wage Frw 60,000.
Revenue: . Variable costs: .
Profit: , so Frw 70,000 a month.
Break-even: Packets are sold whole, so she must sell 184 packets a month to cover all her costs. Her target of 300 is well above this, which gives a safety margin if sales are slow.
A finished canvas is a good outline for a business plan: each block feeds one or more sections.
| Canvas block | Business plan section |
|---|---|
| Customer segments | market analysis |
| Value propositions | business description; marketing plan (product) |
| Channels and customer relationships | marketing plan (place and promotion) |
| Key resources, key activities and key partners | operations plan; management and organisation |
| Revenue streams and cost structure | financial plan |
Warning
Common mistakes. (1) Sales forecasts based on hope, not research: “everyone in Kigali will buy”. (2) Leaving out the owner’s own wage, or loan repayments, so the profit looks larger than it is. (3) No risk section: a lender trusts a plan more when it shows what could go wrong and what the owner will do about it.
Practice
Sources and credits
Written by Ganzaa: the diagram of the plan’s sections, the tables, the Ishimwe figures, the worked examples and the practice items. The case and all figures are illustrative (2026).
