There are people who often get lightbulb moments of business ideas but do not know how to take the next step. They would make time to meet potential investors and partners but — when asked to show their business model — end up scratching their heads, shrugging their shoulders, and just giving up.
Putting together a business model may sound like a lot of work, especially for the non-business-educated. It may seem daunting, causing analysis paralysis and crushing the dream early in its tracks.
If this has ever happened to you, know that you are not alone. If it has ever happened to you, then it is serendipity that brought you here. Because maybe, just maybe, this will finally help you make your dream business come true.
What is a business model?
Carol M. Kopp gives a simple and straightforward definition in Investopedia:
“The term business model refers to a company's plan for making a profit. It identifies the products or services the business plans to sell, its identified target market, and any anticipated expenses.”
GrowthLab’s definition is a bit more dramatic:
“Turning a company’s story into a series of financial statements is a combination of art and science. The art is the business acumen of interpreting vision and facts into assumptions while the science is a collection of facts, market observations, and financial statement analysis to inform the algorithms and assumptions.”
The business model is where everything begins. Think of it as the plan you make the night before, visualizing the day that follows and seeing in your head how you want it to go; the results you want to achieve.
A business model is not permanent. You can begin with one and — years into the business and loads of data later — you can pivot and change it up so it continues to serve your new business goals as you tackle new challenges.
A business model basically answers 3 questions:
The 7 elements of a strong business model
Google “business model” and you will be inundated with different sources sharing different ways of putting together a business model. We decided to refer to Larry Alton’s piece for Entrepreneur.com because it is more friendly to the non-business-oriented businessmen wannabes.
Identify who it is you want your business to reach, to acquire as customers, and to retain as loyal clientele. Plot out 3 audience personas, identify their demographics, the challenges they face, and the solutions your business can offer to them.
What are the internal processes that need to run so that your business will also run smoothly and scale? Samples are business development, marketing, sales, human resources, accounting, creatives, and account management (or services that BizScale offers if you cannot afford a considerable overhead).
What does your business need on a daily basis that will help you achieve your targets? These can be your database of contacts, membership in business networking organizations, your digital assets, your capital, and your client list. These are the secret weapons that you can readily draw if needed.
What is your why, and why should prospective clients choose you? Identify your Unique Selling Propositions (USPs) and communicate them repeatedly, creatively, persistently. Always think that a fresh of eyes is looking at your business. How will you introduce yourself? How will you win them?
They say no man is an island, and this is especially true in business. You will always have partners who will regularly do business with you. Like in the case of Scaped.com, this can be the suppliers and professionals. Or in the case of Hauled.com, this can be the operators, shippers, and carriers.
Times are different and people are more mindful of how they spend their hard-earned income. How will you reach them? What will they consider before they decide to buy from you or register with your website? Know the customer journey and master the sales funnel — and list strategies from there.
You can be the best planner in the world but, without an agile outlook, you might get trapped in the box of perfectionism or being a control freak. The business landscape is constantly changing, what with the role of technology that is continuously growing. Don’t hold on to what you think should be.
Accept what is and grow with it.
Did you know that you can actually create a business plan in 20 minutes? Alexander Cowan published an easy-to-follow virtual “workshop” that you can access here.
Our you can also watch this video:
If you need help with creating a business model, building your brand, or running your business (with low overhead), contact BizScale today. We can help you do more with less, focus on high-ROI tasks, and run your business worry-free.