8 Ways to Make Your Business Model a Strong One

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Business models are important and an amateur entrepreneur might not give it much importance. After all, what could go wrong? Of course, you planned to wipe out any obstacle on your startup’s path like this…

[2]

Pretty cool for a superhero business person like yourself!

A few months later… you went from this…

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To this!

[4]

How did it end up this way?

Well, you were not armed with the right Business Model!

It’s so easy to overlook crucial elements like having the right business model when you are eager to kickstart your startup already and not wait to put a business model in place. You can either jump the hurdles when you come to it or research and plan ahead in order to prepare yourself and your venture better. 

So, what is a business model?

A Business Model is a conceptual structure that supports the viability of a product or company and explains how the company operates, makes money, and how it intends to achieve its goals. [5]

To narrow it down even further, a business model describes how a company creates, delivers and attains value for itself as well as its customers.

Types of Business Models

These are various business models that one can incorporate in their business:

  1. Bricks and Clicks – this model is sometimes used by large chain stores where a user can order a product online (clicks) and pick it up from the store (bricks). 
  2. Cutting out the Middleman – as the name suggests, this model eliminates the components of a traditional business approach such as a wholesaler, distributor or agent. Here a company can deal with the consumer directly, possibly via the internet.
  3. Direct Sales – this is when a seller markets and sells a product to the customer, away from a fixed location. This could mean going to the customer’s workplace or homes and giving one-to-one demonstrations or other personal contact arrangements [6].
  4. Franchise – is using another business’s successful business model. It is an alternative to building chain stores and avoiding liability.

There are peer-to-peer, freemium, agency-based, hidden revenue, blockchain-based, affiliate marketing, and many other forms of business models. You can use the one that is most relevant to your startup [7].

How to Develop a Strong Business Model for your Startup?

To develop the right business model, consider the 8 points below which will form the crucial components of your business model.

1. Your Key Demographic

Are you aware of your target audience? You can have a wide target audience but this will only stop you from identifying the two or three detailed categories of buyers or consumers who share a larger percentage of the key demographic for your product. To narrow down your target audience would mean that you are paving a specific path for all your marketing and advertising strategies towards this group so that there are more sales for your product.

2. Customer’s Pain Points and Solutions

Try to see whether your product solves the customer’s problem. You might have a very good prototype but maybe there is a better option out there that the consumer swears by. Float your product to customers and get their thorough feedback. If they are as psyched by your product as you are then it is safer to manufacture your product in larger quantities. Also, does the product provide a solution to the customer that is unmatched by another at that price point? See who your peers are in the market and how you could ensure that your product benefits in the market.

3. Pricing

The impulse is to sell. And sometimes in the frenzy to up the number of sales, we forget whether it is bringing any real value to the seller. Did you check whether the pricing is right for your product? How much does it cost you to make, market and distribute the product? Do you make a profit by selling the product at that specific unit price?

4. Key Business Resources

Does your company have the key business resources in place to document the daily processes, find new customers and reach business goals? Do you have a website, customer lists, a warehouse, etc. to ensure that you keep growing steadily? [8]

5. Business Partners

You are not a standalone program. Hence, ensure that you identify the key business partners required to serve your customers better like suppliers, advertising partners, fundraising, etc. A way to connect with future business partners is Alumni Alliances, where you can also find providers of business solutions.

6. Listen to Experts

Take the opinion and feedback of outside parties like industry experts or investors who know more about the market than you do. They can provide unbiased feedback as well as help in setting up connections such as sales and distribution channels. It is worthwhile speaking to potential investors as well even if you are the only one bootstrapping your startup [9].

7. Trade Shows

Test your product out at trade shows. Ensure that you also record all customer feedback. There would be other industry groups in such trade shows and their feedback on your product will help in scaling the product higher. 

8. Product Improvement and Future Innovation

Know that this is not the last step. There is always room for improvement and innovation. The reason that a customer will purchase your product is that it is new and has promise. Keep analyzing the further costs involved in making your product better as well as scouting for other product ideas and consider patenting them. Also, aim towards improving your distribution channels, marketing strategies, customer service, etc., so that your present product steadily gains a greater market share. 

These are our 8 ways to make your business model a strong one. Do you agree or disagree?

Let us know your thoughts in the comments section. We would love to hear from you. Also, please gives a thumbs up to this article by sharing it through the various social media platforms.

References:
1. Featured Image – Freepik
2. www.gifake.net
3. www.freepik.com
3. Dooder
4. What is a Business Model?
5. Business Model
6. What Is a Business Model? 30 Successful Types of Business Models You Need to Know
7. The 7 Elements of a Strong Business Model
8. 7 Steps for Establishing the Right Business Model

 

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