First of all what do we mean when we say business model? A business model is a representation of how the company will make money. It is a condensed description of how an organization or company conducts business and how they generate income.
Some pointers when selecting a business model:
Read and examine models that other successful individuals have used when offering related product and services. Innovation is a good thing however; duplicating a proven business model insures success.
The best option is to duplicate a successful business.
The 9 building blocks of a basic business model would constitute the following:
– Core capabilities – competency and capacity needed to accomplish the model.
– Key partners – partner network participation in the model and other aspects of it.
– Value configuration – underlying principle for a mutual beneficial relationship between an organization or company and its customers.
– Value proposition – the products and services being offered to the market.
– Target market – the objective of any business is to attract customers to buy the products and services offered in order to earn income.
– Distribution channel – communication and distribution route to reach customers and offer them the value proposition which would include the marketing and distribution strategy.
– Client/Customer relationship – the link that is established with the customers and the process of client relationship development.
– Cost structure – the monetary requirement in deploying the business model.
– Revenue streams – how the company makes money which constitutes the revenue model.
Once you have chosen your business model, the next step is to create your actual business plan. One of the best things about creating your business plan is that it may cause you to rethink aspects of your business model.
A change in the model chosen is just part of the process. Although the model picked is firm and tested, there is still a need to make minor changes. Change is good but too much change may pose a threat to your company. Picking out business models that other successful companies use has been proven to increase the chance for success. Adopting a business model does not necessarily mean completely copying it.
Business model innovation
Innovation is closely related to the creation of business models. New and innovative models create a threat to replace other established trade models and traditional means of doing business. Some established organizations and companies look for new and unique business models that will compete with other companies thereby securing their position and success in the industry they are in.
Entrepreneurs and executives heighten their competency to manage continuous change and adapt to hasty changes in the business world. They do this by embracing and implementing new ideas into their business models.
A great business model does not ensure you that you are going to be successful. Hard work is certainly a great weapon for anyone’s success!