Becoming an entrepreneur opens a world of possibilities, and though one of these is the potential for failure, everyone hopes for great success and financial prosperity. Operating a business isn’t easy, and many people expect challenges and difficulties on the way to the top. However, many underestimate the importance of having a strong business model in place before the first sale is made.
A business model sets the foundation for how your business will operate, how you will create value for your customers, and how you will advance past industry competition. It is also a starting point for investors like Mark Stevens to evaluate the potential of the company. Investors need to have reasonable assurance that their money will be put into a business venture that is worth the risk, and a business model is revealed through the business plan. These steps help you create a streamlined plan for your business, focusing on growth and longevity.
Identify Your Audience
Without carefully choosing a specific audience, you don’t give your business the opportunity to address the individuals and markets that either need or want your services or products. A target market shouldn’t be based on a general assumption about community needs, but it should focus on a specific profile that includes the personas of two or three types of buyers. Come up with a profile for the ideal customer, then work out to incorporate correlating demographic information. Think of the problem your product or service will have and which group of buyers this would most benefit. Consider Walmart, the major retailer. This is a company that fits almost every purchase need of the average shopper, but you won’t find contractors or homebuilders headed there for home furnishings. In spite of their huge success and national presence, the retailer still knows who their specific audience is.
Determine Your Business Processes
Before you are able to connect with customers or hire employees, you should be able to define each area of activity that will make the business model work. The core aspects of your operations are the most crucial functions to develop. Don’t just know what they are but also be comfortable with the resources and efforts it will take to make them run smoothly. Things like marketing, product delivery, and invoicing all are all key activities to understand.
Document Key Resources
The different aspects of the operation will inevitably rely on different resources to work efficiently. Compile a master list of key business resources, then go through and makes sure that your business model has the capital it needs to provide these resources. Your resources aren’t limited to vendor and supplies, but also storage facilities, a digital presence, customer lists, and financial capital.
Develop Your Product’s Value Proposition
Unless you are in a niche business with little competition, you will need to find a way to rise to the top of your field. Identifying your value proposition is usually done in the early stages of business development, as you look for creative ways to solve an industry need. As you prepare to market your services, you will need to bring that value to the front of the discussion. Your value is more than just a price point. Contrary to popular opinion, consumers aren’t just worried about the price. They want to know about quality and what makes one product or business a better choice. Sustainability, customer service, self-service options, or a revolutionary idea can support why your product has value. Develop a product delivery system that keeps your product and business valuable and relevant to consumers for a long period of time.
Secure Business Partners
In the business world, no man is an island. You may not need or want a financial partner or investor, but you won’t be able to conduct business without the help of advertising partners, suppliers or vendors, and networking connections. Look for partners that have a specialty service or supply chain in your industry, as this can help eliminate third party and transport costs. Negotiate your contracts carefully, looking at quality and consistency, in addition to the cost. Make sure those you partner with understand your goals and business model, as the relationship you form will either promote or detract from them.
Allow for Innovation
Over time and as your business becomes more successful, you need to leave room for growth through innovation. Create consumer loyalty by developing a brand that they can get behind, but deliver the products they are looking for with quality service. Your business model may need to adapt to consumer trends, so don’t feel that this plan must remain static. As your business begins to understand the needs of the consumer and what may be happening in the market, revisit your business model and adapt it to foster continued success.