What is a Business Model? How to write a Winning Business Model?
It the end, it is all about the strategies, or so they say. When you are formulating your business idea, you need to develop a rock-solid Business plan. Why is a rock-solid Business plan necessary? Because it would not only help you to sort things out efficiently, but in case you are looking forward to accessing funds from Investors, and banks, and individuals, you would need to convince them well, and the only reliable solution for the same is a perfect, winning Business Model.
What is a Business Model?
According to its literal definition, ‘A business model describes the rationale of how an organization creates, delivers, and captures value, in economic, social, cultural or other contexts. The process of business model construction and modification is also called business model innovation and forms a part of business strategy.’ In short words, a Business model is your blueprint to success, and it is also your strategic plan to make your business more successful, or better than your competitors, to create that brand value for the business, and so on.
Why should you write a Business Model?
Not every Business develops a Business Model or a Business plan. Only a few of entrepreneurs try to write a Business model, and they are the ones who have high chances of succeeding in their business. Business Model would act as a guide for an individual once his/her business is in motion. Let us understand a few of the reasons why you should consider writing a Business Model.
1. Convincing the Investors
What type of magic trick do you have up your sleeve to woe your Investors and make them believe that your business can be a great success? You can use your Business Model to showcase your talent or to help them see your vision, your planning, your future goals, and so on. The fact that you created a Business Model would suffice enough for the Investor to believe that you are serious about your business and that in turn would help you gain their trust.
2. Taking Important Decisions
You cannot take important or crucial decisions on a whim, or process them during your thinking period without considering any basis for the same. You need to have a look at a roadmap, or the whole idea of your Business Model and make your future Important decisions accordingly. If you have a Business Model, you would at least be looking at a blueprint of your business.
3. Avoiding Major Mistakes
This goes without saying, writing a business model can help you understand a few things or mistakes that you can/could have made. If you do not write a Business model you would have never been able to figure out these mistakes beforehand.
4. A Guide
Even if your business is on a small-scale, you would need staff or the companions of your business journey. For them to work effectively, even they need to see the clear and the bigger picture, from time to time. However, it is not possible for an entrepreneur to always remain on the field and guide each and every way through. In such a case, your Business Model can act as a guide for your staff.
How to write a Winning Business Model
Understanding its Importance we have reached a stage where we realize that writing a Business Model would be one of the best decisions after all. However, the next challenge up is the word ‘How?’. How should you draw your Business Model that should act as a future guide and sound convincing to all at the same time?
1. Selecting the Category
The First order of business is to select your target specific audience and understanding who your customers are, what do they want, what would serve them better through your business model. One of the effective ways to figure this out is to think from an individual’s perspective, figuring out his/her likes and dislikes and then taking the decision forward.
2. The Business Model/Network
The Next step up is to analyse what works best for you, which part of the chain are you going to aim for. Where your physical or online stores would maintain their presence? Which part of the business process are you going to opt for? Which business process works best as per your knowledge or experience? This question would help you to draw the basis of a Business Model.
3. Reachability and Presence
One of the crucial things that you need to keep in mind while developing a business model is to think and add about your presence, or the resources that you’d be using to drive sales and creating a brand. It could be a well-developed website, your warehouses, and storages, your physical store or head-office, and so on.
4. How do you Standout?
A Business Model would also entirely depend on the type of unique product or a unique service that you’d offer by competing against your competitors. Your Business Model should definitely answer this question, as it is the most crucial point for the Investors. In such a case, you should add about extensive product research in your business plan to reach such a height.
5. Innovative Plans
By Innovative plans what you should focus on is the possibility of enhancing and developing, or evolving your product at any given time. For E.g., what if your product does not suit the audience when launched in the market? What is the backup option you have? In such a case, you should have an enhancement in your mind, and having an Innovative plan or R & D, would just help you for growth.
6. Strategy and Campaign
Nothing is remarkable or noticeable unless marketed very well, right? You should carry out extensive Market research and develop strategies to make way for your Business Model in this competitive world, for how else will you convince to get your funds? Hence, a decent and strategic marketing strategy should be thought of.
Writing a Winning Business Model can be challenging if not implicated in the right manner. After covering all the aspects of the business world, should you start to write a Business Model? There are numerous reasons why you should write a Business Model, as it works as a roadmap and also helps you convince the Investors.