How To Design A Winning Business Model For Your Startup
As an entrepreneur or startup founder, a winning business model is key to the success of your business empire. Over the years, the strategy has been the powerhouse of competitiveness. So, your quest for sustainable advantage begins with your business model. It might be easy for you to jump into a business, but you need a winning business model to sustain your business especially here in Nigeria.
Also read: How to create an enabling business environment for your employees
You should know that your business model is not all about your business plan or your products and services. It goes beyond that. The business model ideology is how you plan to create ongoing value for your customers in the course of your business. Your business model entails the time your business idea starts, the direction of its progress, and when to know that you are successful. How are you going to create value for your customers? In fact, a winning business model is everything you need to make your startup or business success as an entrepreneur
What Is A Business Model?
For your business or startup to thrive as an entrepreneur, you need to have a very good understanding of the working principle of a business model. Not just any business model, a winning business model. A very simple explanation of a business model goes thus: Who are your customers? What do your customers value? How do you intend to deliver value at an appropriate cost? Your answers to the above-mentioned questions form your business model.
According to Clay Christensen of Harvard Business School, a winning business model consists of four key elements:
- Your customer value proposition
- A profit formula
- Your key resources
- The key processes for your business
As a startup founder or entrepreneur in Nigeria, you are saddled with three important choices when creating your winning business model. These choices include:
- The policy choices; it determines the actions that your organization will take or takes across all its operations.
- Asset choices: it concerns all tangible resources your company will deploy in the course of the business.
- Governance choices: pertains to how your company will arrange decision making right over the first two choices.
Whatever you do in your business establishment, ensure that you have all the above-listed points sorted out. It will definitely come in handy when it matters most.
Tips On How To Design Your Winning Business Model
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First, identify your specific audience
Spreading your tentacles at the onset of your business to accommodate a wide range of customer might not be the best approach. You need to narrow down your customers to probably two or three detailed buyer personas. Once you have your target audience mapped out, outline their demographic challenges and the solutions that your company will provide.
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Create business processes
Before launching your business, you need to have a very good understanding of all the activities that will make your business model work. Determine your key business activities by first identifying and understanding the core aspect of your business’s offerings. Are you going to be consulting, responsible for providing a service, or shipping a product? You have to outline your process.
For every business, the key processes always revolve around product or service delivery and management.
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Identify and record your key resources
You must know those things that your company need to carry out its daily operational processes. What are the things needed to find new customers and attain business goals? You need to document vital business resources to ensure your business model is well-prepared for. These resources may include capital, warehouse, office building, intellectual property, comprehensive customer list, just to mention but a few.
Also see: How to build a business system that will improve your productivity
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Create a strong value proposition
You need to identify the ways that your company will stand out among the increasing number of competitions. Are you providing an innovative service, a new twist of an old product, or an entirely disruptive product? Your strong value proposition starts with your ability to identify ways you are better than your competitors. When you identify your value proposition, link each one to a service or product delivery system or product. It will help you remain valuable to your customers over time.
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Identify your key business partners
There is no business that can reach its goals without strategic partners. So, while establishing your winning business model, it is essential to factor in key business partners. You partners like suppliers, advertising partners, etc. Partnerships in business often prove to be the difference between success and failure. Therefore, you must be very selective about your partners and the agreement you reach with them.
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Be flexible to innovate
This is very important when creating your winning business model. You must leave room for innovation. Change is the constant thing in life, which means you customers taste might change, product demand may decline, just to mention but a few. You need to be very innovative in this changing world if you must continue to be in business.
Conclusion
Building a winning business model goes beyond launching and starting your business. you need to sit down and critically go through all that have been listed and explained in this article. Be intentional when building your business, and never leave anything to chance.
