Are you launching your startup and trying to develop a sustainable business model?
Or possibly you launched your small business with a model that made sense several years ago, but it needs an injection of fresh perspective?
Or … maybe you’re wondering, “What in the world is a business model?”
The subject of “business models” is often misunderstood, incorrectly associated with revenue models or not even broached at all. But it’s comprised of essential core assumptions that will help you iron out the dirty details and work more intelligently.
Often we spend a lot of time and energy on what’s next (version 9.0) that we forget what made our companies successful in the first place – mastery of the basics.
Simplicity is essential in business. Yet sometimes it feels like the hardest thing to achieve. So if you’re in need of business clarity, you’ll soon find it by doing one simple thing — re-evaluating your business model.
Building a Simple Business Model
By definition a business model describes how you plan to create, deliver, and capture value. Is that vague enough for you?
It seems intangible because it operates as an umbrella for many different aspects of how you do business. Specifically it defines how “you deliver value to customers, entice customers to pay for value, and convert those payments to profit.”
And it’s not to be confused with a ‘revenue model.’
A revenue model is a way to generate revenues, like charging your customers or advertising. A sound business model includes other important aspects and indicates how your company:
1. Creates and delivers value to customers,
2. Earns a profit (revenue model),
3. Utilizes various functions (staffing, machinery, technology, branding, etc.) and;
4. Incorporates processes (operations, manufacturing, etc).
Revitalizing Your Business Model
Now that you have business model clarity, it’s time to evaluate your business. Here are eight simple questions that can transform and breathe new life into your business.