- February 11, 2019
- Posted by: Sandra Udenze
- Category: Business Negotiation, Digital Marketing, eBusiness and eCommerce
All innovative businesses that are set to last the sands of times, always have a strategic way of doing business, no one goes into the battlefield without been fully armed.
On this article, we will be talking about a business model, what it entails and the benefit you can get from it as a business person. Before we do all that, let’s see what a business model really is
A business model is a properly crafted plan that is drawn out to show or describe the successful running of a business, the products and also the services that will be rendered to the company’s customer base, and finally focusing on how to gain main income streams. Wikipedia described it to be 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. This model is usually put in a canvas form which brought about the name business model canvas.
An illustration of a typical business model canvas.
In the above diagram, it shows all that is needed to consider when building a business model and we are going to go through them one after the other.
This is used show your network of key partners and suppliers in the business you are into, sometimes partnership is considered when looking out for the growth of your business while some other business owners see it as their cornerstone from the initial start of their business.
In this section of the business canvas, this will show what activities your business intent to or is already doing as a company. This entails actions that will determine the successful running of the company. It shows all the resources and services that your company will take as their day to day task to meet consumer wants. And for all companies, these activities differ depending on the type of market your company is into.
This I will consider as one of the important things every company before startup should take into cognizance, the big question “What value am I giving to my customers?”. For you to consider starting up a business, there must always be a form of value for intend to give out to the public as a way o been a problem solver, it can come in the form of a product or service and that is what will determine your income generation, which brings us to the next segment
This is the income your company generates from the products or services it renders to customers which your customer reciprocates by paying in cash. For every revenue generator you have through in your company, they should be independent of each other. These revenue streams can come in two ways
- Transactions resulting from one-time paying customers and
- Revenues that are recurring from consistent ongoing payments from value delivered to customers and customer post-purchase support.
Channels can be described as the modes of communication your company employs to reach its customers so as to deliver its values. These channels consist of sales channels, distribution channels and communication channels that will give the customer the confidence and assurance of getting the value they are paying for.
These channels serves as a way a of creating consumer awareness, helping customers evaluate the value your company is providing to them, ensuring there cash purchase of product and services after the customer has made up their mind to patronize your business, and how you as the business owner will pass across your product and service to reach your customers.
In this case, these shows the resources that you need to run the company and give the value proposition to your customer base. You have to see the transportation mode on how your product will reach your customers if it is a physical product, and also that of the services. your company staffs can also be a resource to you and the customer relations service you provide can also serve as a form of a resource to you.
This is the group of audience, customers and organizations your company aim to reach and provide value to. The customer is the heart of any business and no company survives for long without customers. As a business owner, you should know the customer that your business aims to target and make sure to concentrate on these targeted customer base.
This is the type of relationship you establish with your customers. A company should clarify the type of relationship it wants to establish with its customers, these relations can be personal relationships or automated relationships. The motivation for customer relationship can be driven from:
- Customer acquisition
- Customer retention
- Boosting sales
This is the whole cost incurred in running your business, they are important expenses that pertain all the daily running of your business. These costs may include costs from your business activities, cost of maintaining customer relationships, cost of getting resources, the cost of the business partnership etc.
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