Knowing your business model well is key to your business success.
Running a small business can be a challenge, that’s for sure. Finding new leads, chasing those leads and converting them to satisfied, paying clients is what most business owners spend their time trying to achieve.
Some business owners are always busy working long hours to meet all of their clients’ needs while others seem to have quite a bit of time on their hands, enjoy their weekends off.
Clearly the busy ones are the most successful, right?
There are far too many business owners working long hours each week just to keep their business afloat. They have great products to sell and a genuine need in the market for what they are selling, but their business is not setup in a way that maximises their efforts.
Their model does not fit their market, and that is what makes the difference.
Success often comes down to having a very clear business model and understanding and implementing it well.
Your business model is ‘what you do to bring revenue into your business’. A good business model will clearly outline the steps you need to take to sell your product. With enough revenue generated to pay all expenses and leave enough left over to give you a nice tidy profit.
Do you know your business model? Really? Does it cover everything it should or have you had a few unpleasant surprises?
A business model should include the following:
- Exactly who your ideal customers are and how you can help them.
- Exactly how you will reach those customers. Where are they hanging out?
- Exactly what it is you can offer as a product or service to help them.
- Exactly how this solution or product will make a difference in their life.
- Exactly what it will take for you to build and maintain relationships with them.
- Exactly what you need to do to produce your service or product.
- Exactly who you need to be in partnership with to produce your service or product.
- Exactly what you will need from each of those partners.
- Exactly what you will need to do to uphold your side of the partnerships.
- Exactly how, step by step you are going to make revenue.
- Exactly what cost structures need to be in place to generate the revenue.
- Exactly what resources you need to cover each aspect of your business model.
So how is your business model doing? Do you understand it? Do you know how many new clients you need to generate and how to go about doing that? Have you mapped out just ‘how’ you will build your business to generate the income you would like? These are all questions that a business owner should be able to answer. Can you?
It is fundamental to the success of your business that you understand just how you will generate income. But it is not always about dollars and getting new customers. For a business to be successful in the long term requires understanding of each step in the many processes it takes to really survive in the business marketplace. Sometimes a clear review of your business model will identify flaws that will prompt you to re-evaluate your business completely.
If your business isn’t earning as much as you would like, look beyond your marketing or the rate you’re charging. The real solution may be to choose a new business model.