How to Lay the Groundwork for a Successful Business Model
Building a business takes a lot of work and a considerable investment of time and resources to ensure a company’s longevity. There is a lot of preparation that goes into a business plan, and no matter your best efforts, change, and complications are inevitable. A business model that will keep your operations running and attract the eye of potential investors needs a strong foundation built on many elements.
A Narrow Audience
When you focus on a broad audience, you cannot effectively market to those who would find value in your product or service. The individuals who need what you sell will fall into a specific category. Outline who your target audience is by sorting out their challenges and the solutions you offer. Understand the demographics of these individuals to focus your marketing efforts.
A Singular Focus
You may have several great ideas for your business, but your model needs to be clear on the basics. Define key business processes after determining core business activities. When you can define the “why” of what you’re doing, it’s a lot easier to determine the “how”. Limit your efforts to core themes before pouring hours into the details. As the business evolves, details will need to be adjusted.
A Strong Value Proposition
Company longevity determines how well your product or service retains its value to consumers over time. If you seek investment support, it’s your value proposition that will demonstrate how well your product will stand out from the competition.
Related: Taking an Investor’s Perspective on Your Company’s Values
A Smart Use of Resources
New business owners rarely have the finances or assets in place to fully fund their venture. However, it’s essential to have key business resources planned and defined before getting too far into the planning process. Some resources are going to be more beneficial than others at the outset, but key items to include that will help sustain your business include:
- Website or social media presence
- Warehouse or operating space
- Office or warehouse equipment
- Patents or trademarks
If you are seeking help from an investor, you also need to show responsible use of your resources. Have a plan for how capital will advance the growth and stability of your company or highlight the value these add to your operations.
A Qualified Team
Although you may be the sole employee of your new business at the beginning, you shouldn’t head off on the venture on your own. Build a network to help you on your journey. It starts with peer support. Join a peer-to-peer organization or network with other entrepreneurs or business owners to gain feedback or insight. Form a board of advisors consisting of business leaders or mentors who have a range of experiences and talents. These perspectives can help as you work through financing, sales, marketing, legal, or brand management issues.
Related: The CEO’s Guide to Building Great Teams
A Plan for the Future
Your initial business model is built upon many assumptions and is based on current market data. However, your plan may need to evolve if it will continue meeting consumers’ needs. Always leave room in your plan for innovation. Flexibility is crucial to long-term business success.
Related: Scaling Small Businesses While Preparing for the Unexpected
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