Updated: Feb 2
The COVID-19 pandemic not only changed our lifestyles but also brought countless changes into the workplace. One of the most prominent is people leaving to start their own businesses. It may seem simple when everyone else is doing it. Yet, there is a lot more to starting a business than it appears on the surface level. The most important and commonly left-out aspect of starting a business is creating a business model.
What is a business model?
A business model is your plan or roadmap to your business; essentially, it describes the rationale of how an organization creates, delivers, and captures value in economic, social, cultural, or other contexts. Though, there is a lot more to it. It’s a design for the successful operation of a business, including identifying revenue sources, customer base, products, and details of financing. When developing a business model, it is especially important to identify and define the company’s people, processes, technology, and customer experience. The process of business model construction and modification is also called business model innovation and forms a part of business strategy.
Why do I need a business model?
Business models are a crucial aspect of any company. It can help companies attract new talent and investors. It’s also very useful for motivating staff and higher-level leaders by giving them a sense of direction and purpose.
What do you need to add to your business model?
A quick google search on business models will turn up hundreds of different canvases and blueprints for a business model. Here are the most important things to include in yours.
People – Ensuring the right people are in the right roles, which includes coaching and training.
Key Activities- These are the most important activities in executing a company's value proposition.
Processes- Identifying current processes and acknowledging strengths and weaknesses.
Customer Experience- Understanding how a customer interacts with you and your business.
Technology- Identifying what current technologies you utilize and making room for future developments.
Value Proposition- The collection of products and services a business offers to meet the needs of its customers. It provides value through various elements such as performance, design, price, and risk reduction.
Revenue Streams- The way a company makes income from each customer segment.
Cost Structure- Describes the most important monetary consequences while operating under different business models.
These are all brief descriptions of how to identify and define each segment of your business model. If any seem too hard to define for your company, working with a team of experts is a simple solution to get your business model mapped out.
So, I mapped out my business model – is that it?
Business models constantly need to be updated and advanced, or a business will have trouble anticipating new trends and challenges that could appear. How people are doing business is constantly changing, and a business model must reflect that. One crucial example of this is technology. Business models need to incorporate all the latest technological advancements to avoid a business becoming out of date. Processes and customer experience are the same. Business processes and how customers are utilizing businesses changes all the time. We saw many changes in business practices during 2020, and we will only see more as the world gets more digitally advanced.
Want to get it right the first time? Work with experts.
Working with a team whose proficient in business models and current business trends is the best way to capture everything necessary into your business model. It is also the best way to ensure your business model stays up to date on current and future trends in business processes and technology.
About the author:
Cornerstone Paradigm Consulting, LLC an industry-agnostic business operations consulting firm, going beyond the symptoms and getting to the root cause of business issues.