If you are into entrepreneurship and globalization, you know step one in building a successful business is to learn what products or technologies your customers really need and are willing to buy. Developing the right product is hard, but what is harder is building a good business model.
Business model is like everyone talks about it all the time; everyone boasts about how well he or she is doing it; everyone thinks everyone else is doing it; almost no one really is; and the few who are are fumbling their way through it incompetently.
In fact, there’s nothing magical about a business model. It’s simply the nuts and bolts of how a business plans to generate revenue and profits. It details your long-term strategy and day-to-day operations. But when it comes time to create your business model, you do need to be realistic. The challenges differ from industry to industry, but here are seven basic components of a business model:
1. Reaching customers. You need to find them via the Internet and e-mail, or the old-fashioned way – through broadcast media, print ads, direct mail, telemarketing, or references or by cold-calling. And these potential customers are not likely to be waiting to hear from you and may not respond to you. So be sure you know how you are going to find and reach them.
2. Differentiating your product. There’s always competition, whether you realize it or not. Smart marketing executives know how to develop unique product – positioning strategies that highlight a product’s true value. You need to thoroughly understand the competition and effectively communicate the unique advantages of your product.
3. Pricing. Start by understanding how much customers value what they’re gaining from you. Then you need to estimate your total costs, analyze the competitive landscape, and map out your long-term strategy. For your company to survive, your product’s price must be greater than its overall cost.
4. Selling. Persuading customers to buy a product that they need is one of the most important skills an entrepreneur must learn (read It’s All About Selling for Survival) … continuing read Business models and Teenage Sex