Five questions to ask yourself before developing a business model

Maybe you don’t know anything about business, but your entrepreneurial project requires (logically) some level of knowledge. And in order to do so, you need to develop a business model. Is it possible to do it without having any idea about this subject? We can help you: just answer the following questions.

To develop a business model, the first thing you need to do is to find out what the DNA of your project is: describe the basis on which your company will create, provide and capture value. These five questions will be key:

What are you going to sell and with what added value? 

Meet a customer need and provide a differentiated solution compared to what the competition offers.

Who are you going to sell it to? 

Start with the most interested segment  in buying your product or service.

How to reach the customer? 

Communicate your brand message (brand messaging) to potential users and make your distribution of the product or service convenient for them.

How do I get organized? 

Make a list of requirements to design a solid and attractive value proposition (resources, partners or internal processes you will need, for example).

How to react to possible changes? 

Anticipate and define flexibility factors to adapt to what you will encounter.

Once you have established these points, you will have an idea of whether your business is viable or not; once you know this, it will be time to choose the model you want to apply. Here, three factors will influence:

1. Competitive advantage: implement a novel model that provides unique ideas that are difficult to imitate. This will make a decisive contribution to putting you ahead of your competitors.

2. Investors: try to attract their attention so that they take a look at your business model. Make clear the advantages for the user or customer, be realistic (with your idea and financial projections) and include a contingency plan. Look for an investor who will not only provide you with capital, but also guidance in the development of your project.

3. Growth plan: it is vital to try to take firm steps and not make mistakes. This is the next stage, or rather, an update of the business model; here you will have to specify the objectives of your company and the strategy it will follow to grow in the coming years. Read here how to develop one.

With all this in mind, sit down, take a deep breath and … now you have your business model ready!

Photo by Slidebean in Unsplash.