what is a business model

What is a Business Model?

A business model is something you create for yourself in the primary phase of starting a business – in other words the “blue print” of your business. It helps clarify that you have a product or idea that people are interested in and are willing to buy. A business model also helps identify who your potential customers are and how your business will operate.

Why Use a Business Model? Too often business owners start a business without taking the time to map out each area that will allow them to run and operate a successful business. By working out a business model you are forced to focus on creating a product that meets your customers’ needs, revenue strategies, costs, margins, distribution strategies etc. If done properly, it will reduce your chance of failure.

what is a business modelThe Business Model Canvas

This is a strategic management and entrepreneurial tool created by Osterwalder & Pigneur. Here are the nine different segments of the Business Model Canvas to help you design yours:

1)      Value Proposition: What needs are you trying to meet?

2)      Customer Segments: What type of customer relationships do you need to build? Will they be low touch or high touch or in between? 3)      Channels: Which channels are available to create awareness around your product or service?

4)      Customer Relationships: How will you create demand?

5)      Key Activities: What things need to happen to get the wheels of the business turning? Think of everything here, from office to website. 6)      Resources: This includes looking at suppliers, commodities and funding.what is a business model

7)      Partners / Stakeholders: Accounting, bookkeeping and legal as well as platforms that can work symbiotically with your business. 8)      Cost Structure: Where will your business operate? Will you need a laptop? What kind? Your Business Model needs to include all these potential overheads.

9)      Revenue Streams: Consider your different revenue streams. Don’t focus on price, but rather look at how people will buy and how to monetise.

Online Resources https://strategyzer.com/canvas/business-model-canvas

Recommended Business Model Tool to Use The Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers is detailed and provides you with a template, as well as questions to guide and assist you to develop and map out your business model.

For a secondary analysis on creating a disruptive Business Model read this great article on A New Approach to Business Model Innovation and feel free to contact us if you need any encouragement or advice.

Contact: Nokwazi Mzobe, Founder at Matoyana

Email: nokwazi@matoyana.co.za

Matoyana Business Solutions is a boutique business consulting company located in Johannesburg, South Africa. It is targeted at start-ups, small and medium enterprises across Africa.

Facebook Twitter LinkedIn

12 Views

Our Tagline

We believe in making entrepreneurial knowledge accessible, so people can solve their own problems and create their own opportunities.

Contact Us

22 Sloane Street, Bryanston, Sandton
+27 76 872 2599
Monday - Friday: 08:00 - 17:00

Subscribe Now

Subscribe to our latest news to be updated, we promise not to spam!

 
css.php