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How to develop your Business Model?

How to develop your Business Model?


There are multiple ways to make your business profitable. The vocation of the business model is to specify the strategy to create value for the client as well as for your company. Here's how.

How to develop your Business Model

What is the business model? 

It outlines the strategy that you will follow in order to create value for your customers and gain profits from your activity: from the products and services marketed, the method of making the offer available, the market addressed, the choice of communication channels and type of customer relationship. 

You can summarize your business model with a sentence like: " Our business is to sell ... to customers who are looking for ... via the channel ... and we make money from ... "

Difference between Business model and business plan

The development of the business model takes a central place in the strategy and financial forecast of the business creator.

Startups are very often looking for innovative economic models in line with their products and services, themselves breaking away from the competition or what may exist on the market (see the Blue Ocean strategy).

In fact, a good number of start-ups start before they have even found their business model. They create value for users but do not know how to profit from them.

The definition of the business model, closely linked to the strategy, is a key phase in the design of a business plan but does not replace it. The latter gives an overview of the project, from the founding team to the launch of the company. 

What is the "business model canvas"?

It is a methodological approach inviting to reflect on different dials in order to build an innovative economic model: 
  1. key resources
  2. customer segments 
  3. customer relations 
  4. value propositions 
  5. Key partners
  6. income stream
  7. cost of the structure. 
  8. key activities
The founder of this method, Alex Osterwalder, offers a book and a site to implement the model.

How to define a business model?

Whether your business is on the Internet or in real life, defining the business model involves asking the right questions:

What is the client's problem or intention?


This is the entry point for your analysis. You must clearly identify "what is the problem with the client you are targeting", "What does it cost him in terms of money, time, effort, etc.?" "What are its characteristics, behaviors, habits?" In short, this is a real study to be carried out.

What solutions are your clients currently using to solve their problems?


This amounts to studying the services and products that your customers buy, in what way? Via which channels? How? 'Or' What? 

What competitive and profitable response can you provide? 

A competitive offer:

The first question to ask yourself is how to do better than your competitors or how to do it differently in terms of products, services, availability, costs, selling prices, etc. 

For example: by delivering personalized products where only standard products are sold, by offering a subscription when an article is generally sold individually, etc. 

Do not hesitate to get inspired by solutions implemented in similar - or even radically different - sectors. 

For example, an innovative delivery method compared to existing solutions. 

New technologies and the internet generate large opportunities for innovation, take advantage of them! 

Important: This is the value that you will bring to customers through your offer, also called "value proposition". 

A profitable offer:

This general question involves an internal analysis of the structure of your costs, turnover and the margin generated. Fixed costs limit the room for maneuver and expose companies to the risk of bankruptcy in the event of a fall in turnover. 

The right strategy is to seek an economic structure that promotes flexibility. A fundamental trend with the development of outsourcing, especially freelancers. However, be careful to keep the key constructive elements of your competitive differentiation internally or to retain control in one way or another.

Note: the company can be remunerated on the sale of its products, the sale of its services, the financial products generated by a delay between the payments of customers and those of suppliers, etc. Note that if the company is in liquidation, this information must be visible. 

Examples of business models 

Here are some known models: 

For online activities: 
  1. Auctions: sale of a product or service to the highest bidder after various auctions. 
  2. Subscription: the supplier gives access to services (software, documents, etc.) against the subscription to a paid subscription (annual, monthly, etc.). 
  3. Market place: linking suppliers and customers. Income generally comes from commissions drawn on sales. 
  4. Freemium: users have access to a free offer, but can subscribe to an additional premium paid services. 
  5. Affiliation: income is derived from a commission following registration on a form, from the sale of a product, from service after clicking on an advertisement (banners, sponsored links) positioned on a website, in an email, etc. 
  6. Advertising: used by publishers of websites and free newspapers, this model is based on funding linked to the display of advertisements. 
  7. Bricks and Clicks: the website serves as a showcase to lure customers and encourage them to come to the store.
Other examples of business models for any type of industry: 
Printer model: revenues come from consumables or peripheral accessories sold around the main product. The latter is generally sold at a low price. This is the case of printers (hence the name), sold at bargain prices, the manufacturers generating their turnover and their income from the sale of cartridges. 

  1. Franchise: the franchisee, against the payment of royalties, relies on the know-how and the brand image of the franchisor to exploit a market. 
  2. Low cost: sale of a product or service at a low cost. The strategy is to drastically lower production costs by reducing ancillary services. The case study is Easyjet. 
  3. Home sales: direct sales to consumers during meetings (the famous Tupperware device ...) or not. Cosmetics, lingerie, children's clothing ... many sectors use this type of distribution. 
  4. Disintermediation: direct sale instead of going through intermediaries like wholesalers. This is the path taken in particular by an increasing number of farmers who prefer to sell their products directly to end consumers. 
Don't let your guard down, regularly question your business model 


Even if your business is not a startup - but rather a business that can be described as "traditional", it is important to analyze your model in depth in order to improve the performance of your activity. 

 But also to secure it by anticipating the appearance of a competitor armed with an offer that breaks with what is practiced. 

Example of bookshops with the appearance of online sales, taxis with the appearance of VTCs, restaurants with deliveries of premium meals to homes, etc. 

No business is really safe!

How to develop your Business Model? How to develop your Business Model? Reviewed by communication etiquette on 5:10 PM Rating: 5

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