A business model is basically a diagram or description of how your business will operate. Tim Clark, a successful entrepreneur and Professor of Business Studies, together with a number of collaborators has written several books on using a Business Model Canvas, not just as a tool for business's but also a tool which can be used to explore and plan your own career.
In his books Tim explains how any Business Model can be broken down into 9 areas which make up a one page Business Model canvas.
The areas include Key Partners, Key Activities, Value Provided, Customer Relationships, Customers, Key Resources, Channels, Costs and Revenue and Benefits.
In this post I will talk about how small changes to the business model can influence the growth of a business.
The purpose of this post is to explain how small variations to a business model could help make or break a business. I'll explain some of these areas by giving examples below:
For each brick and mortar retail store, there could be thousands of different versions to their business model.
To survive in today's ever changing marketplace, business owners need to move quickly to adjust their business model to stay ahead of the competition, down the street and online.
Examples of businesses making changes to how they deliver their products ( Channels) include offering online sale and distribution services. Examples of this includes supermarkets who offer online purchasing and home delivery. Retail stores have needed to improve their online presence in order to compete with others. Many are now finding that their online sales are exceeding their in-store sales.
Food outlets and cafes are using Apps such as UberEats to reach a customer base outside of their immediate geographical location.
Examples of businesses competing against other similar business by focusing on their Value Provided area are winning over customers by offering healthier food choices such as vegan or lactose free options. MacDonalds started offering salads in wraps as they witnessed their customer base diminish as other food outlets started offering healthy alternatives.
I recently spoke with a retail assistant who told me she had just dropped off a handbag to a customer on her way home from work. She could have couriered it, however, the retail chain she works for promotes establishing excellent customer relationships as an integral part of their business model. That is where their brand differentiates themselves from other competitors.
In today's marketplace every business needs to make a concerted effort to stand out from the rest. Having a unique selling proposition will help achieve this.
An example of a business increasing it's chance of survival by forming Key Partnerships is exemplified by the artist who sells her art through her own gallery. The artist who owns their own gallery could start selling art produced by other artists on a commission basis. This would attract a wider customer base and the extra commission could help cover costs such as rates, building maintenance etc.
Internet marketers are constantly forming key partnerships with other marketing gurus in a bid to increase their customer base. They do this by aligning with these partners to do webinars or promote their products and services thereby adding to their email list.
One last example is online sellers as well as brick and mortar stores who either pay for people to share posts about their products on their Instagram accounts or offer them free product as payment for giving a shout out on to their many followers.
I have talked about business models in previous posts so today I wanted to explain just a little bit about how they can be applied.
I hope you have found this post of interest.
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