More often than you might think, a business operates for years, without a real working business model. Quite often, successfully. But if you’re running a business, you should know how to create a business model, for the business you’re operating.
How To Create A Business Model
By Jan Verhoeff
Could a stranger enter your office and operate your business? They could if you have a business plan that defines each step of your business process. Create one by using a simple business template that provides actual business processes.
Start with an outline of what you do each season of business.
Sell Product or Services
Define your product or services within a pictorial scale, including price, value, and description of what each entails. Give your products names that identify, define, and value the individual product or service, and then put them in your product or service journal.
Define Niche Market
Identify your buyers. Who are they? How much will they spend? How often will they buy? Will they return for more product? Are you going to meet them personally, or online? Will your buyers come to you, or do you take your sales to them?
Select Payment Options
How will you be paid for products and services? What finance plans will be available? Decide how you will accept payment and whether your accounting program will be cash or accrual. Will you send invoices, statements, and other billing options? How will you communicate collections?
How Product is Delivered
One of my favorite sections of the business model is the product section. We get to define our product, decide how it’s produced, and how to deliver our products. Some products are easy to figure out, others require a bit of finesse.
I specifically remember one product that included ordering a mass production from an auto-supply company, ordering boxes, and then spending hours inserting products in boxes, then shipping them out via USPS at the end of each day. Labeling because my most difficult problem. With each order I was downloading labels for shipping. After one particularly grueling week of shipping hundreds of boxes, my daughter found a “drop shipper” who did all the shipping.
We simplified our Business Strategic Model, increased our profit, and cut a huge chunk of labor off the shipping process.
The delivery model offers you a selection of methods for delivering not only one product, but several products. You can drop ship some, while personally shipping others, and some can even be digitally transferred. The key is to have a plan and know what happens with each product grouping.
Service Delivery Options
Another key component of your business is the overall development and delivery of services relevant to the end game of business transactions. Every business has a certain number of services, but determining how those are performed, delivered, and completed is part of the overall sales model.
Functional Business Models can be as complete or as circumspect as you wish them to be, but for more automated systems, or for systems that are operated by non-owner entities, the more complete the Model, the easier it is to hire assistants to complete the work.
Creatively put as much effort into your Business Strategy as you expect to get out of it. The better it is written the more effective it will be.
Score Cards and A Book of Procedures might be important with your Business Model. These offer simplified methods of business, and distinctive directions and procedures for each segment of business.
If your business plan needs some attention, you might want to contact a consultant.
A business consultant can help you to construct an effective Business Plan for your business and teach you how to apply the rules. Contact Jan Verhoeff at http://janverhoeff.com for a better view of business plan development.