Tips on Writing a Business Model

A business model is a system that describes how your company operates and how it creates and delivers value to its customers. Writing a business model involves answering the fundamental question about your company’s services, products, and distribution, as well as about the marketing strategies. A good plan also includes the roles of the employees and how they will help achieve the main goals. In order for a business to thrive, the executives must know how the business model works. If you are writing a business model, imagine it as a story that explains how your company operates, who is the customer and what does he value, and how that value delivered at an acceptable cost.

1. Create more prototypes

Writing a business model is one of the most important steps you take towards a successful business that will be appreciated by customers. Don’t expect to get it right the first time. It is important that you have at least five prototypes, and if possible up to ten. Gather a team of people from different departments and start with a brainstorming activity. Set up a time limit of 20 minutes for each business model prototype and use a flip chart as a visual aid. Draw a picture of how your company operates using circles connected with arrows. Show how the products are distributed, promoted and how they generate revenue.

2. Develop a vision statement

When you present your plan to potential investors, you must explain your vision statement, whether your company provides a product or a service. The vision statement must describe in a clear and concise manner what you want to accomplish. Spell out why you are starting the business and how will your services or products benefit the target audience. These questions are essential when writing a business model and when you present your business to lenders or investors.

3. Define the marketing strategy

One of the most important aspects of writing a business model is to clearly define your market strategy and how the company will accomplish it. The marketing strategy aims to draw customers and clients to your business by providing them with useful information on the products you offer. It is important to have a plan B because even the best designs can fail. Finding innovative means of reaching your goals will show that you are prepared to overcome any obstacles that may arise when presenting the model to investors.

4. Establish a financial plan

Even if you don’t know how to write a business plan, don’t get discouraged, coming up with a financial plan is not that difficult. When preparing your business model, you must have a year-long goal and financial plan. Think about how much do you need in order to pay the employees, market the product or services and lease your place of operation. Include the monthly calculations to your business plan for the projected cost your company will need in the first year.

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