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Is your business model strong enough?

I believe that nowadays there is a global competition on business models. And it is strictly important to constantly research your market to understand how better adjust your business and improve the business model.

First step would be to understand it, and to write down. Generally, a good thing is to understand your UTP — unique trade proposal, which will become the first step in understanding of your business model.

The business model itself is a phrase, describing on how you earn money. For example, the business model of supermarket is to produce and resell goods from wholesalers on retail basis, (as far as modern supermarkets are verticals with manufacturing and even own fields and crops).

What is the business model of your startup?

Thinks about the following questions, and you will have some ideas:

How do you plan to earn money?

Who pays for what?

Why you will be paid?

What is your unique trade proposal (UTP)?

Is it bad if you have a weak business model? — I believe no. A lot of early companies start their life with weak business model, while they do not clearly understand how they will earn.

The sign, that you have a weak business model is constant lack of sales. So the main problem of your business is lack of sales. On the contrary — a good business model is when you have more orders, that you can supply (produce, sell, deliver etc). So if your main problem is “how to produce and deliver” rather than “how to sell” — the business model is OK here.

If you noticed, that you have probably a weak business model, don’t panic. Just research the market and your buyers, and make hypotheses on how to better suite their needs. A lead generation can become a part of this process.

A common mistake here is that company owners try to push on sales, rather than research and improve their business.

My agency sometimes helps to make user acquisition campaigns, where we approach potential users and research their needs. Question and answer online sessions are good, to understand how potential clients behave and how they see your business.

Talk to your clients before they buy and after they buy, and if you are zealous and positive, your company will find the right path.