The 21st Century Business: What You Need to Know before Starting a Business
Ibadan is a fast growing commercial city with a huge market size for any kind of business to thrive, ranging from the local business to the global size business.
However, startups need to understand the secret of sustaining businesses in this 21st century, the pace of doing business has passed the conventional way.
As popularly believed, Lack of capital has been seen to be the major challenge of start-ups but contrary, it has been discovered that ‘inability to create Market need’ has been rated as the top challenge according to CB-Insights, 2018 ((https://www.cbinsights.com/research/startup-failure-reasons-top/)
Understanding how to recognize or create Market need, starts with creating a Business Model for your Business.
First, what is a Business Model?
It is the company’s plan that explains what products or services they manufacture or market; also how they will generate revenue and profits into the business.
According to Harvard Business Review, Business model answers the questions of ‘Who is the customer, what the customer value also answers the question on How to make money in the business and other business processes.
A business model is a layout of step-by-step action plan to operate a business profitably within a specific market niche. Business Model defers with regards with the type of business yet using the same principle, for instance, the business model for Photography is significantly different from a restaurant.
Writing a Business model starts with identifying Business Value Proposition, which is simply a statement that projects products or service to be offered to potential customers or clients with the unique selling point (USP) in view. It also includes:
- Start-up Costs
- Source of Finance (Equity or Debts)
- Target Customer/Client Base
- Marketing Strategy
- Market Competitor
- Business Revenue
- Business expenses
- Partnership possibility
Many businesses stopped existing the moment their founders died or something happened due to lack of structure which can be carried on by anyone coming into the business; however, business model helps to create sustainability structure.
An easy template for writing a business model is through The Business Model Canvas, it consists of nine (9) business highlights which is specific to your type of business.
- Key Partners; These are the supply chain of materials and also the distributor chain for the designed products and services.
- Key Activities:- This has to do with the ways of executing the value proposition already coined out for the business. For example, a cake Bakery, the key activities include creating channels for distribution of cakes around town.
- Key resources: These are the resources needed to create the proposed values to potential customers; usually the company’s assets which could be physical, human, financial and intellectual resources.
- Value proposition; The products and services a business offers to meet its customers; this has to with what distinguishes a brand from its competitive brands.
- Customer Relationship: Every business must understand that the essence of starting a business is to satisfy customers and to attract customers.
- Customer Segments: This is the segmentation of customers based on their needs, which could be either mass-market, Niche Market etc.
- Channels: These are designed channels to deliver value propositions to targeted customers, which must be designed to be fast, efficient and cost-effective.
- Cost Structure: These describe the financial plan of the business covering the
- Revenue streams: The ways a business generate profits from the products and services offered to customers/clients.