Business is the name of different activities. Those are run by the entrepreneurs to generate the profit. The Business only does not generate revenue, many people do that for self esteem, respect, financial stability and also they serve the customers. A business in economy solves the problem of customers.
The first challenge of the business owner is to know the problem. After identifying the problem clearly, they can manufacture the product. That product must solve the problem. They can offer to their targeted customers. All these processes are known as the business model.
Business model contains a set of plans and strategies. These business models are designed by an organization. These models if applied properly and successfully then these generate the revenue. Businesses also solve the problems by creating value for the customers.
Business model explanation
What is business model? And what is it used for? Here we are going to explain this term in detail; we will also highlight uses of this model.
It is detailed framework, which is designed by a company to run the business activities. For example how they will attract their potential customers, and how they will create value for them. It adds up value to a company. Business model also covers the areas which are problems and challenges for the business.
There are many companies who have set business model example in past. It helps company also its managers to determine the factors that are essential. It also encourages them to gain the competitive advantage and beat the competitors. That could become a hurdle in their success.
A Business expert designs model with strategy examples. That shows how did it work in the past and how can it be used by them in the upcoming future. The Expert modifies the plan according to the nature of business. He goes through various sample business models. This matches nature of his work and can be fruitful for them in future.
What are the components of a business model?
This model must be designed in a way that it must determine target audience, objectives, plans, and strategies. This will make it possible to achieve those objectives.
Following is the list of components of the business strategy. That adds up value to it, just have a look.
The problem statements
First of all, it is necessary to identify problem. That we can solve by offering the solution in the form of product or service, once it is defined clearly, other steps become easier.
Set of solutions
After identifying the problem business person can manufacture the product. That solve that problem.
What are the key resources
The key resources are the current and fixed assets, includes, material, machinery, human, workers etc.
Advertising the product to the targeted segmentation, that segment must be unique and related to the product.
Product must be unique and new so that people willing to spend money on that.
Business model must address the long term advantage to beat the competitors.
Determine cost that can occur while running your activities and according to it plan your pricing strategy. It can be forecasted fixed and variable cost.
Make a proper framework which could help you in determining that how can you generate or optimize your profit. That can be forecasted profit and loss statement.
To make a profitable business model you need to set an example of a business model for a company, that example must be inclusive of all the above-listed components so that it can help you in keeping track of your activities. In Future, this model will help you in accelerating your performance.
Wise is one who keeps on trying; he keeps an eagle eye on every small and great matter that can affect performance of his company by any means. They try innovation and learn from mistakes which were made in past by them or others. And offer the product or service in different way.