7 Important Points Your Business Model Needs Your small business or start up company is ready to make the leap into national or international exposure. However, you need the support of a good venture capital firm in order to get the funding necessary for such a momentous effort. Not only do you need a spotless and polished business plan, but you need a business model that shows your potential funding source just how your company produces and sells your product. A business model is the framework or method by which your business will sustain itself in producing and selling a product or service. While production requires infrastructure issues that are too numerous to overview in this article, there are seven important product-related issues that you should have in place when you go before a VC group with a request for financing. 1. Target Customers How will you find your customers? How will your customers find you? These are important questions to know about reaching your target consumer. You need to know your target consumers demographic and how best to reach them, whether it is internet, television, radio, magazine or newspaper ads. 2. Product Differentiation The basic question here is: what make your product so special? Every other company in the industry is touting the latest widget that looks just like yours. What innovation and added value does your product have that sets it apart from the competition? Note and highlight this in your business model. 3. Pricing Based Upon Economic Models What methods did you use in determining a price for your product or service? Pricing is a careful balance of the economic equation of supply and demand. If you price too low or too high, customers may not demand your product. You need to determine a price that is not too low so that you make a profit, and not too high that turns customers away. 4. Innovative Marketing Selling your product requires innovation itself. Will you depend on advertising to sell your product? Or will you have a sales team that sells face-to-face with your customers? You need to determine how best to sell your product and use the right marketing mix and techniques. 5. Distribution Strategy Your distribution is how you get your product in the hands of your consumers. Will you run your own retail store? Do you plan to distribute to other retailers through distribution houses? Will you sell business-to-business? 6. Customer Support and Service Your business needs a way for your customers to contact you with questions and help with your product or service. Can they reach you by phone? Via internet website support? Have a system in place that is ready to take on customers’ needs after you’ve sold your product to them. 7. Customer Satisfaction And finally, how will you transform target consumers into loyal customers? One of the best business marketing techniques is word-of-mouth. Gather a loyal following of customers who come back again and again and tell their friends, and your business can grow exponentially in contrast to regular marketing. Offer satisfaction guarantees. Do what it takes to get a loyal following and your business will grow and thrive. All venture capital firms want to see that your business model is sustainable and practical. Before you step into the presentation room, make sure these seven elements of your business model are well analyzed.
Posted on: Tue, 01 Jul 2014 15:36:19 +0000
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