how do you set it up?

Changing your company’s business model to create more value and ensure its sustainability has become a necessity, especially for the companies hardest hit by the crisis.

In the catering sector, for example, we see the appearance of what are called dark kitchens, these restaurants without premises, dedicated exclusively to home delivery.

The chartered accountant has a real role to play in supporting his client, whether it is a project to create a business or to improve the value proposition.

The business model, or economic model in French, should not be confused with the business plan. It is a tool that describes the company’s process of creating value for itself as well as for its customers..

The main purpose of a business model is to present the financial viability of an entrepreneurial project in a clear and quick way.

To build it, you must listen to your customers’ needs first and foremost, thus avoiding the main cause of failure for entrepreneurs: A product or service that does not meet customer expectations.

For an existing company, changing its business model sometimes involves anticipating changes in its environment. Companies must therefore be more reactive in order to better adapt to variations in activity and to increasingly rapid and sometimes uncertain development.

How to create an effective business model?

The choice of a business model requires reflection and diagnosis. To complete this step and prepare your project while defining your business strategy, it is important to answer the following few questions about your business model:

  • What is the goal? Who is the product for? Who are the potential customers? ;
  • what is the offer (the products, services to be sold);
  • What is the value of the project? (to stand out from the competition and gain a competitive advantage);
  • what will the company’s positioning in its market be? ;
  • how to reach, acquire and retain the customer? ;
  • How to generate income? ;
  • what pricing strategy? Will the activity be profitable? What will the profit margin be? What will be the cost structure? ;
  • how to reach, acquire and retain the customer?

To answer these questions, it will sometimes be necessary to conduct market research.

In any case, a business model can always (and even should) be refined over time (testing what works and what doesn’t). The ideal is to arrive at a business model that offers a sufficient and, above all, interesting level of income.

For inspiration, several examples of business models are available to the company, we quote the most well-known of them:

  • freemium : the company offers a free limited service and additional paid services (premium);
  • subscription : the company offers its services in exchange for a periodic subscription;
  • peer-to-peer : the company receives an intermediary commission between customer and supplier;
  • the auction : the product is sold at auction to the person who offers the best purchase offer;
  • membership : because of its reputation, the company offers another company to sell its products or services through its website for a commission on the revenue obtained;
  • the printer model : this business model consists of selling a product at a loss or with a very low margin and then offering accessories at a higher price;
  • home sale : one of the forms of direct selling consists in a company selling its product after a direct demonstration (at home) to one or more potential buyers;
  • the low costs : it is about offering products or services at very attractive prices to attract more customers. Products and services sold based on this model are more simplistic and focus on the essentials (few accessories, few capabilities). The customer who wants to take advantage of an additional service or option must pay more to get it.

Presentation of the business model canvas

The business model canvas, invented and modeled by the Swiss Alexander Osterwalder, is a tool that makes it possible to present and formalize the company’s business model in a very simple way.. It is perfectly suited for the business creation phase or the launch of a new product or service. This graphical tool divides the company’s business model into 9 sections:

  • the value proposition : where the company must present the added value of its products or services, in particular what they allow to bring to the customer (example: delivery speed, sales price, service quality, customer experience and its satisfaction, etc.) and how it stands out from the competition;
  • customer segmentation : this involves an explanation of the customer segments to which a product or service is targeted (example: the budget of young managers between 22 and 30 years of age in a geographical area, etc.);
  • distribution channels : this involves explaining how the product or service will be sold and through which distribution channel (direct: for example on the Internet or in a physical store, or indirectly through retailers, etc.);
  • the customer relationship : it is a matter of presenting the means of communication that the company will use to reach its potential customers or retain its current customers (advertising, blog, telephone collection, after-sales service, possible returns, etc.);
  • sources of income : the essential element of the business model is to show how the company intends to make money and what its pricing policy will be (subscription, direct sales, package, rental, affiliation, etc.), how many customers the company will have, is the usual to give a positive result, etc.? ;
  • key resources : these are the necessary means that a company must implement to launch and succeed in its project, they can be classified as human resources including staff and the management team, intellectual resources such as knowledge, trademarks and patents, financial resources such as cash contributions, material resources such as equipment etc. ;
  • key partners : it is a matter of indicating the various partners of the company who will help it promote its products or services or complement its offer (prescribers, commercial partners, suppliers, subcontractors, sponsors, financial partners, etc.) as well as their costs ;
  • main activities : these are the activities that are necessary in the company for the company’s business model to function, for example IT development and marketing development, after-sales service, the supply chain, etc. ;
  • cost structure : this involves the presentation of the different costs borne by the company (fixed and variable costs, direct costs, indirect costs) for the purpose of its proper functioning.

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