How do you improve your business model?, Entrepreneurs

The business model (BM) or economic model translates the value creation mechanism of the new business, which can be expressed as follows: : “How to generate revenue and profitability from this idea and with the intended means? » It is the central part of the business plan which proves that the project is viable and can go from a project state to a business state.

Objective

Explain how the new business will bring value to all stakeholders (creator, partners or shareholders, employees, business angels, bankers) to succeed. Its proposal must be clear: the economic model must be based on a decisive, sustainable and defensible competitive advantage. Generally, ideas that are judged “simple” a posteriori are the best! The initial economic model must be designed to evolve over time and expand the offering to reach new customers.

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The business plan is based on the business model. The promise of the offer must present one or two convincing arguments, the famous competitive advantages: the price, the deadline, the level of quality, the after-sales service, the amplitude of the opening of a company to the customers and the level of profitability, the capital gain from the exit of the capital for an investor. A new company that would propose to offer too many benefits at the same time would not be credible!

How to use this handy sheet ?

Step
* Compare the results documentary studies with the field study to find convergence points.
* Determine final positioning of the company compared to competing offers, highlighting competitive advantages.
* Imagine ways to generate income for the first year and the following years (the economic model).
* Write BM: the definition must be short, precise and competitive. It will also provide an opportunity for communication about the project. Thus the BM (or its summary) will be found in the Executive Summary.

Method and advice

* Write the BM with the customers in mind, i.e. “what is it for” and not “how does it work”, which should not be revealed at this time.
* Provide significant value to customers (the
“several customers”).
* Using a diagram can help clarify the BM.
* The Internet and new technologies are influencing new BMs, allowing to offer highly targeted offers (onetoone), to reach micro-niches around the world, to choose new pricing methods (in use) and new financial models (cost pooling ).
* Expose BM to the exercise ofelevator space. Even if you are not looking for a partner, this exercise is excellent. It requires brevity and avoids getting lost in technical or anecdotal meanderings.



The business model in question

How to become more efficient?

Three main principles to define BM:

Focus your promise on what you know how to do best and that represents real value to the customer
Zara rests on one fast fashion business model. The company offers a large number of collections, therefore a renewal of frequent items, a proximity between the place of production and marketing, which allows reactivity: 15 days is enough to design a collection, manufacture it and put it on the shelves.
Ikea and control of the value chain. Cost control is at every level of the chain: in-house design, centralized purchasing from 2,000 suppliers and customer involvement to reduce costs (selection, transport, assembly of furniture).
The result is clear: In France, prices are 20% to 30% lower than those of competitors, and the company achieves twice the revenue per square meters with an often higher margin; and has been for 20 years.

Focus your promise on a target of highly identified customers. Niche markets offer great opportunities in times of crisis
Idmalus.com

1. comparator at the service of “malussés”, drivers with multiple claims on their credit. The message is clear!
MyConcierge
Private or corporate concierge services allow employees of these companies to consider time to concentrate on their tasks. Client companies outsource certain requests (renewal of administrative paperwork, reservations, car washes, etc.) to these specialized companies.
Mom & Babe
This concept allows mothers and their child to go to a hair and beauty salon while relaxing. Your child will be looked after at attractive prices during this time. The idea for this designer came when she saw her loved ones overwhelmed by small children and unable to care for them.
Yariv Abehsera created Travelfactory in 1999 to offer stays and weekends tailored specifically for students under the Golden Voyage brand. In 2002 he founded Golden Events, an operational marketing agency specializing in student targeting. In 2005, he launched the Internet portal Travelski. In 2010, the group is a specialist and leader in online travel and organization of group stays.

Focus its promise on a high utility value in the eyes of customers
iPhone from Apple promises to make life simpler and more cheerful thanks to its many uses. In return, the consumer is ready to pay the price accordingly.
The brand of frozen products picard enjoys a strong image with the public because, in addition to value for money, it allows you to improvise dinners without spending hours cooking.

Example of low-cost BM



Low cost business model

Low cost is a concept based on standardization and simplification of production and marketing processes for products and services. In this way, it makes it possible to sell at a low price.
Features of low cost business model:
— standardization of the offer (reduced scope);
— limited services (only the basic service, the others are paid);
— simplified distribution (direct sales, internet);
— staff flexibility, usually multi-skilled;
— very strict management control (cost hunting).
The most significant examples are Ryanair, EasyJet and Hotel Formel 1. ■

Advantage

■ Clarify your business in order to focus your activity on your “core business” (core business) and delegate the rest.
■ Communicate your project in strategic terms.
■ Get agreement and support from business partners.

Precautions to take

■ Do not use technical or overly specialized jargon, use simple words.


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