Welcome back! In our last post, we covered the first step in developing a new business - business discovery. Now that you have a better understanding of your business landscape and what opportunities exist, it's time to start refining your ideas into a more structured and sellable offering. In this post, we'll cover items such as determining who your key partners are, your businesses key resources and activities that will contribute to your success. You will also determine how you will manage communication and relationships with your customers as well as through which channels you will interact with them on a number of levels. Let's get started!
Business Model Cavas
The business model canvas is a tool that can be used to help you refine and structure your business ideas. It consists of a set of different components or building blocks, which are organized into nine distinct categories. These categories include key partners, resources and activities, as well as customer segments and revenue streams. The business model canvas can be found online or in various books and guides on entrepreneurship and business development. To use this tool effectively, it is important to spend time carefully evaluating each component and determining how they will fit together to create your new business idea. Below are a few of the elements that the canvas covers.
In order for your business to be successful, you will need to identify and cultivate key partnerships. These are relationships with other businesses or individuals that are essential to your success. For example, if you are starting a new tech company, you may need to partner with a software development firm in order to create your product. Or, if you are starting a new restaurant, you may need to partner with a food supplier in order to get the ingredients you need. Whatever the case may be, it is important to identify these key partnerships early on so that you can begin building these relationships in the next step, Business Creation.
Key Resources and Activities
Another important part of business ideation is identifying your key resources and activities. These are the things that you need in order to make your business run smoothly and successfully. For example, if you are starting an online store, some of your key resources may include a website domain, hosting, a payment processor, etc. And some of your key activities may include marketing, product fulfilment, customer service, etc. By identifying these key resources and activities early on, you can make sure that you have everything in place before launching your business.
One of the most important aspects of business ideation is customer segmentation. This is the process of dividing up your target market into smaller groups based on factors such as demographics, psychographics, needs, etc. This is important because it allows you to create targeted marketing campaigns that are more likely to resonate with each individual group. It also allows you to tailor your products and services to better meet the needs of each group. So if you haven't already started segmenting your target market, now is the time!
Last but not least, another important part of business ideation is determining how you will generate revenue. This means figuring out how much money each customer is worth to your business and what they are willing to pay for your products or services. There are a number of different revenue models out there, so it's important to do some research and figure out which one makes the most sense for your business.
There are a number of different types of revenue streams that are used in businesses, each with their own advantages and challenges. Some of the most common include:
1. Product-based revenue streams, where a company sells physical goods or services to customers. This type of revenue stream can be highly profitable if the product or service is in high demand, but it can also be difficult to maintain consistent sales over time.
2. Service-based revenue streams involve providing specialized services to customers, such as consulting or data analysis. This type of revenue stream may be less risky than selling products, as it typically requires less upfront investment and has more predictable income patterns over time.
3. Affiliate marketing is another popular form of revenue generation in businesses. In this model, businesses enter into partnerships with other companies that promote their products or services to their existing customer base. While affiliate marketing can be a lucrative source of passive income for businesses, it can also require significant time and effort to build lasting relationships with other companies and develop effective promotional strategies.
4. Finally, many businesses choose to generate revenue through advertising or sponsorship arrangements with other companies or brands. This approach can be a great way to reach new audiences and expand your customer base, but it often requires significant financial investments up front and may not generate immediate returns on investment.
Once you have determined this, you can start planning how much money you need to bring in each month/year in order to be profitable.
As you can see, there is a lot that goes into the business ideation process! But don't let that overwhelm you - remember that this is just the second step in a five-step journey. And by taking things one step at a time, you increase your chances of success exponentially. So take some time this week to work on steps two through four (we'll cover step five next week), and before you know it you'll have all the pieces in place for a successful launch!