Approach to Business Modelling
10 Things That Make a Great Business Model
| 1 | Keep it Simple. If it is difficult to understand, it probably won’t work |
| 2 | Reflect the Values of your organisation. The model strategy needs to be consistent with the organisations’ culture – entrepreneurial or ultra-risk averse |
| 3 | Be Scalable. Does the model work if revenues are considerably (x 10?) larger than you forecast? |
| 4 | Recognise and factor in Risk. What happens if the stock market crashes, or your market is smaller (or larger) than expected, or the product/service doesn’t work? |
| 5 | Segment your Market by customer types, and |
| 6 | Align Products/Services with market segments; what customer need is the product/service fulfilling? |
| 7 | Minimise Costs. Goes without saying, but look for ways to reduce costs by outsourcing, reducing overheads etc. |
| 8 | Optimise Revenue. Also self-evident, but the approach can have a huge impact: sell a lot of widgets at low price, or a few at a very high price. Companies like Metro that give products away can make very high revenues |
| 9 | Out distance the Competition. In today’s market competition is a way of life, so you should give some thought to how you will compete: on price, quality, or service? |
| 10 | Be Resilient – You don’t need a B-school “sustainable competitive advantage”, but you will need to survive. How? |
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