What’s Your Story, and Why Your Business Model Matters
Your story for your business is critical to your success. Perhaps you’ve heard that “story” is crucial to your marketing – and that is true! But “story” is not only for marketing. It’s an essential building block for your business itself. As is your Business Model.
Can you describe your Business Model?
There are lots of definitions of “business model.” Some think it relates only to big corporations or tech startups. Not so. If you don’t know what it is – and what your business model is – your business is unlikely to succeed.
First, here’s a simple definition: “The story that explains how an enterprise works,” says Joan Magretta, Ph.D. of the Harvard Business School. Simple, but not easy. A more specific definition is: a design for the successful operation of a business, identifying revenue sources, customer base, products, and details of financing.
How do you design a Business Model for your business?
Working with women entrepreneurs inspires me with your passion and commitment to making a difference with your businesses. It’s sad how few have gone through the steps to develop a Business Model. It’s typically when they run into bumps in the road they reach out for help. If only they’d designed a Business Model, and had a process to iterate based on what their customers want! But it’s never too late!
We spend a fair amount of time in CEO School for Women™ working on your Business Model. It comes before strategy and a formal business plan. It isn’t complicated, but it requires a multiple step process and a clear vision.
We begin by looking at WHO your customer is and developing a customer profile (also known as a persona). As important is your Value Proposition for your product or services. Very simply, your value proposition answers the question “what solution are you bringing to your customer’s problem or need?”
A Simple Tool for designing your Business Model
We use the “Business Model Canvas” in the process of building business models in CEO School. It’s a simple tool that can be used over and over again, and one that never goes out of style. It isn’t a linear process but rather designing your Business Model has interdependent parts. And they need to be developed in a particular order.
The first time you go thorough the process can feel pretty challenging. But it gets a whole lot easier from there, once you understand the steps.
What are your Next Steps?
Whether you have a business or you’re thinking about building a business, it’s never too late to devise and define your Business Model. Or maybe you want to introduce a new product or an improved product. This process can allow you to test your hypotheses before jumping in with both feet and potentially wasting precious resources and funds.
Here are some specific steps you can take:
- Download the Business Model Canvas (it’s free)
- Read The Lean Startup by Eric Ries (This as one of my recommended 5 Books Every Entrepreneur should read before starting a business!)
- Set aside sufficient time to THINK about your customer, and get clear on
a. Who is your PRIMARY customer?
b. What do you know about that customer?
c. Interview some representatives of your target group to listen to their problems and needs
d. What problem or need does your service or business solve?
e. Write it all down!
f. Share the persona with your trusted business owner friends for their feedback
- Work on your Value Proposition, and connect it to your customer persona.
a. What is your customer’s most severe pain or need? Which are unsatisfied?
b. How does your product or service address this pain or need?
c. How does differentiate most meaningfully from competition?
d. How does your customer measure success in solving their problem or need?
e. How difficult is your product or service to copy?
- Create Revenue Streams, and Identify Key Resources, Activities, Partners, and Cost Structure
- Present your completed Business Model Canvas for feedback to your trusted business owner friends who are familiar with this process, and learn from their Business Models.
Alternatively, here’s a Do-It-Yourself “Build Your Own Business Model” online course I built explicitly for women entrepreneurs, including an online community for discussion.