This is Innovate UK’s 9th installment of the essential business tips and advice series. This video covers tips on what you need to think about when defining your business model.
Your business model will make or break your start-up. The better your model, the more likely you are to succeed. It defines the way you will generate revenue and make a profit, providing the foundations for success and longevity. Here are our essential tips for defining your business model.
Tip 1 - Cover all areas of your business
Your business idea will be based on providing a solution to a problem, an answer to a need. Your USP sets your product or service apart, but your business model describes how you will create, deliver and capture value from that USP, as well as clearly defining your market.
You’ll need to cover all areas of the business – from premises to staffing, and from health and safety to IT infrastructure.
Tip 2 - Use templates
A great way to ensure you cover all the key elements of a business model is to use a tried and tested template or toolkit. There are several online, including the widely used Business Model Canvas.
Templates offer a complete, structured work-through on all areas of your business, enabling you to refine your model and present it clearly.
There’s also plenty of online advice for start-ups, covering the key elements you need to consider when shaping your business.
For younger entrepreneurs, the Prince’s Trust offers a range of business planning tools and advice.
Tip 3 - Validate early
Don’t underestimate the importance of validating and testing your ideas. Before launching your business, contact some of your target market and ask them some questions. When you talk to real people (not just friends and family, who are always more likely to be complimentary about your ideas), you can test your idea in the real world. Do your potential customers find it valuable and would they be willing to pay for it.
You need to see things from your customers’ perspective. Why would they buy your product or service? Ask them what their biggest issue, obstacle or need is – what you’re offering might be good but it might not solve their problem, or they might have a bigger need that you could help them with.
Tip 4 - Continuously refine your model
View your business model as a work in progress and refine it continuously, learning from day to day operations. Adapt it to meet changing marketing conditions, customer needs and competitor challenges.
View the other videos in our Essentials series for startups here: https://www.youtube.com/watch?v=RVskQnAiqnc&list=PLrMOhOrmeR6nlRxAZQTqPXraZ7e7ZavFc
Take a look at the Innovate UK success stories here: https://www.youtube.com/watch?v=VIOhloXRq2E&list=PLrMOhOrmeR6lMh1j4Qz_csh_3ljSrDZpj
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