Four Key Business Models for every new Startup.
Last week on Startup Buzz, we discussed some primary reasons why startups tend to fail. One of the factors defining it was a business model. Today we discuss Four Key Business Models for every new Startup.
What is it about? – Effectively define and design the Role of Startup –
One of the key factors behind startups not becoming successful is that they lack a business model. A business model is an essential because in trying times, it is something the startup can fall back upon. It is a sine qua non for long term development of a startup. A business model clearly explains what the startup is about, what problems it seeks to solve with its product or services. In this industry, it is not uncommon for entrepreneurs to become very linear focused and forget to develop a business model.
Play with Money – Understand the funding structure. Pitch for Plan B –
A business model bears in mind all the possible pitfalls and problems that are foreseeable when creating a startup. It thus also helps create alternatives to deal with the problems, thus reducing the possibility of making mistakes, and also being ready for when mistakes are made. A business model clearly explains what the startup is about, what problems it seeks to solve with its product or services. A Plan B is like a temporary refuge when you see things are not falling to the point. You can play with little strategy, get a mentor and pitch back again with enthusiasm.
Price Control – Create demand against other competitors by playing with Price-
In this industry, it is not uncommon for entrepreneurs to become very linear focused and forget to develop a business model. A non existent business model is as harmful as not innovating around the product with respect to the needs of the people. Entrepreneurs possess this incorrect belief that it will be easy to have customers vying for their product, yet in reality, it is not. This is a product of the development of the business model left to the very end of the startup creation process.
The whole idea behind developing a business model is to change the game from the way it is being played. For instance, cut prices of the product to gain an industry share and profit. To make your mark as a key player, and foremost, to build customers and retain them over a period of time is the primary idea behind the inception of any startup.
Survival of the fittest – Always ready to fall and rise with new ideas-
There are things one must bear in mind when creating a business model. Another company or product’s model must not be replicated. The terms on which each product functions must be given special importance and pondered upon exclusively and build accordingly. It has to be a set or model created individually for the product or service.
Align with the technology to create a product that the masses want, but to essentially sustain it- think of the business model as the spine of your product. A startup may become an instant success but to retain the success is the more difficult part because there will be hundreds of products being created every moment to meet with the customers’ every need. So to constantly change one’s business model and innovate is key.