Four Steps to Writing a Good Business Model

Tara Duggan reports:

"Developing a business model typically entails describing how your company operates. Writing a good business model involves answering questions about your company’s customers and product[s] or services, as well as its marketing and distribution strategies. In addition, the model should list the roles and responsibilities of employees in achieving these goals. Analyze your organizational structures and modify them regularly to maintain a competitive edge in today’s dynamic marketplace...Gather a team of people from different parts of your business to describe your current or proposed operations. Start with a brainstorming activity. Draw a picture of how your business operates on a flip chart or white board. Draw circles, label them and then connect the circles with arrows to show the interrelationships...Download a template or develop your own format for documenting your business model. For example, use the business model calculator template provided by the Microsoft Office Templates website to record your team’s answers to questions about financial, customer and sales aspects of your business. Your model can also include details about different groups of customers and how your products or services provide value to them. List the costs incurred to run your business, including materials, employees and production expenses. List the partners and suppliers you work with to achieve your strategic goals...Analyze your options. Choose a traditional 'bricks and mortar' operational business model where customers come to your store to buy products or services if your customers are local to you. If your target market is more geographically diverse, select a different approach, such as using the Internet to allow customers to order products and get them shipped to their location. Decide how to use your company resources to provide valuable products and services while maintaining a profitable business. Identify opportunities for acquiring new customers or partners. Isolate weaknesses and potential risks or threats...Improve your business model by identifying more ways of providing valuable products or services to customers. Add information about potential new customers, additional value your company can provide, untapped distribution channels and customer relationships you can leverage to gain new business. List potential revenue streams. Describe how you manage resources, procedures, partners and costs. Add statistical information to your business model from the U.S. Department of Commerce to show the general industry outlook."