A business model refers to how you conduct your business operations. It is a massive part of your overall business plan, which you develop before starting or implementing your planned business strategies.
When you are in the initial phase of the business model development, you will likely miss out on specific areas to grow your business. These areas are related to business expansion, which can only work correctly once you build your business model.
What is Business Model?
A business model relates to a company or an organization making a profit. It showcases the products and services to sell, the target market, and potential expenses. Business models are essential for new and established businesses because they enable companies to attract investment, recruit talent, and influence management.
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Successful businesses must regularly update their different business models, or they will be unable to keep up with the marketing trends or overcome the challenges ahead. Common business models enable businesses to evaluate companies they are interested in.
A business model is about operating a business profitably in a particular marketplace. A value proposition is a vital model component that describes the goods and services the companies provide to their customers. The provided customer service must differentiate the products and services from their competitors.
Here are the aspects that a standard business model possesses:
- Projected startup costs and financial resources
- Target customer base
- Marketing strategy
- Review of the competition
- Projection of revenues and costs
Best Business Models in 2022
1) Subscription Business
Instead of selling products and services randomly, subscription companies provide an ongoing service model, which enables business owners to build an intimate understanding with their customers. For example, let's compare Netflix and Disney, two of the world's biggest content-creating companies. Disney produces a movie and brings it to the cinema. They don't care about the public feedback or how many people watched it.
Image taken from Netflix
On the other hand, Netflix closely connects with the customers as they understand how many people have streamed their movies or series. Moreover, they would know how many people have stopped watching a movie midway and started watching something else.
2) Social, Authentic Business
Corporate business models are evolving with time in terms of hierarchies, silos, and endless formal meetings. Nowadays, people want to learn more about the brand and connect with the business plans.
There was a time when business owners and employees were not allowed to discuss business matters outside of work. However, this has become an outdated way of operating and is not recommended by any business owners worldwide.
Nowadays, businesses share their viewpoints and stand by their values. Usually, the administrators are active on social media, and the employees tend to be brand ambassadors. Moreover, the brand has an excellent social media presence, with a brand message connecting with the target audience.
3) Customer-Value Obsessed Business
As you can imagine, this is a business model focused on solving customers' queries, anticipating problems, removing any hassle, and achieving peace of mind.
Stitch Fix is a fantastic example of a customer-value-obsessed business, where users fill out a questionnaire and explain their size and style preferences. Then, by using artificial intelligence (AI), the system determines what will fit and suit a customer. Finally, a personal stylist will choose the best preference from that selected list of clothes, and the perfect dresses will arrive at your doorstep every month. Hence, you will no longer need to go shopping in packed shopping centers, try clothes in changing rooms, or order products you eventually realize are unavailable in the store.
4) Data-Driven Business
Nowadays, smart companies have understood that data is one of the most critical business assets. Established organizations promote a data culture where the importance of information is recognized at every business level. Moreover, the decisions regarding the business are based on data rather than assumptions. A data-based business model understands the present condition and uses this information to refine operations and make better revenue streams. Companies focused on data can evolve quickly, which is not the case with other business models.
5) Constant-Innovation Business
Since you are a business owner, you must understand evolution is crucial to a business's success. However, growth is not fast these days and has become constant. Some of the best business models are constantly evolving, even if it means improving their product line extension or creating something new. For example, Apple introduced the iPod, which many people use for listening to music while traveling. Eventually, the company killed the idea of having a separate device.
Elements of the Best Business Models
Creating a business model isn't just about influencing your business plan or determining which products to pursue. It is also about creating value for your customers and ensuring that they trust your business. Here are the elements you need to highlight for building a quality business model:
1) Identify target audience: Targeting audiences doesn't mean you hone in on customers who want to look into your products and services. Instead, the best business models narrow their audiences to two or three buyer personas. Being a business owner, you must highlight every persona's demographics, common challenges, and solutions offered by your company. For example, Home Depot might carry a product an average person needs, but the company's target market is builders and homeowners.
2) Establish business processes: Before a business becomes exclusive, business owners must understand the activities required to make a business model work. You must identify the critical business activities by understanding the core aspects of your business' offerings.
3) Record essential business resources: Since you are the business owner, you must ask yourself what your company needs to carry out daily processes, attract new audiences and reach business goals. Identify essential business resources to ensure you prepare your business model to sustain your business needs. For example, a business website, capital, and warehouses contribute to the overall business resources.
4) Build a strong value proposition: As a business owner, you must determine how your business will stand out over the rest of the competition. For example, are you providing a revolutionary product or adding slight tweaks to the old versions? Understanding what your business offers and how it is better than your competitors' offerings help in building a strong value proposition. Once you define your value propositions, you must link them to every service and product delivery system to determine how you maintain your integrity within the customers' eyes.
5) Determine key business partners: In today's day and age, no business can work successfully or reach established goals without having trustworthy partners. A partnership is essential to business plans because it contributes to the business's ability to serve customers adequately. Therefore, when you build a business model, you must highlight critical partners, such as suppliers, strategic alliances, and advertising partners. If we talk about the previously discussed example, i.e., Home Depot, the business partners can be lumber suppliers and parts wholesalers.
6) Create a demand generation strategy: Unless you are targeting a radical approach to launch your organization, you must develop a strategy that attracts clients toward your business, generates leads, and increases online sales. For example, how will customers recognize you in the digital industry? How will customers get involved in your business plans after identifying your brand? Building a demand generation strategy enables you to create a blueprint of the customer's journey while highlighting the critical influencers for taking action.
7) Leave room for innovation: When launching an organization or building a business model, your business plan would be based on many estimations. However, until you start welcoming your customers, you will not know whether your business model will meet their current needs. Therefore, it is essential to leave room for innovations and not make your initial plan a static document. Instead, you must review your action plans regularly and implement changes when needed.
Strikingly as a Common Business Model
If you want to build a professional website for your business, you don't need to look further than Strikingly. Strikingly is a top-notch website builder that provides you with all the necessary features to bring a professional look to your business website. For example, you can add a simple store section to your eCommerce website.
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The most significant benefit of building a website on Strikingly is that the development phase is straightforward. You don't need to invest massively in a professional web developer to get you through the website development. Instead, we provide our users with a drag-and-drop feature, enabling them to assemble their website elements according to their business models.
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After building your website, you can implement some of the best business models on Strikingly. We provide our users with all the technical support while building your website and provide you with ready-made website templates to create a quality website design.
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Strikingly is the best example of a freemium business model today. By registering for a free account on our platform, you will be on our free plan. The free plan enables you to build a business website with all the fundamental features to showcase your products and services. However, if the users want to add advanced features to their business website, such as adding site memberships or having extra bandwidth, they must upgrade to our Pro Plan.
Highly established companies have understood that they must prioritize the customers' needs to guarantee success. Therefore, you must know your customer demands to build a successful business model.
If you look into different business models, they change how your business works and even determine whether it will be a hit. Therefore, you must always try to look into ways to deliver value to your customers and try not to think out of the box.
The simplest way of delivering quality customer service is by building a quality business website on Strikingly. If you cannot develop your business website or integrate our website features, you can contact our Happiness Officers and submit your queries. Being an entrepreneur, you must choose the best business model and ensure business growth.