What is the business model?

Everyone in the http://www.aliyun.com/zixun/aggregation/12842.html "> Internet Circle" is talking about business models. But I bet if you take random tests on these people, you'll find that they don't understand what a business model is. Do you understand what a business model is? I asked everyone at the UC Berkeley class, but no one had a clear idea.

It can be seen that the understanding of business models is the same as the past adolescent's understanding of sexuality: everyone is talking all the time and everyone is showing off that they are doing well; everyone feels that everybody else is doing it – even though no one is really doing it;

Now let's talk about the business model. Teenage friends don't live, you need sex education from other people, because I only teach entrepreneurship and globalisation two subjects.

The first step in building a successful business is to understand what goods or technologies your customers really need. This is an iterative process, I will write another article to elaborate. A large number of technology start-ups fail because too few users buy or use their products. So don't overlook the process of validating your own creativity.

It is difficult to develop the right product, but it is more difficult to build a good business model. Fortunately, the business model itself is not magical. It simply illustrates how a business generates revenue and profits, and only adds to your long-term strategy and day-to-day operations.

Entrepreneurs tend to be overly optimistic about the profits from market share – even if it accounts for just 1% of the 1 billion-dollar market, it's lucrative. But is it really? The desire is good, but when you build your business model, you need to be realistic. The problems faced by various industries are different, but the business model has the following seven basic elements:

1, contact the user. The saying goes, "The wine is not afraid of the alley." But the reality is that even if you do it well, no one knows. Even when you know where your potential users are, it's a time-consuming and laborious task to reach out to users. You have to find them via email or the internet, or in old-fashioned ways – through radio, print ads, direct mail, telemarketing, door-to-door sales. These potential users are often unwilling to listen to you or react to what you say, so you must understand how to find and contact your potential users.

2. Differentiated products. You think you have the best product and others think your product is the best. Whether you realize it or not, competition exists forever. Smart marketers know how to promote their own unique products – positioning strategies will highlight the true value of the product. You must be in the fierce competition to effectively explain the uniqueness of their products.

3. Pricing. One of the most basic decisions you need to make is-what price you intend to set for your product or service. Free is one of the rules of Internet survival, but keep in mind that you still need to think about how to make money incrementally – you can't survive on a user scale alone. The first step in pricing is to understand how much value users derive from using your product. The next step is to estimate your total cost, analyze the competitive landscape, and plan the blueprint for your long-term strategy. In order for their company to survive, the price of the product must be greater than the cost.

4. Sales. Persuading users to buy a product they need is an important skill that every entrepreneur should have. You need to sell at every stage of the company. So you have to understand what factors can drive a successful transaction and successfully combine each step of the sale. This link needs to be considered. Of course, before all this, first test your sales strategy.

5, distribution/channel. The Internet makes distribution easier. However, for high-priced items, you need a direct sales force; For mid-range price products, you can use the franchisee's way, for low-cost products, can be sold through discount stores or network. Depending on the sales channel, you need to design a different package for your product.

6. Customer service. In addition to teaching users how to use your products, you also have to be sure that you can handle customer complaints and return requests, answer questions about the product, and listen to recommendations that are valuable to product promotion. You may need to provide consulting services to ensure that your users can successfully use your product. If your product is used by company users and has a significant impact on its business, you will need to provide 24-hour x7 days of online support.

7, to obtain user praise. The success of your business depends to a large extent on how well your product meets the needs of your users. Satisfied users will become the best sales people and buy more products from your company. Dissatisfied users will be your company's biggest burden.

In your own design business model, all of these elements need to be perfectly integrated like jigsaw puzzles. The good news is that when you're thinking about your business model, you don't have to start from scratch. You can learn directly from your competitors and other fields. Not only are those successful cases valuable, but there are also cases of failure.

As with your product innovation, you can also innovate your own business model. As experience grows, market changes are always ready to refine your innovation strategy. Like your product, innovative strategies will make your business model better.

Author: Vivek Wadhwa, original link.