A business model tells people how a business makes (or will make) money. This is especially important in today’s economic climate, as investors are very particular about where they will place their funds. If you are starting a business or are looking for new investors, BusinessWeek offers a few tips on creating a strong business model:
- Customer Value Proposition: A strong customer value proposition means your product or service helps to solve a problem or provide a benefit. Unfortunately, many companies try to mention as many benefits as possible in their business models, which can cloud the core message.
- Differentiation: Your business model should make your company stand out from the crowd. For example, in the 1990s, hundreds of companies entered the e-commerce space. When Amazon.com entered the mix, it added unique functions to set itself apart, such as user reviews, recommendations, wish lists and speedy shipping.
For more tips, click here.
Source:
BusinessWeek: Three Steps To A Sound Business Model
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