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Your business model goes hand-in-hand with your product. A good business model sets the tone for your entire business and therefore, it is something that you have to carefully plan for. It describes the rationale of how your business creates, delivers and captures value.
Business Model
Describes the rationale of how your business creates, delivers, and captures value.
Below we have outlined the reasons why you need a profitable and functioning business model, which you should start working on immediately:
- Provides you with a competitive advantage. When you have a solid and well-planned business model, it can give you a competitive edge over your competitors. It makes you unique and can be the defining moment of why potential customers would choose you.
- Able to plan for growth. A good business model allows you to bring profit into your organization without having to rely on financing debt in order to expand. It helps you start a cash reserve where you can invest in your own business.
- Achieve sustainability. With a good business model, you are able to cope with any economic downturns or shifting market conditions. You are able to keep track of your profit each month and manage your finances sustainably.
- Become known to potential partners and investors. If your business model is good and proving itself to be exactly that, people will come find you. Partners and investors ultimately want to know if you have a plan for profitability. If you are able to answer and prove yourself in such aspects, this can give you a big advantage for your business success by getting people who want to help fund your initiative.
Defining your business model brings clarity for you, your employees, your customers and other potential investors. If you plan for it and communicate it clearly when operating your business, the sky’s the limit to your success
