Total Business Insider

Have you been trying to come up with a business model? Some of the content you find online about business model generation may be difficult to implement because it was either meant for a different industry or the material contains such heavy MBA parlance that it doesn’t make practical sense.

Think of a business model as essentially a system in which your value proposition, meaning customer segments, products or services, channels and cost structure produce profit. It’s not any one of these things, but all of it combined, working together.

So what determines the best model for your business? It’s the wrong approach to assume that there exists a set of business models that a business owner may choose from. It’s true a few probable models may exist but it’s not the best method of approach; and since there is no singularity in that tactic, one should only then come up with a model based on existing strengths, skills, and customers, that way you lay out the basic puzzle pieces and form a working model based on your needs.

Consider the following:

· Products and services

· People

· Channels

· Activities

· Costs

Knowing Your Business Model

Before you proceed, seek to understand the existing business model, and then try to draw a connection between these variables. Find out what appears necessary and what’s missing. Finally, figure out if your business is operating with a viable model.

The reality is you can’t truly figure out how other successful businesses – whether online or in your local community- operate. You might be tempted to try and recreate what you see them doing on the outside but if you don’t have a clear picture of what goes on behind-the-scenes, it won’t work.

The websites, social media, storefronts, newsletters, cheap products, are only facades, used to get the customer in the doorway, and don’t present the entire picture. What makes a business succeed is how these activities, channels, customer segments, are brought together to prepare the customer for a bigger, better experience.