CREATING A BUSINESS MODEL AND ITS SOCIAL IMPACT - For Startups

Now that we know what a good mission statement is, and how it can help you from not deviating from the main objective of the business. we would look at the importance of Business Model and its social impact on our business... Lets kick on!

 BUSINESS MODEL AND SOCIAL IMPACT

It is very important when starting your business to know the usefulness of a strong business model. A strong business model communicates with investors and donors.

Your organisation (business) should have:

1. The ability to achieve the impact

2. Have sustainable innovative, effective & impactful strategy 

But what are the elements to achieve this:

ELEMENT 1: TARGET CUSTOMER: A target market is a group of potential customers defined by ranges that a business has decided to aim its marketing effort towards. For example, for your business, a target market might be ages 18 to 40 or a certain income bracket. This is the group that's most likely to purchase the product your business has to offer. A well defined target market is the first element of a marketing strategy. 

It is therefore important to size your market which is a very important way when defining your target customer "Sizing your market is important to ensure the potential to scale and grow your revenue". Also its important for demonstrating to your potential investors by providing "3 distinct level of market size". 

--- Level 1: Total Addressable Market (TAM)

--- Level 2: Service Available Market (SAM)

--- Level 3; Serviceable Obtainable Market (SOM)

All these would be discussed as we go on

ELEMENT 2: COMPETITIVE ADVANTAGE AND VALUE PROPOSITION:

-- Competitive Advantage {C.A}: (Analysis): The competitive analysis is what characterise and communicates your organisation's efficacy and its value added.

To define you C.A think about the following question:

1. What distinguishes you from other players and/or competitors

2. What makes your organisation unique.

By understanding the economic landscape and identifying why people choose you, investors will see that you have done research that support your business.

-- Competitive Advantage {C.A}: Parameters

Some of the parameters for C.A are:

                                      Lowest Cost (Affordable price)

                                                               #

                                      Greatest Value/Highest function

                                                               #

                               Easiest to use or educate (User friendly)

                                                               #

                                            Most widely distributed

When you have defined yourself against your competitors, you need to put together a value proposition. 

   Value proposition explains how your product/service solves customers' problems or improves their  situation, delivers specific benefits, tells the idea customer why they should buy from you and not the competitors. 

ELEMENT 3: SALES, MARKETING, DISTRIBUTION

Think about these;

-- Who are your target audience

-- How does your product or service get purchased

-- How do they buy things

-- Is your goods or service a one-time purchase or is it ongoing?

-- If it is ongoing, how will you collect your payment and the transaction fees?

Also ask yourself; 

Who is the beneficiary of the product or service and who's paying for the product e.g is it parent paying for the education for their children, if so you have to think of what parents can afford rather than exactly what the children wants.

     These are questions you need to ask yourself when it comes to sales,marketing,distribution. But one must know 

-- Types of distribution

-- Market plan component: 4P's of marketing

   As you begin to understand the social impact of a business model, emphasises would be placed on element 3: sales, marketing,distribution.

    How well can you develop that business model to a strong business model... See you in the next article titled 

READ: "Developing a Strong Business Model - For Startup"