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What are the Best Tips for Business Model Development?

Article Details
  • Written By: H. Terry
  • Edited By: Jenn Walker
  • Last Modified Date: 26 November 2016
  • Copyright Protected:
    2003-2016
    Conjecture Corporation
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When developing a new business model, whether for a new or existing company, the most important thing to consider is matching the model to the business — there is no one-size-fits-all business model. Businesses can be structured in an infinite number of ways, and the key to successful business model development is to focus on what makes sense for the business in question. The best business models will incorporate aspects of a range of strategies according to the business' unique capabilities and needs. Plans should also be flexible enough to ensure adaptability.

No two businesses are entirely alike, and so no two business models should be either. While a small local business might benefit from having its entire staff involved in meetings, a large multinational business would likely struggle to bring to order a meeting consisting of thousands of employees speaking numerous languages. A more complex hierarchy would probably be better suited to this sort of company. In a small company, however, the exclusion of certain people from meetings as well as unnecessary divisions in terms of titles and roles would serve little purpose and might even cause resentment amongst employees.

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Defining clear and realistic goals should be the first priority in business model development. If the goals are too ambiguous, time and energy will be wasted with different individuals pursuing their own distinct interpretations of the company's aims. If the goals are unrealistically ambitious, a similar waste will occur by overtaxing available resources. It is often a good idea to set both short- and long-term goals.

Differences between companies should be reflected in the way they are organized. Three questions are fundamental to business model development: what are the business' specific goals; what assets does this business have; and what makes this business unique from its competition. Business model development should focus on answering these questions so the organization has clearly defined objectives and an equally clear understanding of how it is capable of meeting them.

A company’s assets are not only financial, nor does a larger business necessarily have a greater number of assets. For example, a smaller business might be able to adapt more quickly to certain challenges than a very large one since there are fewer people to organize and to motivate. It might also be better equipped to cater to a specific local market and provide more personal customer service. An important aspect of business model development is to recognize and exploit the advantages inherent in a business' current size and consistency. Once this is accomplished, it will be easier to market these distinguishing advantages to the customer.

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