Your idea might be amazing, and there might even be a huge market for it, but that’s not enough. You see, running a business requires systems in place to constantly solve problems, formulate policies, and find answers. These systems comprise the business model of a startup.
Let’s jump into a practical example. Your startup won’t succeed without an elaborate strategy to monetize your product idea, or to acquire enough customers to run a business. But, customer acquisition also comes at a cost, for which you need investors. Now, the cost itself has to be lower than the profit those customers will bring. Already, it’s all seeming a bit directionless and chaotic without a business model in place, isn’t it?
If you step into the market without a planned business model in place, you’ll probably fail like 17% of startups.
Constructing a sound business model greatly enhances your chances to succeed. Deeply research the way other competing businesses operate. What’s their major source of customer acquisition? What’s their marketing strategy? What milestones did their startup achieve in the first 6 months? Finding answers to these questions will already bring direction in your steps, and steer your startup towards tried and tested strategies.
Knowing what your competitors achieved in their initial stages will also give you realistic goals to beat, with specific objectives to focus on. Experiment different ways of expanding your customer base to determine which of them is the most cost-efficient. These could include giving out free samples, paying for online ads, or sponsorship deals with social media influencers etc.