Your idea might be fantastic, and there might even be a massive market for it, but that’s not enough. Running a business requires systems in place to solve problems, formulate policies, and find answers continually. 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. All of this will be directionless and chaotic without a business model to follow, which is a recipe for disaster.
If you step into the market without a planned business model in place, you’ll probably fail just like 17% of startups.
Constructing a sound business model enhances your chances to succeed dramatically. Deeply research the way other competing businesses operate. You can focus on questions like;
• What’s their primary source of customer acquisition?
• What is their marketing strategy?
• Which milestones did their startup achieve in the first six 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, focusing on specific objectives. Experiment with 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.