Our Small Business and Business Modelling

It has been several months in running our small business, please excuse my silence and boy it has been eventful. I would like to share with you a small thought that I have come across and its significance in my view, in ensuring continual trading, imperative in any business.  I believe the question of establishing a business model from the onset is extremely relevant in determining revenue creation for a small business, going a long way in keeping the business afloat, especially in the first year.

A business model you ask?

 By my understanding, a business model describes the manner with which the business creates revenue, delivers value (both in service or product) to customers and the includes the process of  enticing the customers, to pay for this value and which in turn converts to profit.

Our business model is based on the same fundamentals that supermarkets thrive on, that is, upfront payment before provision of service. We provide a service to our corporate clients which they only receive after payment. The benefit the customer receives, is an improved rate and quality service. This brief description of our business model has enabled the business to grow exponentially within a very short period of time due to the availability of the revenue prior to service delivery. 

The pit falls of our business model however, large extent, is that the model is based on VALUE.  Pitfall in that, because a customer is willing to part with their hard earned cash prior to receipt of the service, it is imperative that the end product is of high quality. With this in mind its stands to reason that just as quickly as one builds the business on this model , it can dissipate even faster.

Therefore if value becomes the determining factor, it is imperative that the business ensures quality of service in all functions at all times.

Businesses modelling therefore to the small business owner, with the mix of the extensive alternatives available in the market place, has, in my opinion moved up the ladder of importance in  establishing and running a the small business and business owners need to develop more of an understanding of the impact of modelling in their business activities.