When you start your own business, you have to be sure you are ready. That’s why you have to be guided by these 9 key points for your business model:
1. The Value Proposition
Are you offering something to solve customer problems?
Let me use myself as an example: First of all, even if I am not the only one on the market, I am offering services that not many online marketers offer. For example, instead of managing Facebook Business Page, I am offering services like managing TripAdvisor and Yelp listings. Is not a feature, but a solution. Most of my clients know how important the reviews are, but don’t know how to manage them well. On Facebook, while everyone uses only posts and advertising, I am offering custom applications that can be used to target more clients, to show relevant information about my clients’ businesses. Also, the value is not only in innovative services, but also in quality. The design is out of the box, the delivery time is very short, and I am offering long term support. Regarding the web-development, instead offering packages with three, ten or unlimited pages for my clients’ websites, I am offering the latest solutions, with websites that are mobile optimized, and also I am not offering just website development, but an online office for any business. I am not creating presentations websites, but ways to communicate with the customers.
2. The Customer Segments that you serve
I always start by thinking that my clients want to have happy customers. Happy customers are returning customers. Also, they are the best referrals for your company. Not everyone is posting reviews about your product. Usually the reviews are written only by those who are really excited about your product/service, or by those really disappointed by your services. From my end, I can say that for each business I have at least two customers. One is my direct client, the B2B relation, and then I have the B2C, because I am the one managing the interaction between my direct client and his clients. To be sure I reach all his potential clients, I have to use all the possible distribution channels. I know that most of the potential clients can be reached through two channels: TV and Online. Almost everyone is watching his favourite show on TV, and that almost everyone is online. Since TV ads are quite expensive, my focus is on Online. Let me explain why. On TV, if you want to sponsor a good show, not the best one, just a good one, on just one of the cable providers (let’s say SKY), you need to spend at least 10.000 Euros (for Ireland). Instead, if you use this money for an online campaign, you can be sure it will be a huge one. So, people are interested in my services, since they know that they will pay less and get more.
3. Channels of communication, distribution, and sales
What channels you use and how for awareness, evaluation, purchase, delivery, and after sales
It is very important to use all the channels you thing suits your business. For example, my business is a B2B one, but I am also using B2C channels, like Facebook and Twitter. On Facebook, mostly to promote the image of TomorrowInternet as a young initiative, and on Twitter to spread the word about our services, how we can help small business owners and entrepreneurs. LinkedIn is a bit different, and is very important for my business. On LinkedIn I find contacts, I can see what they are doing, how is their business doing. Then, since my purpose would be to help them manage their online presence, I have to do some research on Facebook, Twitter, Tripadvisor, FourSquare, Google Local, to see how active they are online. So I am using all the channels for evaluation. Also, to communicate with my potential clients, I am using ads on Facebook, Twitter and AdWords. I am not using LinkedIn ads, I prefer to use LinkedIn for direct contacts. On the next step, the one of collaboration, I use face to face meetings (if possible) but also phone calls and Skype. After sale, usually I use email, and also social networks, like Facebook or LinkedIn. Even a “Hello, how are you?” is important.
4. Customer Relationships
Here you should think about customer acquisition, customer retention, and upselling
I always try to make my potential client understand will be great for his business if he collaborates with me. First of all, I will not treat him like he’s just my client; that I am not offering him a service, but a solution to his problems. So it’s not a relationship between a marketer and his client, but a relationship between a business owner and his marketing team. Just to give you an example: A few days ago a client contacted me to make a website for his business. He had a website, but one made with those free tools you may hear about. He realized that he wants to make the next step, to have a professional website. Since he was using a “free” tool (actually was not even free, he had to pay something like 60 bucks very half year), I had to start everything from scratch. So, I have created the website. After that, before delivering the website, I made sure everything is Search engine Optimized – text, titles, images, etc. Then, I set up his emails. I went to his office, helped all his employees get the new emails in their inbox, even helped some of them to set the accounts on their mobiles – And all that for no extra-cost. That was the moment he realized he is not just a client for me, and started considering me as part of his team.
5 The Revenue Streams
Think at your one-time customer payments or recurring revenues resulting from ongoing payments.
According to Wikipedia, In “Web 2.0: A Strategy Guide”, Amy Shuen identifies six types of revenue streams for Web 2.0 businesses: subscription; advertisement; transaction fees; volume and unit selling; syndication and franchise and sponsorship and co-marketing. In my case, the revenue streams are the products (websites, mobile apps, Facebook applications), but also services – management of social media accounts, management of advertising campaigns, search engine optimization or consultancy. Normally a service has a medium profitability, but generates revenues sooner. When it comes to websites, just to give an example, it’s normally an one-time payment. The clients does not subscribe to your service. But, a wise client always wants to be updated with the latest technologies, so he will also ask for a subscription – maintenance for his website.
6. Key Partnerships
As I said before, for me every client is actually a partner. And I use the referral system a lot. Actually, I think is one of the most important systems. I even have a referral system with 15% commission for every new client. Unfortunately, I didn’t manage to have a strategic alliance with any other marketer. And I’ve tried. Even a few weeks ago I have contacted a marketer from Dublin, asking her to join her efforts with me. I always think that the more the merrier, and more powerful you’ll be. But I didn’t get any answer from any of those I’ve contacted. Anyway, I have a partnership with SEMRush – one of the best providers of Search engine Marketing Analytics. (If you are a marketer and want to try SEMRush, here is the link to try a Pro account for free for two weeks: www.semrush.com – It is not an affiliate link! I only provide this link to marketers to try services for free!)
Also, I am looking to start collaboration with Hubspot, providers of marketing solutions for business owners. But that’s only on the marketing side. On development, things are quite different. I have a strong collaboration with Envato, my supplier of themes and design for websites. Also, I work with many designers and web-designers – It’s a nice world to hang around.
7. Key Resources to make your business model work
Financial resources are always important. But when you try to start your own company you are almost like a teenager: you have the energy, the ideas, but you don’t have the money. That’s why I think you should focus on other key resources as well: physical ones – have a computer, have a desk, have an office, or whatever you need to start your own business. Intellectual and human resources are important as well. I admit I have a big advantage in working with big companies, but I also took part in a few start-ups. And, in a start-up the most important part is to have the intellect. For me was kind of easy to start my company and offer marketing solutions: working with leading marketing agencies world-wide I have learned how to implement online campaigns, how to work with AdWords, Analytics. And, I was a bit lucky, because my hobby was web-development, so everything fit like a glove. And that’s how most of the start-ups are. When you want to start your own business, first you have to think if you have what it takes to be on the market, if you have all the other resources, not just money.
8. Key Activities
Obviously, key activities differ depending on type of business. And keep in mind that some of the activities can be outsourced or completed within your company.
On web development, the key activity is Production. I have to choose the best design for every client, to setup everything properly and to be sure the client gets the best quality. Other way, I am out of the market. Actually that’s how I started: Professional looking websites at affordable prices.
On the online marketing and consultancy side, the key activity is Problem solving. I always have to come up with new solutions to individual customer problems. And all the solutions are personalised. I’ve tried a few times to create a template for social media strategies. I said that I will spend less time creating the strategies, if I have the template ready. When trying to implement the system I realised that I’m spending more time trying to fit all the ideas and solutions under the same template. The third important key activity in my business is research. I always have to keep up with all the changes. I think online marketing is one of the fields where experience is very good, but where if you are out for a few months, you have to work a lot to get back on track.
9. The Cost Structure
In theory there are two types of cost structures: cost-driven and value-driven. Where is your business situated?
According to the Cost structure you can position your business as one that brings value, or as a low-cost one. It is very complicated to have both (I’m not saying is impossible). When it comes to website development, I have tried to combine both. I cannot offer the same prices as a student, or like the companies that are offering the websites for free, but not only that you get a website with an ugly design but you have to pay for hosting and other hidden fees. So, I have tried to lower the cost as much as possible, but to offer premium websites. That’s why I am not only offering websites, but mobile ready websites, SEO ready, and we even have an offer now to offer (for free) the website as an Android Application, downloadable from Google Play.