Business Model Focus on the Top Line - Revenues

This entry for Manage Your Money Mondays focuses on the top line of your income statement: REVENUES. 
You have probably read and heard about the need for a good business model for your company.
It isn't as mysterious as it could sound. That's just a strategist's way of saying to ask yourself a key question: 

How will you make money?

A business model describes how an organization creates, delivers, and captures economic value  or social value.

Wikipedia

Typically, for-profit businesses focus on adding economic value and not-for-profit organizations focus on adding social value. The case can also be made that the ideal position for each lies in a hybrid entity; i.e.: profits with social consciousness and social missions with fiscal responsibility.

Viable Business Model must come before you install that great marketing cotter pin: Visibility. Too often, a business has a great product or service, coupled with reasonable pricing, but little or no business modeling. It leaves a big gaping hole in the viability of the business. 

What do I mean by that? You, business owner, have identified a marketable product that you believe will sell -- there is need in the marketplace. You have calculated your income needs, factored that into your pricing, and decided this can work. You venture out into the sales jungle and do "all the right things" -- or so you thought. The results are disappointing, however. Thus, a piece of the planning puzzle is missing. You can only conclude that your business model and key parts of your strategies are flawed.

The easiest way to build a Business Model is to 
Ask and answer the 5Ws -- the ones you learned in English or Language Arts class: Who, What, When, Where, Why. Apply the answers to your Business Model. Then make sure that your price points, your packaging and presentation [branding], and your placement match up accordingly.

For example: If you provide high-end bathroom remodeling, you need to market your services in venues and to prospects that are likely to spend upwards of tens of thousands of dollars on that set of products. Develop plans for finding and connecting with those prospects so that your time -- and marketing dollars -- are invested well. Find people who are already connected to your market niche; that makes a great starting point.




If you would like a little help with strengthening the viability of your business, E-mail us with your questions, or leave Comments below, about your challenges in reaching your business goals.

© 2010 DMMI Associates LLC – All rights reserved

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3 Ways to Avoid Costly Mistakes in Running Your Business

Mistakes Can Cost Money and Customers - 3 Tips for Avoiding Them.

We all make mistakes. Why? Simply because we are human. The better we are at avoiding mistakes, however, the less it will cost us in the long run. Money is one obvious cost. Credibility and customer confidence is the greater risk.


Sid Kemp, in his article "Learn From Your Mistakes," estimates that "continued incompetence costs our society billions of dollars a year." Yes, he said BILLIONS. What if we could reduce this cost, in both time and money resources, by not making them in the first place? 

To work toward that objective, consider these three ingredients: 

1. Have a standard, preferably written, set of steps for delivering your product or service. This is called a process. If you follow your process, it is easier both for you, and anyone you hire, to deliver what is expected. 
2. Know what your most costly step is. In other words, if that step gets flubbed, you will either lose money or lose a customer. Then, monitor that step like a hawk. 
3. Have a predetermined way for handling problems and complaints. When the inevitable flub happens, know what you will do. 
• Give your subordinates the power to act based upon that process. 
• Minimize the inconvenience to your customer or client. Your response must make sense to them. (See this blog "You Don't Make Sense").

Mistakes can be learning opportunities, too. For a few thoughts on that, see this article by Sid Kemp, for Entrepreneur.com. Head mistakes off at the pass and most of the time you will get the results that both you and your customers expect. 



E-mail us if you would like help with defining or improving your processes.  

© 2009 DMMI Associates LLC – All rights reserved

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