What is the business model for a website based company Zimbabwean entrepreneurs can use?

Have you ever started a business that failed ? This is a very sad thing considering how Zimbabwean entrepreneurs struggle to raise capital in a difficult economic environment. In this blog post however, Iam going to show you how a business model can be a good starting point for increasing the chances of success for your website based start-up.

 

A web based start-up is very attractive to young entrepreneurs because of reasons like low capital high return and scalability. A good business model together with other things like capital are important things that determine start-up success. Its also an easy asset to acquire through research on the internet. But what is a business model ?

 

Well a business model is how a company creates value for itself while delivering products or services for its customers. A business model is important because (1) to an entrepreneur starting a company the business model becomes the starting point giving you a clear picture of where you must start from (2) to investors it provides the knowledge about the competitive edge of the company and provides better insight into the working of the company.

 

There are many business model templates but I think the best for website based start-ups is the business model canvas that was created by Dr Alexander Osterwalder in 2008. I recommend it for web based start-ups because it is already in use at Silicon Valley the home of leading website based start-ups like Apple, Google and Facebook .

 

So what is a business model canvas ? A business model canvas is a template for developing new or documenting existing business models. It has nine parts as follows;

 

(1) Value proposition

 

 What are you building and for who ?

The essence of value proposition is the job the customer has to get done. But what makes that job important is; (a) the gain the customer attains if the job gets done well and or (b) the pain that they avoid if the job gets done well.

 

(2) Customers

 

 Who are my customers and why do they buy ?

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(3) Channels

 

How does your product get from your company to your customers ?

(a) Physical channels e.g stores  (b) Web / Mobile channels e.g online shops

 
(4) Customer Relationships

 

 How do you get, keep and grow customers ?

(a) Online/ digital marketing or (b) Physical marketing

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(5) Revenue model

 

How does the company make money from each customer segment ?

For example subscriptions, licensing, commission etc.

 

(6) Key resources

 

 What are the most important assets required to make the business model work ?

(a) Finance – raising money, lines of credit  (b) Physical – manufacturing plants, machines (c) Intellectual – patents, customer lists  (d) Human – software engineers, scientists

 

(7) Key partnerships

 

Who are the key partners and suppliers needed to make the business model work ?

Examples of partnerships are (a) Strategic alliances between none competitors  (b) Joint ventures  (c) Regular Suppliers and buyers

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(8) Key activities

 

 What is it you need to be really good at ?

(a) Production  (b) Problem solving (c) Supply chain management

 

(9) Cost structure

Finally, all eight elements of the business model canvas adds up to costs. What are the costs needed to operate the business model ? You would want to ask typical accounting things like fixed costs, variable costs and economies of scale.