Things New Entreprenuers should consider!
When I look around I see, most of us inspire to be an entrepreneur and own a company, a successful company. I decided to write an article to highlight a few important points a entrepreneur should consider before starting with a new business. I am writhing this article from what I have seen on the internet and from what I have learned by seeing other business models, feel free to disagree!
Here it goes!
Determining the Purpose or the revenue model of a business:
It is really important to determine the purpose of a project/venture first and then plan your moves. The purpose could be to 1) Provide service to the community, 2) sell a product and 3) hybrid version by combing the service to a community and selling a product.
Good examples of providing service would be the free e-mail services such as Gmail, Hotmail and Yahoo where the purpose is to provide service, such services do generate lot of revenue in terms of advertisements however success of such a concept is always in correlation with the number of users, using this service.
Sites like Amazon, Bestbuy.com, Circuitcity.com, etc. are based on the product selling model. Such business models are strong however depending upon the products site deals with the business will be seasonal or will only cater to a niche community.
Historically we have seen that hybrid business models are the ones which make it real big and become the source for other small businesses. Good examples for such business models are Ebay, Google Adwords, etc. Such business models offer service and also sell a product in terms of an enabler.
eBay does not have any product of its own, it acts as an enabler between a seller and a buyer. This business model helps the ends meet by bringing the “need” and the means to satisfy the “need” together. Similarly Google Adwords runs on the same concept, it brings advertisers who are selling a product together with the buyer who is interested in buying a product.
In my view Adwords is not any different from eBay or vice versa, however the business model Adwords is based on, is far better than eBay as the scope is much bigger.
Target Audience
Success or Failure of every start-up depends on how well it is targeted and planned. It is extremely important to identify the audience for the business in question. If your business is limited to certain geographic area then it becomes even more important to focus on few of the following things:
* Internet penetration
* Demographics
* Spending Power
* Spending Habits
Plan Execution:
This is the most important part of the entire start-up cycle. Any slip-up at this stage might hurt the entire project. People involved in execution of the plan are vital. Someone might be really good at selling products but you cannot hire them if you business model is not selling a product or a service. The point I am trying to make here is that, you should identify people based on your business model and the nature of work involved. The fact of the matter is that not everything goes as planned so always have a plan B.
Few Questions!
Finally! Here are a few questions you should ask yourself before going ahead with any project.
1. What’s the purpose?
2. What’s the business model?
3. Who am I targeting/ Who are my audience?
4. What part of the targeted audience are internet users or online shoppers?
5. Do I have the skilled people to carry out this project?
Hope this helps!
Tags: Startup, Venture CapitalistShare the word!
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Although I dont have that good understanding of how these business models work, I can express my views from a consumer point of view. Let me give you example about ur own blog. There are millions of blogs that are there on the internet but there should be something in your blog that drives traffic automatically to your blog. That creates interest among your users. If you study most of the google products and their business model, its all feedback and observation based. They have always given the customer what they wanted. So in this case, I get the info that I need from your blog and if you have adsense you get the money that you might want. So in the end we live happily. So a business model should be more customer driven is what I feel.
But its a good thing that you are talking about these things man. Surely makes me put on my thinking cap. One small suggestion would be to continue this topic and give some real world practical examples that you see every day. Like what is the business model eseva follows. I think examples like these can be more understandable to more users.
Keep up the good works