A business model is a plan or strategy used by an entrepreneur to achieve profit and make the business successful. Many people get confused between a business model and a business plan. A business plan is a part of a business model. A business model includes components like target market, target customers, investors, competitors, business plan, revenue streams, core values, resources, etc. Nowadays, there are many existing business models to choose from. Many companies prefer to adopt an existing business model, whereas some businesses innovate their own business models.
How to craft a perfect business model
Before starting a business or entering into a new venture, it is necessary to craft a business model. A business model helps the company to achieve its vision by analyzing the problem and solution. It is very important to craft a perfect business model to achieve the desired goals. It also helps to understand the customer’s requirement and how to fulfill them. In this post, we will enumerate how to craft a perfect business model. Given below are all the essential components and steps you need to focus on.
Reason behind starting the business
This is the essential component of a business model. It generally includes a problem and solution. The problem statement consists of the issues faced by the target customers. The solution statement includes how this business will be able to solve this problem (providing product and services). Nowadays, most businesses are using blockchain technology and crypto market platforms to launch their business. With crowdfunding techniques like ICO, IEO and STO, more and more businesses are using crypto and blockchain models. These models use tokens to generate profit. These businesses are based on cryptocurrencies. Here are some reasons behind choosing the crypto field for business.
- Digital: Everything is digital. It uses the internet to send, receive, store and process information. There is no lengthy process and use of paper.
- Decentralized: It is the core feature of blockchain. A central authority does not own the data. Everyone who is on the blockchain network can share the data. It also eliminates the middleman.
- Transparent: The transactions are highly transparent. Although you won’t be able to know the name of the party, all the transactions details are recorded.
- Immutable: Nobody can tamper with the blockchain data. Once the data or information is recorded in the blockchain network, it cannot be changed. It ensures security.
Impact of the business: This component includes what impact the business in trying to create on the target customers. In a crypto business, the company will need to focus on the specialty of its products and services. The crypto business has a huge impact on the target audience because of the benefits of using the blockchain network. The business has to highlight the impacts that it is planning to create in the crypto market.
Companies mostly adopt utility token model for their business. The utility is the total satisfaction received by the customer. Companies use token to function their business. Common examples of utility token models are Ripple and Stellar. The funds can be transferred using tokens. Three main properties of these tokens are Role, Features and Purpose. The company has to create a token for their business with specific features and properties which will play a significant role in functioning their business.
- Competitors: This component will highlight business competitors. In a crypto market, there are lots of competitors. You have to plan the business model in such a way that your products and services will be better than others.
- Target market: It will include the target market the business will focus. Different business has different target markets. If your business is into real estate, your target market will be the real estate market.
- Five-year business plan: Earlier people used to only focus on the whitepaper to plan their business, but now due to rising competition in the market, they need to prepare a complete business plan for their project. Business organizations have to prepare a five-year business plan to lure investors. There are various components of a business plan.
- Executive summary: It highlights the position of the business and what the business needs to do to achieve the results. It also includes the innovative features of the business.
- Business description: It includes a detailed business description. All the important information about the business is mentioned here for investors to read.
- Market: It includes analysis of the market, where the business will focus. It helps the business to know its competitors and what advantage and disadvantages they have in the market.
- Competitive advantage: Here, the business needs to highlight its superior technology and services compared to others. It includes those features which your business have and others don’t.
- Management team: Details about the team managing the business should be included. Information about the core team, developers and advisors should be highlighted.
- Token mechanics: In this section, you have to mention details about your token, i.e. how the token will work, the supply of token, expected token value, etc.
- User adoption: This section will provide details about expected user adoption and what the business needs to do to increase users.
- Funding and financial projections: This section includes details about acquiring funds for the business. The major source of financing is venture capitalist, Self-funding and token sales. It also includes financial projections, i.e. the future of the company.
- Investor’s deck: This component of a business model includes all the details sent to the investor to persuade them to invest in the business. It is like a brochure or proposal sent to investors to invest in the business.
These are all the components of a business model. By including these components and some extra features, you can craft a perfect business model. Every business using ICO, IEO and STO platform has to prepare a business model first. To develop a business model and launch their business, they can avail professional services. Many professional companies provide services like IEO Development services, ICO Development services and STO Development Services. These companies are experienced in developing and launching crypto projects. They also provide expert services like IEO Launch services to start an IEO project. They also specialize in ICO software development which helps to manage your own ICO. These companies also provide consultation services like STO Consulting Services. If you plan to establish your own business using any of the above platforms, you can approach this development and consulting companies for help. They will also guide you through crafting a perfect business model for your project.