Before we can focus on the things which make a business model unique to a small business consulting business, let’s take a quick look at what information is contained in a business model itself.

A business model is simply a way of getting all the ideas which go into the creation of your business down on paper. It helps you to organize your thoughts, and presents all the information in a clear and logical way. This not only helps you to see your business more clearly, but also makes it easier for potential investors and others, to quickly understand your business.

Generally, a business model will cover 4 different areas: Infrastructure, Offering, Customers, and Finances.

Infrastructure

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In order to have a profitable business it is important that you are able to provide a product or service that your customers want. Although a simple concept, the answer will not be found based on assumptions and guessing. The function of market research is very important to the success of any business because it helps you gain a better understanding of your customers needs which is essential in determining which products or services your business should be selling to them.

When you have identified where your customers are you need to determine if your products or services is what they actually need. One way of doing it is by identifying the specific needs of your customers and matching these with your businesses product or service. During the marketing process a product or service can be broken down into features and benefits. It is important to understand the difference between the two as many people get them confused. The features explain the physical and technical aspects of the product and what it actually does. For example, a car travels from 0 to 60mph is what you would call a feature. A benefit describes what the product or service can do for the customer. For example, benefits can be saving time, saving money or doing things faster.

When promoting your product it is important to know that the benefits that you focus on are relevant to the customer you are selling to. Using market research to help you understand what their particular needs are will help you do this. In many ways it is more effective to sell the solution that the product and service can provide than actually selling the product and service. At the end of the day products and services should be seen as ways of providing the solutions to peoples problems. For example, a $10,000 car does the basic thing as what a $100,000 car will do and that is it will drive you from A to B. The only difference is that when it comes to selling the $100,000 car you are not actually selling a car you are selling a lifestyle that people aspire to and that is what you need to focus on when matching your products or services to the needs of your customers. People have different needs whether they be physical or emotional. Higher up the scale you are dealing with consumer needs that are more connected to emotions and self-esteem. Products that make people look and feel younger will always be in hot demand.

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Small business growth can be achieved through strategic diversification. Why are many businesses not fully leveraging the advantages of diversification? Primarily because the business owners don’t understand the benefits. Increasing profitability and business growth are the two drivers for diversification.

The advantages of diversification can include:

• Economies of scale: for example, in purchasing, in producing, in supplying;
• Minimizing sales peaks and valleys: for example, while one product’s seasonality results in slow sales; the other product’s seasonality results in high sales;
• Production capacity utilization: for example, if your production facility is under-utilized, then adding new products through a diversified strategy can help you fill production capacity;
• Overall efficiency improvement can be expected: through synergy efforts;
• Reduction of costs: by sharing resource costs amongst the diversified products, services or markets;
• Improved labor utilization: by being able to deploy your human resources in a more efficient work flow cycle;
• Increased opportunities and sales;
• Competitive advantage: by being able to bundle products or services together that provides unique value and unique differentiation.

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