Entrepreneurial Business Idea using Business Model Canvas (BMC)
Introduction
The business idea that I chose is outsourcing business, which helps businesses to lower their expenditure in the most significant way by providing services such as labor and advancing technology. The outsourcing strategy makes the business focus on the core aspects of a business. Outsourcing brings big benefits to a business such as increasing revenues, but there are also significant risks associated with negotiating and managing outsourcing relationships. For a business to effectively outsource its responsibilities, it should focus on partnership as it does to logistics (In Šebestová, 2020). Securing and maintaining a trusted relationship is important in outsourcing efforts, which seem to be more complex than developing service levels. Businesses often opt for outsourcing as a way of increasing their efficiencies, increase speed, and lower costs. Businesses that rely on third parties for outsourcing gain more benefits because a third party focuses on accomplishing a particular task; thus, providing quality services, low prices, and fast than the business itself could have done. Businesses decide to outsource supporting functions so that they can focus their resources on the core competencies, which contribute to gaining competitive advantages in the market. I believe that my business idea is a great opportunity that will enable the provision of value proposition, customer segments, customer channels, and customer relations.
Value proportion
Outsourcing businesses require to develop strategies to sustain the inflow of projects which make them make tireless efforts to gain new clients and involve themselves in a desperate search for new ways of making the business stand out.
Products and services on outsourcing business aim at using the opportunity to provide services and products to the customers who are the main contributors of the business revenues. The business can adopt different value proportions such as customer connection target market and specific value. Value proposition covers how a business will strive to provide the needs and desires of the customers. Creating customer connection appeals to the customer’s emotions and creates a relationship that engenders a brand’s loyalty. A business trade on goodwill as a primary drive force of the business with the integration of talent among the workforce, it is essential that the acquisitions of workers with specific skills of creating a connection with clients. For instance, workers can increase customer satisfaction by offering after-sales service as a way of making them come back again for more products and services. Customers will feel valued in the business; thus, the satisfaction through the use of proper communication skills (Bland, 2019).
My business itself can identify the workers with talents in particular business sections and advance their skills by providing them with training on ways that would ensure maintenance and attraction of more customers who would contribute to more revenues that a business will use to build itself. The most powerful value propositions are helping the customers understand the value of the business products and services. Customers are given a chance to see how the business products and services will benefit them and available options offered to suit their needs. Increased understanding is likely to attract customers to the business; thus, engaging with your products and services. For example, when handling a business that deals with machinery, the business needs to know the production efficiencies to give clear guidelines to the customer who will want to consider the value of products before purchasing them. Value is important than the prices because there is a greater advantage when value is given priority than the price of a product (Bland, 2019.
When implementing a business idea, it is important to ensure that I conduct efficient research concerning the population such as the age, gender, and other demographics that form a basis of the business that would guide the business research on the needs of the population. As a business, it is important to ensure that I explain the services in a way that appeals to them (Upward & Jones, 2016). Customers are known to move from one business to another comparing quality and prices, if proper communication, for instance, proper wording is not done appropriately, they may move to a different place looking for the product. My business value proportion should address customer needs as closely as possible. Market research will help me to collect different demographic information that would enable the business to understand their values needs and even the pain points that should be addressed (Willcocks, Lacity & Sauer, 2017). It is also important for my business to identify the appropriate technology that will be needed to address the needs of customers. Business flexibility to changes in technology would enable it to thrive in the market by ensuring relevant innovations are made, for instance, a business may be required to retrain its employees to equip them with new skills and knowledge that they can apply in production and satisfying the target market.
Key activities
Customer jobs should be functional because they have to offer quality products and services to customers. When a business applies outdated technology, attaining customer satisfaction may be a challenge because the products and services will not stand out (Innovation in Global Entrepreneurship Education: Teaching entrepreneurship in, 2021). Therefore, the flexibility of a business is necessary because technology plays a significant role in ensuring that a business adapts to changes that would attract customers at all times. Adoption of appropriate business technology encourages the creation of incentives in a business that enables it to allocate resources where they are the most effective and ensure maintenance of the nature of free-market economies on a global scale. Technology and the development of infrastructure in a business will need employees to be equipped with the necessary technical skills.
The provision of social jobs that a business enables it to protects itself from making losses that would result in its downfall. Investing in the appropriate infrastructure and technology will enable a business to thrive well because when changes occur, it can swiftly accommodate the changes without straining. Protecting a business requires employees to keep themselves updated and equipped with technical skills and knowledge which would be in the long run contribute to an increase in the revenues collected. Social jobs make a business outsource an individual who would help a business to provide quality services and goods to the customers and being able to achieve market competition through product differentiation (Upward & Jones, 2016).
Provision of raw materials and investing in important assets such as storage facilities, bring more work machines and hiring qualified personnel. The key resources have a direct impact on value proposition because it dictates the kind of employees needed and techniques to be employed to ensure product differentiation.
Revenue stream
Revenues streams contribute to the financial stability of a business. Revenues depend on business activities; in my business, the sale of products and services will be the main sources of revenues. Revenues dictate how the business earning will contribute to product pricing. Customers who will come for services in the business will require them to pay depending on the time they spent consulting. Revenue streams enable my business to realize the unusual trends that may occur. When there are changes, there should be an explanation for the variations. At least my type of revenue will contribute to a larger percentage of my business finances because I will have one then I will venture into others with time.
Key resources
The advantage of outsourcing is that it saves on cost than when in-business personnel are used to bring in the innovations. In a business, different workers are employed to perform different tasks, and not as for outsourcing because they are equipped with different skills that they use in bringing innovations beneficial to the customer. Outsourcing enables the provision of quality technical skills at low prices (Upward & Jones, 2016). With improved technology, businesses can achieve efficiency and productivity that suites customer needs. The more the business invest in technology, the more the tasks that employees will need to handle and the increase in knowledge that enables them to understand what the customer needs.
Skilled personnel; my business will also invest in outsourcing skilled personnel, for example, employees can be employed depending on their talents, and when outsourcing is done, the employees are equipped with the necessary technical skills that enable them to provide quality good and services to customers. The constant change in technology also requires the employees to be constantly trained too to provide the business with a competitive advantage (Innovation in Global Entrepreneurship Education: Teaching entrepreneurship in, 2021),
Customer segmentation
Customer segments provide a guideline on how a business markets to individual segments and the kind of services and products made available to the customers. For example, a business that deals with musical instruments may decide that when a young person buys a guitar, they sell it at a low price and when an elderly one buys, they increase the price, this is as a result of maybe considering the disposable outcome between the two groups (Willcocks, Lacity & Sauer, 2017). Customers are divided into three, startups, small enterprise businesses, and established organization.
Startups are upcoming businesses that struggle to pick and develop themselves in the market. The main challenge to this business is that they face financial problems at the beginning thus they cannot afford to hire talented personnel (In Šebestová, 2020). They normally depend on outsourcing to develop their infrastructure and advance technologically because outsourcing is cheap.
Small and medium business enterprises (SMEs), the businesses also face a similar challenge as that of startups; thus, they also depend on outsourcing to increase their competitive advantage. SMEs rely on constant training of their workforce because they have not attained the standard of employing talented individuals (In Šebestová, 2020). The process makes the business incur high costs, making it opt for an outsourcing strategy that will contribute to the achievement of multiple goals at a low price.
Established organizations are businesses that do not struggle to meet customer needs because they have invested largely; thus, they always adapt to any changes. Outsourcing advantage to them because they make more profits to the company and have access to the competitive market at any given time.
Customer channels
Different ways are used by businesses to reach their customers. Customers are found on various platforms; therefore, the use of channels would be essential in the provision and promotion of my business services and products. The channel I will use is advertising will reach more people and all clients are important because of their financial contributions to the business.
Advertising promotes sales in a business by reaching out to customers. Especially at this time when businesses have advanced technologically, I will go for digital forms of advertisement, for example, internet advertising (Upward & Jones, 2016). The form of advertising will help my business to reach out to many people in various customer segments. Providing relevant information to the customers helps them to know the kind of products a business deals with, in my business I will adopt the use of social media ads because that is where many people who are potential customers are found. I will also advocate for the direct distribution of products to the customers because involving intermediaries would result in an increment in the final cost of the product.
Customer relations
Creating customer relations would development of a mutually beneficial relationship that goes beyond the initial purchase. Customer relations are experienced through the creation of customer service teams to guide customers where necessary and offer customer support to help in creating a healthy relationship (50minutes.Com, 2017). Customer relations in a business can also extend to the sales and marketing team because they also influence customer interactions with the company. The SMEs and startups should build upon developing the customer relations because they are at the initial development stages, thus, such a factor should be taken into consideration to increase profitability by employing different forms of business marketing strategies and ensuring that they retain their customers.
Customer acquisition entails having reliable customers depends on how a business has invested in their acquisition. Customer segmentation is available; therefore, as a business, you can take the opportunity to conduct market research to identify the larger population need and marketing the business through different platforms such as social media ads that pop up on a customer’s screen (50minutes.Com, 2017). It would be easy for my business to promote and make the customers learn about the services and products offered.
Customer retention can be achieved by the business by ensuring that initiatives like brand and customer loyalty are implemented. Retaining a high number of customers is beneficial because the profits ploughed back are increased and increasing success in the business. Customer retention enables an efficient competitive strategy because the business will strive to reach out to customers to provide information regarding business and once in a while the business will also award the loyal customers for the trust, they have guaranteed them (50minutes.Com, 2017).
Key partners
My key partners will be with my suppliers by showing qualities of trust, commitment, and reliability, companies, and service providers, especially outsourcing personnel who will help me advance technology and infrastructure in my business. I will sign agreements that will be adhered to and also, I would desire to partner with joint ventures to create new businesses to increase profitability in my business (Willcocks, Lacity & Sauer, 2017). Sometimes, I will partner with a manufacturing company to produce a product that I do not have; thus, I will have to pay for the product made for my business.
Cost structure
Through my business operations, I understand that the cost structure describes the costs that a business incurs to ensure the smooth running of its activities, for example, costs as a result of partnerships, employees, and development of infrastructure. The main costs usually involve key partnerships, customer relationships, key activities, and customer relationships (Willcocks, Lacity & Sauer, 2017). In my business, the greatest involves key activities because they aim at improving the products and services I will provide. Constant changes in technology will need adjustments for my business to compete in the market.
Conclusion
Businesses are always in competition; therefore, tools like value proposition are necessary because they contribute to its success. In my business, the adoption of various strategies such as business segmentation, customer channels, value propositions, and customer relations with help me to work on the strategies as I will also depend on outsourcing to increase value in my business. The value proposition in my business being the basic of them all because it is what will contribute to customer retention and acquisition. My business desires to increase customer gains and decrease customer pain by ensuring they provide essential products and services.
References
50minutes.Com. (2017). The Business Model Canvas: Let your business thrive with this
simple model. Cork: Primento Digita
Bland, D. J. (2019). Testing business ideas.
Innovation in Global Entrepreneurship Education: Teaching entrepreneurship in. (2021).
S.l.: EDWARD ELGAR PUBLISHING.
In Šebestová, J. (2020). Developing entrepreneurial competencies for start-ups and small
business.
Upward, A., & Jones, P. (2016). An Ontology for Strongly Sustainable Business Models:
Defining an Enterprise Framework Compatible with Natural and Social Science.
Organization & Environment, 29(1), 97-123. Retrieved May 18, 2021, from
https://www.jstor.org/stable/26164756.
Willcocks, L. P., Lacity, M. C., & Sauer, C. (2017). Outsourcing and Offshoring Business
Services.
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