Does It Gel?
The best business idea in the world could fail miserably without the right business model. Do you have a good one? Don Debelak, author of Business Models Made Easy, suggests using his GEL analysis to evaluate your business model. Does your current business model ensure Great Customers, Easy Sales and Long Life?
Having Great Customers means your business model enables you to acquire high-value customers and offer them a significant value with your competitive advantage. Are your customers easy to find and target? How much will it cost to find them? How easy is it to secure repeat business?
To ensure Easy Sales, notes Debelak, you want to ask yourself: Does it cost a lot of money to acquire sales? Do you sell your product or service with a high enough margin to make your venture truly profitable? A good example of this is the way Starbucks sells $2.50 coffee to give customers a sense of luxury and prestige. The fact that it is an easily repeatable sale as customers return again and again for the product also speaks to the Long Life element of the GEL model. Will your business model sustain your company over time? Does your business model attract repeat customers? If your product is not edible or you offer a service, you could sell add-ons like long-term service plans or a complementary product or service to increase your longevity.
Continually evaluate your model, says Debelak. And study the business models of other companies in your industry--both successful and unsuccessful. Adds Debelak, "There are very few [business] models that can't be drastically improved."