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The Differences Between a Business Plan & Business Model

Every successful small business owner has engaged in some sort of business planning. Whether you are identifying your newest marketing strategy or planning a customer retention campaign, your business strategies must be geared around your business plan and business model to generate overall success.

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Business Model

Your small business’ business model ascertains how your business makes money. It identifies the services that your customers value and shows the reciprocation of funds for the services your small business renders to your customers. Of course, your small business may have more than one method of generating income. Still, the business model simplifies the money process by focusing on the largest income generator. For instance, a grocery store sells many items. It may also provide additional services, such as lottery and check cashing. The business model only recognizes the majority income generator, which is the sale of grocery inventory. Therefore, the business model will reflect the sale of groceries to the customer, which generates income at the time of the customer’s purchase. The customer benefits from the wide selection of inventory and your small business enjoys the profits of the wide inventory selection.

Business Plan

The business plan provides the details of your business. It takes the focus of the business model and builds upon it. It explains the equipment and staff needed to meet the details of the business model. It also explains the marketing strategy of your small business, or how your business will attract and retain customers, and deal with the competition. Furthermore, the business plan explains the financial stability of your small business at a particular point in time, as well as in the forecasted future. Overall, the business plan supports the business model and explains the steps needed to achieve the goals of that model.

Interdependency

The business plan is completely dependent upon the business model. The business model explains the flow of money within the company and the business plan the structure needed to obtain that flow of money. If you change the business model, you will also need to change the business plan. Although the entire business plan may not require change, you may have to address changes in staff, equipment, location or marketing. These changes may also require changes within the financials if additional purchases or other drastic changes are required.

Change

Change is a common force in the business world. Small businesses must be able to adapt to the changes of the industry and the demands of its customers. Failure to adapt to this change can result in the loss of customers and decreased profit margins. It is important that your decisions regarding change align to your business model to avoid wasting time and resources. In addition, it is important that you update your business plan to reflect your small business’ changes. Updating your business plan will not only help to keep you on track with your business’ goals and missions, it will help you to benchmark your business’ progress, and develop new or revised strategies towards success.

How to Compare a Business Model With a Competitive Strategy

To make money, your business must provide something that customers want or need, and must get the word out to a critical mass of consumers. Reaching the right customers involves setting your offerings apart from those of your competition through an effective competitive strategy. Your business model provides the basis for your competitive strategy, defining what you promote and where you target your promotional efforts. Comparing business model and competitive strategy offers an opportunity to craft a consistent message, using your unique strengths to draw the right clientele.

Listen closely to customers to understand their needs and preferences.

SWOT Analysis Comparison

A SWOT analysis outlines your company’s strengths, weaknesses, opportunities and threats — and can assist in comparing your current competitive strategy against your business plan. Strengths and weaknesses are internal qualities, determined by who you are and how you have chosen to operate your company. Opportunities and threats relate to the business climate in which your company operates. Compare business model and marketing strategy through a SWOT analysis to determine whether your message reflects your core strengths and whether your outreach efforts successfully set your offerings apart, addressing customer concerns and standing out from the competition.

Target Market Comparison

It’s pointless to market technical manuals to consumers who can’t change their own light bulbs. Your business model should be based on a clear understanding of who is most likely to pay for your products and services. If your marketing strategy is consistent with your business model, your outreach efforts will be targeted towards defining target market demographics, understanding how these consumers absorb information, and positioning your offerings where these potential customers are most likely to find them.

Pricing Strategy Comparison

The price you charge for your product should aim at the sweet spot that provides you with a livelihood while also fitting the budget of your target market. Compare the pricing element of your business model with the pricing element of your marketing strategy by evaluating your prices relative to those of your competition. Your price should reflect your strengths, challenges and priorities. For example, if you value quality and pay close attention to detail, you will likely charge a high price that sets your offerings apart and communicates how product benefits justify the additional expense.

Product Features Comparison

Whether looking at sales results or projections for the coming year, positioning desired features at a competitive price can generate scenarios for product offerings. As you have developed your product or service, you have likely tailored it to meet customer needs by adding or eliminating features. For example, if your product will be used most often by children, it must be small enough to fit in their hands. Compare business model and marketing strategy with regard to product features by placing these features in context, determining whether they are effective and tinkering with them to enhance user experience and craft a relevant marketing message.

Fundamental Facts about Business Models

This article is based on the free eBook "Business Models - Networking, Innovating and Globalizing"

I am sure you’ve heard the term business model before. But can you honestly say you know what exactly it is about? In short: a business model is a sustainable way of doing business. Here sustainability stresses the ambition to survive over time and create a successful, perhaps even profitable, entity in the long run.

The field of business models is gaining more and more importance. It is, for example, becoming a core management discipline alongside accounting, finance, organization etc. and we soon expect to see teaching modules on business models entering leading Masters and MBA programmes. This is just one of the reasons why we’ll take a closer look at what a business model is all about.

(One possible) verbal definition of a business model

A business model describes the coherence in the strategic choices which facilitates the handling of the processes and relations which create value on both the operational, tactical and strategic levels in the organization. The business model is therefore the platform which connects resources, processes and the supply of a service which results in the fact that the company is profitable in the long term.

Ryanair as an example of a business model

One of the best examples of a business model that has changed an existing industry is Ryanair, which has essentially restructured the business model of the airline industry. As the air transport markets have matured, incumbent companies that have developed sophisticated and complex business models now face tremendous pressure to find less costly approaches that meet broad customer needs with minimal complexity in products and processes. While the generic strategy of Ryanair can be denoted as a low-price strategy, this does not render much insight into the business model of the company.

The low-cost option is per se open to all existing airlines, and many already compete alongside Ryanair on price. However, Ryanair was among the first airline companies to mold its business platform to create a sustainable low-price business. It is the “no-service business model”. In fact, the business model is so well thought through that even the arrogance and attitude of the top management matches the rest of the business. But they can make moneyin an industry that has been under pressure for almost a decade, and for this they deserve recognition. Ryanair’s business model narrative is the story of a novel flying experience – irrespective of the attitude of the customer after the ordeal.

The 6 parameters that make up a business model

In 2002 Chesbrough & Rosenbloom tried to corner the important aspects to be considered in order to comprehensively describe the business model of a company.

They define six elements which make up the business model:

  1. Articulate the value proposition, that is, the value created for users by the offering based on the technology
  1. Identify a market segment, that is, the users to whom the technology is useful and for what purpose
  1. Define the structure of the value chain within the firm required to create and distribute the offering
  1. Estimate the cost structure and profit potential of producing the offering, given the value proposition and value chain structure chosen
  1. Describe the position of the firm within the value network linking suppliers and customers, including identification of potential complementors and competitors
  1. Formulate the competitive strategy by which the innovating firm will gain and hold advantage over rivals

Great business models start with the right questions

In order to start working with clarifying the business model of a company or an organization, one can start off by asking questions such as:

  • Which value creation proposition are we trying to sell to our customers and the users of our products?
  • Which connections are we trying to optimize through the value creation of the company?
  • In which way is the product/service of the company unique in comparison to those of major competitors?
  • Are there any critical connections between the different phases of value creation undertaken?
  • Can we describe the activities that we set in motion in order to become better at what we do?
  • Which resources, systems and competences must we attain in order to be able to mobilize our strategy?
  • What do we do in relation to ensuring access to and developing the necessary competences?
  • Which risks can undermine the success of the chosen Business Model?
  • What can we do to control and minimize these?

Definition of Business Model

This describes the method or means by which a company tries to capture value from its business. A business model may be based on many different aspects of a company, such as how it makes, distributes, prices or advertises its products.

http://www.innovationmanagement.se/wp-content/uploads/2013/10/%E2%80%98Borrow%E2%80%99-Business-Models-to-Reinvent-Your-Industry.jpgThe business model concentrates on value creation. It describes a company’s or organisation’s core strategy to generate economic value, normally in the form of revenue.

The model provides the basic template for a business to compete in the market place, it provides a template on how the firm is going to make money, and how the firm will work with internal players (firm’s employees and managers) and external players (stakeholders such as customers, suppliers, and investors).

The business model indicates how the firm will convert inputs (capital, raw materials and labour) into outputs (total value of goods produced) and make a return that is greater than the opportunity cost of capital and delivers a return to its investors. This means that a business model’s success is reflected in its ability to create returns that are greater than the (opportunity) cost of capital, invested by its shareholders and bondholders.

Business models are an essential part of strategy – they provide the fundamental link between product markets, within the industry, and the markets for the factors of production such as labour and capital.

Any resilient business model must be able to create and sustain returns for its investors over time, otherwise, it is likely to go out of business or fashion.

Example
The ‘razors and blades’ model used by companies such as Gilette, in which a basic product (the razor) is sold cheaply, but an essential add-on or consumable (the blade) is sold at a high price once the customer has been lured in.

Another example is a mobile phone company may sell handsets (the bait) at a reduced price while signing up customers to buy calls over the period of a contract (the hook).

Also General Motors, for many years, had an unsustainable business model as its returns did not match or exceed its cost of capital. Profitability was focused on the financing of cars, i.e. providing financing to its automotive customers, such as loans to buy the cars, through its finance subsidiary GMAC, rather than by designing and manufacturing sought after cars that are also cost competitive.

When the financial crisis struck, this model encountered problems, and as GMAC had to seek a US government bailout, the company’s already precarious condition turned into bankruptcy.

Business Models Are Under Attack

Most interviewees told us that their old ways of doing business were under serious threat.   Most often, this boiled down to how technology, and the competition enabled by it, is transforming their customer relationships.

UntitledMany consumers have come to expect faster, better and personally tailored responses to their individual needs.  They have grown accustomed to highly flexible, quick service providers like Amazon and Google.  They can report problems, check accounts, order products and make payments easily.  Today, a consumer or a business customer also can find providers of many products and services on the web, and compare their options.  And they can do it almost anywhere with smart mobile devices.  Those expectations are driving our client organizations to completely rethink how they relate to the outside world, as well as to each other as business-to-business vendors and buyers.

Leaders Must Be Increasingly Flexible and Innovative

Evolving business models will place a premium on organizational leaders who are adaptable, strategic and even ingenious in how they recognize and respond to a changing world. New technology can yield better, real time customer information, drive growth, reach new markets and create efficiencies and cost savings.  Much more than simply having a web page or a customer portal, organizations must look critically at all of their capabilities and limitations, especially in light of customers’ convenience and their greater access to information and to competitors.   Leaders must recognize a genuine opportunity or threat and be ready to act on it.  And, they will need to bring along their employees through both informing them of the urgency and motivating real change.

A leader who relies blindly on what has worked before, however successfully, runs the risk of being passed by competitors and left behind.  But there are risks for both fast followers and for trailblazers.  What will happen if an innovation bet fails?  Our interviewees cited the need for leadership courage, but courage balanced with clear strategic thinking.

Driving Appropriate Culture Change

These challenges and leadership needs naturally highlight the importance of skillful culture change.  An organization that fails to respond to a changing business model will see its market share, its profits and its reputation dwindle.  It will suffer demoralizing losses, both financially and in its human capital.  Employees will be required to shoulder the burden of new and different work demands, possibly with fewer co-workers, and a less certain future.  Some will mentally check out.  Others will vote with their feet and leave entirely, particularly in an improving job market.

Successful leaders must get ahead of the changes.  They must become masters of identifying the critical performance enablers of the existing culture, be it outstanding service, leading edge products or operational excellence, as well as the major change inhibitors.  Even more, they must be able to translate that understanding into a compelling view of the future and identify the right activities, policies and decision rules which will drive their organizations forward.

Too much reliance on the past will paralyze an organization that should be in motion.  Too much emphasis on new and different thinking and behavior could take it in entirely the wrong direction.   Leaders for the future must strike the right balance between the old and the new, and demonstrate the will to take action and drive change.   Leading towards the future will not favor the timid.

Optimizing Talent

Of course, culture change alone will not guarantee achieving success.  Part of instituting a new business model necessarily requires blowing up the old organizational structure.  It means reshuffling teams, roles and responsibilities, upgrading talent and placing new expectations and rewards in front of many employees.  Future leaders must be ready to face the inevitable HR consequences of change:  people feeling passed over or pulled in unpleasant new directions, hiring new and essential talent in spite of opposition, and moving employees out of their comfort zones.

Our interviewees told us that the talent implications won’t stop with just these leadership demands. They also include identifying the people who can be a foundation for the future and grooming them to be ready for it.  Several respondents told us how important it is to reach deeper into the organization to identify the leaders of the future, even if they weren’t from the traditional places.  They described the critical value of fully developing and utilizing female employees and minorities.  And they implied that some of the best talent may reside in younger people, too.

All of these considerations shine a different light on talent management.  Rather than having an exclusive focus on the rare, high-level “franchise players,” what emerges is an evident priority to look more broadly and deeply for essential future talents.  It means being talent scouts in the truest sense of that phrase.  And it means that senior leadership must think differently about talent and how to invest in it.  Saving money in the short-term on salaries and administration inevitably will result in higher costs later as the organization under performs.  It will simply delay the consequences and boost current profitability.  Our interviewees told us that their leaders need to think differently, and more often, about genuine, full-fledged talent management.

Putting It Together

We got terrific benefits as our clients shared their thoughts and concerns about the future with us.   Now you, too, have the opportunity to ponder what they told us.

How does this picture fit your organization?  Do you expect to face similar challenges?  Will the future place new demands on your leadership and your employees?  Are you ready to confront tomorrow and to make the necessary changes?  Or, will you be left behind?

Business Models vs. Strategy vs. Tactics

No three concepts are of as much use to managers or as misunderstood as strategy, business models, and tactics. Many use the terms synonymously, which can lead to poor decision making.

http://image.slidesharecdn.com/strategyandbusinessmodel-130425091417-phpapp02/95/strategy-business-model-and-business-plan-4-638.jpg?cb=1366881345To be sure, the three are interrelated. Whereas business models refer to the logic of the company—how it operates and creates and captures value for stakeholders in a competitive marketplace—strategy is the plan to create a unique and valuable position involving a distinctive set of activities. That definition implies that the enterprise has made a choice about how it wishes to compete in the marketplace. The system of choices and consequences is a reflection of the strategy, but it isn’t the strategy; it’s the business model. Strategy refers to the contingent plan about which business model to use. The key word is contingent; strategies contain provisions against a range of contingencies (such as competitors’ moves or environmental shocks), whether or not they take place. While every organization has a business model, not every organization has a strategy—a plan of action for contingencies that may arise.

Consider Ryanair. The airline was on the brink of bankruptcy in the 1990s, and the strategy it chose to reinvent itself was to become the Southwest Airlines of Europe. The new logic of the organization—its way of creating and capturing value for stakeholders—was Ryanair’s new business model.

Changing strategic choices can be expensive, but enterprises still have a range of options to compete that are comparatively easy and inexpensive to deploy. These are tactics—the residual choices open to a company by virtue of the business model that it employs. Business models determine the tactics available to compete in the marketplace. For instance, Metro, the world’s largest newspaper, has created an ad-sponsored business model that dictates that the product must be free. That precludes Metro from using price as a tactic.

Think of a business model as if it were an automobile. Different car designs function differently—conventional engines operate quite differently from hybrids, and standard transmissions from automatics—and create different value for drivers. The way the automobile is built places constraints on what the driver can do; it determines which tactics the driver can use. A low-powered compact would create more value for the driver who wants to maneuver through the narrow streets of Barcelona’s Gothic Quarter than would a large SUV, in which the task would be impossible. Imagine that the driver could modify the features of the car: shape, power, fuel consumption, seats. Such modifications would not be tactical; they would constitute strategies because they would entail changing the machine (the “business model”) itself. In sum, strategy is designing and building the car, the business model is the car, and tactics are how you drive the car.

Strategy focuses on building competitive advantage by defending a unique position or exploiting a valuable and idiosyncratic set of resources. Those positions and resources are created by virtuous cycles, so executives should develop business models that activate those cycles. That’s tough, especially because of their interactions with those of other players such as competitors, complementors, customers, and suppliers that are all fighting to create and capture value too. That’s the essence of competitiveness—and developing strategy, tactics, or innovative business models has never been easy.

Five Viable Online Home Business Ideas Today

There are many online home business ideas that can get you hooked. These ideas will not only make you earn plenty of income; they can also give you the conveniences of running an Internet business. You do not have to be bossed around for you to run an online home business; you are the boss. You can set up any schedule that you choose. You can relax as much as you want, provided that you still keep a close eye to your business matters. Most importantly, you can try out the online home business ideas in your head, instead of being involved in others’ business ideas when you are in an office.

That said, let us take a look of five online home business ideas that you can try today, along with their corresponding benefits:

Freelancing – Freelancing is one of the most viable home business ideas today. Freelancing simply means that you are going to offer your services to other people. Though for most instances an Internet connection is required for your freelancing business to take off, as long as you can build a client base, you are okay with freelancing. The Internet, however, is so vast, so it pays off if you are going to set up a business website for your freelancing.

Affiliate Marketing – In affiliate marketing, you promote the products of another business through your website. You make informative web content that will get customers to buy the products. Once customers have visited your website and bought the products, you are sure to get commissions. The more you work with your affiliate marketing, the more commissions you will get. You can work for many businesses at once through affiliate marketing.Blogging – Despite the proliferation of thousands of blogs in cyberspace, blogging still remains one of the hippest online home business ideas for you to try out. Just write down informative content, then promote your blog with online marketing techniques. Then once your blog gains some renown, you can sell advertising – that’s the way to make money with your blog.

Selling Products – Setting up an online store and selling merchandise can be a decent source of income. Selling products on auction sites can also do. Selling products can also be an expandable enterprise; you can use the capital that you get for growing your business. Selling products can be one of the most fruitful online home business ideas ever there. You can sell nearly anything that you want to sell – you can be sure that there’s someone around the world who’ll like what you sell.

Data Entry – Data entry is not only something that is done in a regular office; it can also become one of the online home business ideas that are the easiest to pull off. Just find data entry jobs on a regular basis, then start entering those data to where they’re supposed to go. You just need to be a fast, accurate typist who can spend long hours in front of a computer.

So there; you now have online home business ideas to choose from. Just choose the one you think you can handle best, then you do your best and let the money trickle in.

5 Business Model Components Every Entrepreneur Needs

Is your business on a collision course with a train, but yet you’re 100% focused on getting more people to like your Facebook page or follow you on Twitter?

Let me enlighten you: Big mistake.

If your core fundamentals are out of whack, so is your business.

Danny Iny, Founder and CEO of Firepole Marketing, is a guy who sees this everyday. And because of this, he is on a mission. As he stares down the face of one business failure after another, he sees major flaws in the way entrepreneursare taught. And yes — he is taking action to change it.

Dubbed the ‘Business Ignition Bootcamp’, Iny’s focus is to help business owners break through the madness and escape failure.

And guess what? Iny opened up the first module of his bootcamp so I could take a peek and share it with you.

Based on the 5 key Business Model Components from the best selling book ‘Getting To Plan B’ by authors Randy Komisar and John Mullins, module one addresses the importance of these 5 components on your road to entrepreneurial bliss:

1: Your Revenue Model

In a nutshell, this is your strategy to generate revenue. What you plan to sell, and what will convince people to buy. Value propositions, positioning, effective messaging, product/market fit. For example, when I say “Victoria’s Secret”, what comes to mind? Yes — good or bad they have a clear understanding of their revenue model and communicate it well. Although most business owners get the importance of this in theory — why do so many struggle? Perhaps because they really don’t get it after all. Do you?

2: Your Gross Margin Model

Yes — important for you to know how much of the pie you get to keep from each sale. Do you know your piece of the pie? For example, Walmart and Costco know they run low gross margins. Their value game is one of low pricing, so they can’t mark up their products by an exorbitant amount and still play the value card. However, let’s look at the legal service industry. It has, on average, a gross margin of 93.22 percent, according to Butler Consultants. Although I am not advocating you jump into the legal game, it’s critical for you to understand your own gross margin model. Can you see why?

3: Your Operating Model

If you’re Costco, it’s slash and burn the expenses. Which is why they operate out of huge bare warehouses with pallets stacked high of goods. No thrills, no frills, stack ‘em high, watch ‘em fly. However, if you’re in the legal service industry, it’s all about high style and lavish surroundings. Ever visited a big law firm on the top floor of a downtown New York highrise where both the views and service is breathtaking? Both businesses operate and make decisions based on the knowledge of their operating model. Do you have a clear understanding of yours?

4: Your Working Capital Model

Indeed, ‘cash is king’. Do you understand your cash flow requirements? As you may or may not know, cash flow is significantly different than ‘revenue’. For example, if you operate a bricks-n-mortar retail store on the main street in your town, you experience first hand the need for cash. You must spend cash to fill your store with product so it’s available when a customer walks in ready to buy. Thus, inventory sucks up a tremendous amount of your working capital. However, if you’re an author who strictly sells downloadable books online, your need for working capital is significantly different. Laptop, pair of pajamas and an account with Amazon can theoretically produce millions of downloads to create a significant cash river.

5: Your Financing (or Investment) Model

Number one roadblock I hear business owners complain about is lack of capital. Yes — it sometimes does take money to make money. But not always. So to understand the difference is key. For example, say you want to build a better hotel chain than Marriott or Hilton. Well, I can tell you this — you’re going to need some serious upfront financing to even stand a chance to pull it off. However, let’s say you plan to change the world by teaching people how to play the ukulele. Buy a video camera, launch a WordPress website and watch your video lesson series at $79 a pop take off like wildfire. Total capital investment? About 500 bucks.

Does business model innovation deserve more love?

business-model-innovationWhen you think of innovation it’s easy to slip into thoughts about some new technology or other.  Of course, that isn’t the be all and end all of innovation whatsoever, and it certainly isn’t the most important kind.

I’ve written previously about the valuable role process innovation often plays in converting new technologies into something useful and valuable in the way we work and behave.  What’s more, whilst buying a new piece of technology is often incredibly quick, changing our processes and behaviours often takes considerably longer.

We have technologies emerging that can fundamentally change the way our organizations operate, but too many organizations are simply dumping these tools onto the same industrial style processes that existed previously.  The social technologies are generally good enough already, it is the organizational processes that will need to evolve for the productivity gains from social business to fully materialize.

Of course, process innovation isn’t the only unloved element of the innovation landscape.  Business model innovation is often just as unloved as the un-sexy sibling of technological wizardry.  A new paper underlines why we should be giving our business models as much attention as our technology however.

The research, led by Wharton’s Raffi Amit, suggests that business model innovation can be especially valuable in challenging times as it usually involves recombining existing resources within a firm rather than expensive R&D.

For instance, the iPod was a change in business model for Apple, because it allowed them not just to make money from selling the gadget, but also from how people are using the gadget.

The researchers propose a mnemonic called NICE (Novelty, Lock-in, Complementaries), by which managers could assess the current state of their business model.

The paper found that the process used by IDEO for designing products could equally be applied to that of business model design.  This results in a five phase process approach being created:

  1. Observe – how do people use your product or service?  What do they like and dislike about it?  When do they use it and how are buying decisions made?
  2. Synthesize – take the information you’ve gathered above and pull it together into something tangible.
  3. Generation – you then generate various models of how you could potentially do business
  4. Refinement – these models are then refined by vigorous thought and analysis
  5. Implementation – before the most robust is then implemented

Of course, this process should never be a one off event but rather an ongoing process of sense and respond.  The paper suggests that to do this requires employees to shift from a silo’d mindset towards something more holistic, whereby they see things from an organizational perspective.

From a managerial perspective, there’s a need to shift away from thinking as design as something that only applies to products towards something that applies equally to business models.

Generally speaking however, organizations lack the capacity internally to undertake this continuous analysis of their business model, and so organizations need to build this capacity in order to stay on top of changes in their environment.

Does your own organization have the capacity to do this?  How important is business model analysis to you?

What are some examples of different types of business models in major industries?

As an important aspect of a comprehensive business strategy, a company’s business model is a representation of its core business practices. Despite the size or industry in which a business operates, a business model details how an organization creates and delivers products or services, specific business processes, infrastructure, customer acquisition strategies and the intended customer base. Brick-and-mortar and e-commerce form two categories under which business can operate. In the current business environment, business models come in a variety of forms that include direct sales, franchise, freemium and subscription models.

Business Model concept on sticky notes sun

Direct Sales

Under a direct sales business model, sales of products or services generate revenue through a network of salespeople who sell directly to customers. Typically, no fixed retail location exists under a direct sales business model. Instead, individual salespeople are connected with a large parent company and given the tools to become individual entrepreneurs.

Direct sales takes place through presentations or demonstrations of the product or service in a one-on-one setting or during a hosted party at a prospect’s home or business. Business owners in direct sales earn a portion of their sales, while the company providing the product retains the remaining revenue. Companies such as Avon, Arbonne and Herbalife are examples of the direct sales business model.

Franchise Model

Under a franchise business model, business owners purchase another organization’s business strategy. Instead of creating a new product and the distribution chain to deliver that product to consumers, the franchisee purchases an ownership stake in a business model that has already been successfully developed. The company offering its proprietary product or service, its business processes and its brand is known as the franchisor, and it benefits from a reduction in capital output used to build new locations.

Franchise owners earn a portion of the revenue generated by their locations, and the franchisor collects licensing fees in addition to a percentage of sales revenue from the franchisee. Popular companies that depend on the franchise business model for growth include McDonald’s, Subway and Starbucks.

Freemium Model

For companies that offer personal or business services via the Internet, the freemium business model is common. Under a freemium model, business give away a service at no cost to the consumer as a way to establish the foundation for future transactions. Companies that offer a basic-level service for free build relationships with customers and eventually offer advanced services as add-ons or advertisement-free options at a cost. The freemium model tends to work well for Internet-based businesses with little customer acquisition costs but high lifetime value. Spotify and Skype both operate under a freemium business model.

Subscription Model

Businesses that operate in an industry where customer acquisition costs are high may operate under a subscription or recurring revenue business model. The objective of a subscription business model is to retain customers under a long-term contract and secure recurring revenue from repeat purchase of a product or service.

Companies operating online create subscription models that require the customer to sign up for automatic payment plans, and they may charge a cancellation fee for a contract that ends prior to the preset time frame. Credit monitoring organizations such as Experian and Equifax use a subscription business model, as do utility and phone companies.

Defining Your Business Model

A business model isn’t something you build from the ground up. When management-types ask about a business model — as in, “So what’s your business model?” — they really want an answer to a much more direct and basic question: “How do you plan to make money?”

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Behind that question is a lineup of other questions:

  • Who’s your target customer?
  • What customer problem or challenge do you solve?
  • What value do you deliver?
  • How will you reach, acquire, and keep customers?
  • How will you define and differentiate your offering?
  • How will you generate revenue?
  • What’s your cost structure?
  • What’s your profit margin?

During the 1990s, when the business world was buzzing with talk about a new economy and new business rules, people — even business gurus — seemed to forget the part about making money, and businesspeople sidelined the use of business models. But when the dot-com boom began to bust, suddenly everybody started asking about business models again.

Staying in the black

Sooner rather than later in the business-planning process, you need to invest a good chunk of time delving into the nitty-gritty details of your company’s finances — your income statements, balance sheets, cash flow, budgeting, and all the details that can make or break your company’s future. At this point, however, your assignment is way more basic: Figure out where the money will come from. Who will pay? How much? How often? And what portion of every sale will make its way to your bottom line in the form of — here’s the magic word — profit.

Following are terms that you hear on your journey to profitability:

  • In the black: If your revenues exceed your costs, you’re in the black.
  • Red ink: If you’re not in the black, your company is losing money, which means that you could be drowning in red ink.
  • Fixed costs: Your business will have plenty of costs — from renting an office and buying equipment to paying salaries and buying supplies. Some of these costs — office rental or salaries, for example — don’t change often and must be paid on a regular basis, no matter how good (or bad) your company is looking. These are fixed costs or overhead.
  • Variable costs: Other costs, called variable costs, fluctuate with your sales volume. They include the materials that go into producing your product or service.

To keep out of the red ink, you need enough money coming in to cover all your costs. But to break into the black, you need to price your goods and services to cover your costs plus a little (or more than a little) for your bottom line. That’s called profit. Don’t leave your business plan without it!

Timing your future

How you expect to make money is one part of your business model, but when you expect the money to roll in is another important factor. Some companies run up costs and spend cash months (even years) before a revenue stream begins to flow. For that reason, your business model must include a timeline that takes the following into account:

  • The upfront costs you expect to incur when setting up your business
  • The source of funds to pay for your upfront costs
  • A schedule showing when you expect revenues to pour in

The question of timing isn’t only for big companies with factories to build and products to design. Timing can have a real impact on businesses of any size.

Knowing how customers pay

An effective business model also takes into account how customers pay. When customers buy a product or service, they typically have a number of payment options. The most common choices include paying in one lump sum or spreading the purchase price over monthly installments. In some businesses, customers also have the choice to pay as they go or to prepay for unlimited use of a product or service. Other times, a company invites customers to buy or to rent, to finance their purchases, or to lease products instead of purchasing them.

Each option has financial consequences that affect your business model. As you establish the purchasing options you plan to offer customers, consider how each selection will affect your revenue picture.

Creating a business model that works

Some business models are as old as the marketplace itself; others are as new as the Internet. Some have weathered the test of time; others are almost experimental.

The simplest model involves creating a product and selling it directly to customers. Other models involve selling wholesale to retailers, selling through distributors, licensing products to other companies, selling online, selling through auctions, and countless other alternatives. No one-size-fits-all solution exists. In fact, most companies use some combination of business models to arrive at a unique model.

5 Ideas To Increase Productivity & Make A Difference In Business

1. Get Clear On What You Do
If you are not clear on what your big mission is then you are more likely to get distracted. It can be that simple. You need to spend a little time each day getting clear on what you are doing and why you are doing it. And understand that this is a gradual uncovering. Each day, you may find that you are just a little more clear but does that mean you wait until total clarity? Of course not. You begin anyway and as you consistently do the work and experience more of what you think you want, then you get clearer about what you want in your business and life and what you do not want.

Clarity around your big purpose keeps your eyes on the prize and you stay on path and it helps with the next point which is to prioritize.

2. Prioritize
Each day, as you get clear, write out the actions you need to take to move yourself forward. And then prioritize them. Keep your eyes firmly on the prize as you see it that day and then ask yourself the question “How is it that I am doing blah, blah, blah?” You fill in the gap of your vision for your life.

When you ask yourself that question, your brain gives you ideas of what you did to get to your ideal place. I hope this makes sense. This is starting with the end in mind. Too many people start with the beginning in mind. How can you get to where you want to go by doing exactly the same as you have always done? Your actions to date have brought you here so you need to implement new actions in order to move to your new destination. So, picture yourself living a life you love and having built a business doing what you know your mission is and ask yourself how you got there. Write down the steps as they occur to you and begin doing them.

3. Simultaneous or sequential?
In the western world, we are addicted to step-by-step plans. We want growth to be linear. We mostly think that you must do one thing and then the next thing. Unfortunately, hardly anyone has that much time on the planet. IF you have a big idea, a big goal, a big mission to fulfill, you will find that you never create that much traction if you choose to be sequential.

You must take a simultaneous approach where you do a few things at once. Yes, this may mean realizing that you cannot do it all alone but that is fine. Get someone else or a few other people to help you out. Sell them on your vision and see if you can get them to volunteer and if that is out of the question (which it more likely will be unless they are family members!) then choose to pay someone to help you with some things. No matter how productive you become, you cannot do everything and still the demand is on you to be simultaneous.

4. Add in some physical exercise
I know you think you have no time to do anything else but if you already feel you are spinning wheels and getting nowhere fast, why not include some physical activity into your day. The time away form your business and the blood flowing to your brain could make a huge difference to your creativity and innovation. And you need a whole lot of that when building a big idea.

It is tough at the beginning not to consider this a waste of your time but when you start to experience the increased productivity that comes from taking time away from working, working, working, you may be surprised to see how much more you get done by looking after your body.

5. It is easier to change the direction of a moving vehicle
Get into action!
Don’t stand still waiting for all your ducks to line up perfectly. You get nowhere that way. It is so much easier to pivot if you are already moving. When you are stuck in the mud, waiting for perfect clarity, you cannot know what will work or what will not. You have to actually experience things first and discover what works for you and what does not. And as you determine to keep being productive, you can change direction having experienced something you do not like. Or you can stay on course but ultimately, you have to be moving tofigure thigns out.

Too many people think that clarity is found in trying to figure it out while standing still and trying not to make any mistakes but all that results is that more time is lost and still nothing changes because they have done nothing.

Do not make this mistake. Move, even when uncertain. You will get more certain, the more results you get. Good or bad, they are all feedback to inform your next move.

  Author :Rosemary Nonny Knight

How To Apply For A Small Business Internship

Create the Ideal University Graduate Resume

Just over one and a half million American university students will graduate this year. A percentage will leave without any work experience, but some will begin their post-university job hunt armed with a comprehensive resume. Some graduates will apply for an internship with a small business, mindful that internships often lead to full-time employment.

A good resume should catch the reader’s attention and create a great initial impression. A prospective employer will find it difficult to ignore an excellent resume.

A career expert knows how to form a compelling resume for a recent graduate with some work experience, so what type of information should the ideal resume contain?

A Link to your Professional Profile

Every resume will differ depending on the graduate’s skills. But, the resume should have a link to your professional profile. All graduates should ensure they create at least one online profile and those who work in creative fields should also consider forming an online portfolio. Naturally, the portfolio should contain a backlink to their personal information. A small business internship Melbourne is the first step on the employment ladder, and internships give graduates the opportunity to earn whilst they learn.

Write a Professional Summary

Many American university graduates are tempted to use buzzwords in their professional summary; however, small business recruiters consider words such as “motivated” or “proactive” as fluff. Avoid telling a prospective employer that you are an excellent team player; tell them about the tactics used to make your team successful or how you were acknowledged for your worthy voluntary work. Internship placements are limited, but internships are perfect for graduates looking to further their career.

Enter your Score

Include your examination score in your entry-level resume. Fail to enter your score and you will be asked about it during the interview.

Avoid Mentioning High School
Employers are not interested your achievements prior to university. Any small business employer will be keen to offer an internship to a dynamic graduate. Highlight your recent accomplishments, activities, work experience and other personal accomplishments. Focus on any aspect that supports your job application and hunt down the best graduate internships.

Include Details of Course Work

If you are a job seeker who has completed an internship or any other extra-curricular activities that demonstrate your marketing and sales skills, there is no need to note you have studied the “Principles of Marketing” or taken an “Introduction to Communication”. A small business employer will look at your degree in communications and take this as read. However, students who have no experience of internships should include a list of courses they have taken.

The Use of Pronouns

A percentage of students feel it is right to personalize their resumes, whereas others refrain from using pronouns such as “me” and “I”. Experts state students should avoid using pronouns or referring to themselves in the third person. For example, “He is a recent graduate” or “Shane is seeking the opportunity to”.

Using Action Verbs to Describe Roles and Responsibilities

Look at the example listed above and note that each begins with an action verb. The words fail to mention Shane’s accomplishments. Graduates may have few major achievements or contributions to add to their resumes, but small business employers like to see the use of action verbs. Good action verbs include developed, built, created, led, improved and managed.

There is no need to include a List of Referees

Graduates seeking internships feel bound to state that references are available on request. However, an entry-level professional is allowed to create one page of resume real estate. Add this information and you waste valuable space. If you are invited to attend a face-to-face interview for an internship the small business employers will ask you to provide references.Small Businesses

How to Make a Small Business Famous on the Internet

The days when getting traffic on a newly launched website was so easy, are long gone now. Today it is very difficult for small businesses to get traffic with a limited time as well as budget. This is the main reason why the small businesses become a victim of black hat SEO and up penalizing the websites.

The big question today is,

How small businesses are going to survive in this complicated web of SEO, social media and off-page marketing?

The answer is implementing a few strategies that are correct in order to do SEO, SMO, and other sorts of online marketing. Here are a few of the strategies needed to be done to get a maximum amount of traffic on the website.

1. Claiming Local Listings

Local SEO, a process using which websites are optimized to rank in the top of SERP in the local search. Local SEO is very important for small businesses as they can focus the geo-locations very easily. For claiming the business profile on local SEO, use Google my business. After that provide maps so that the customers can easily navigate to the final destination. Also, make use of the Click-To-Call feature on user’s mobile phones and ask the audience to give reviews so that the customers will read it and it will affect the local search rankings. Getting reviews from satisfied customers also helps in building the credibility of your brand.

2. Creating a Mobile-Friendly Website

Mobile is the source of local searches. It has also been proved that number of mobile searches has outnumbered desktop searches in almost 10 countries. Also, after mobilegeddon, the businesses should seriously think of responsiveness otherwise get ready to face a drop in search engine rankings. From now on, make sure the template on which the website id getting designed is responsive. This is the main reason why taking web designing services from experts is always recommended.
3. Building Local Citations

Citations can easily be understood as mentions of the business on the web. The mentions can also be in the form of links including the address and contact information of the business.

4. Be active on all social media platforms

Social media is the biggest tool for getting famous online. Therefore, create a business account on Facebook, twitter, Google +, Instagram, Slideshare, LinkedIn, and other. Instead of focusing on only one, pay attention to all and see a drastic increase in the number of online traffic.

The Bottom line

The list mentioned above doesn’t to here, a lot more is there to add. There might be some strategies that work even better for you. Do share them within the comment section. If you are also a small business and are looking for affordable digital marketing services to increase traffic, then contact us. You could also state you opinion/issues in the comments below. We’ll definitely revert.

 

Tips On How To Organize A Home-Based Business

While a home-based business may sound like a luxury you simply can’t afford, there are actually many considerations to take into account, other than the short commute from your bedroom to your home office. Just like any other job, a home business has its benefits, as well as its drawbacks. The following article provides you with all the information you need to decide if a home-based business is for you.

To make sure you aren’t paying more than necessary for your car insurance, be sure to ask about discounts. For example, some drivers might be eligible for reduced rates for passing a defensive driving test. Students can sometimes get discounts for good grades, and seniors who drive less can also get reduced premiums.

Once you’ve decided on a product to sell, do your homework and check out your competition. Look at their prices and study the quality of the goods that they are selling. Make sure not to price yourself out of the market, and figure out how to deliver the best value to your customers.

Set up an advertising and promotional item budget for your home business and make sure you stick to it. Advertising, free products, printing and more can add up quickly. When you stick within your allotted budget, you help your business stay on track. Your budget will grow over time and you will be able to spend more money to promote your business down the line.

It important to have a support network in place when you’re running a home business. It can be a good idea to set up your own home business network to easily communicate with other businesses. The people may not work in the same industry, but you will have one thing in common, the motivation and drive to have a successful home based business.

Join home business forums and discussion groups online. This will allow you to network with others in your field and spread the word about your business. You don’t know where you can make a sale or what the right contact can lead you to.

You should know the product you are selling. Study it, inside and out, before you try to sell it. You may also want to test the product out so you know what it does. This way you will be able to describe it to your customers in a knowledgeable way.

You are likely going to need additional insurance to cover your home business. Check with your insurance agent to learn if there is any insurance that is required by law or that will protect you from any kind of financial fall-out if anything negative was to happen. Your agent will be able to help you or send you to a company that can.

If some people are still using old-fashioned checks to buy your products, deposit them immediately after receiving them. Make a deposit every day instead of having cash around. Always deposit your checks as soon as you get them. Whenever convenient or possible, do your deposits through a human teller, instead of a machine. This helps money go into your accounts without issues.

Do not fall prey to all of the ads that promise you that you can make millions from doing a business within a few weeks. They are not realistic and you would be setting yourself up for disappointment. Understand that you must work hard and stick with it in order to make anything and that the harder you work the more you will make.

From finding a product or service you can market to working around your family’s schedule, starting a home business poses many challenges. However, the perks make it an opportunity well worth considering. The tips in this article can help you decide if working from home offers more pluses or minuses, for your particular situation.

Top 15 Myths About Business

There are a lot of misconceptions, myths, bad advice and outright lies about what it takes to be successful in business.  And most of those are continually spread by people who have never gone into business for themselves.  Unfortunately, some of them are spread by people who went into business, failed at their business, and then were looking for an excuse to shift the blame away from themselves.  Regardless of where you heard them, you will no doubt be familiar with some of the following myths.  You may even have been guilty of passing them along to someone else with the best of intentions.  I used to believe several of these myself, but my own experience, and better yet, learning from others’ experiences, I found that they were false.  Let me share with you 15 of the most common myths about doing business.

In no particular order, the are:

  1. To be successful you have to be first.  This is also sometimes reworded as “the first in, wins”.  While there are some cases where there is such thing as “first mover advantage” it does not guarantee success.  Remember the leading edge is also known as the bleeding edge.  If you had to be first, then explain to me the success of Dell and Microsoft.  Dell was not first in the PC market.  Microsoft was not first with the GUI or the word processor or the spreadsheet, yet it dominates in all those areas.
  2. To be successful, you have to be cheaper.  Oh really?  Please explain to me the success of Nordstrom, Mercedes, and Ferrari.  None of them are the price leader (cheapest) yet all have successful pieces of the market.  Take an SBA (Small Business Administration) course and they will tell you that if your only competetive point is to be cheaper, don’t bother starting your business.  Any dominant company can start a price war and likely wipe you out.  One notable exception to this is Southwest Airlines where they survived price wars because they also had an advantage in lower costs of doing business.  And they are known for friendly service, not just low prices.
  3. I’m a good cook so I should start a restaurant.  This is one of the most abused myths.  It is often brought on or exacerbated by well-meaning friends and family who say things like, “Hey, this meal is fantastic!  You should start a restaurant!”  There is more to running a restaurant than having a good recipe and being able to cook well.  You will also be involved in buying, budgeting, payroll, managing employees, and taxes, just to name a few.  Do you enjoy cooking or do you enjoy running a business?  Maybe you’d make a great chef in someone else’s business.  Or maybe you should get a partner to help with the rest of the business.  Or maybe you’ll learn everything you need to do.  Whatever it is, rest assured there’s more to the restaurant business than just cooking.  This of course is true of every business.  There is more to running an independent programming firm than just writing software.
  4. The customer is always right.  No.  No they’re not.  And sometimes you have to tell them so.  In fact, sometimes they are so wrong that you will actually have to tell them you don’t want them as a customer any more.  It’s a tough thing to do if you only have a couple of customers, but sometimes they cost you more money than you make from them.
  5. I’ll just open my store and people will stream in off the sidewalks and buy from me.  This is also known as the “If you build it, they will come” approach to business.  HA!  You will more likely be out on the sidewalk begging people to come into your store just to look around.  Consider advertising.  Word-of-mouth is the best because it is the most effective and the cheapest.  If you can get personal referrals from friends and family, great!  If you can get free publicity, awesome!  One of the reasons that Amazon.com does as much business as they do is that they have a loud-mouth CEO who went around for several years telling every reporter or anyone who would listen that Amazon is “the world’s largest book store”.  It got them business.  Now they need to work on that profitability thing.
  6. It’s a cool idea.  Everyone will love this.  That may be true, but will they be willing to spend any money on it?  As an entrepreneur, one of the phrases you learn to hate is “That’s a cool idea” when it’s not followed up by “I’ll buy some.”  Just because you like something doesn’t mean enough other people will like it.  A large number of the dot-com busts were cool ideas that were not backed by good business plans, even though they were backed by money.
  7. Ours is better so we’ll be successful.  Many people considered Beta to be a better video recording format than VHS, but VHS won the battle.  Quality is important, but so is marketing and timing.  Remember the Apple Newton?  Today we have TabletPCs.  The Newton was probably the right product at the wrong time.  In my opinion, that is one of Apple’s consistent problems.  They come up with really cool things but are just too far ahead of the market for their new cool thing.
  8. Adding more people to the project will make it go faster.  I run into this all the time in the software business, but it does appear that more and more people are learning the fallacy of this statement.  The truth is that adding more people will make it go faster up to a point.  But more people means more complicated lines of communication.  It also may mean that some productive people currently on the team are slowed down as they help the new people get up to speed.
  9. We’re good friends.  We will work well together / We should form a partnership.  There are certain reasons that your friends are your friends and they don’t necessarily go well with conducting business.  For one thing, friends don’t necessarily have the same work habits.  And it’s easier for a person to take advantage of a friend’s willingness to forgive their laxity.  Before you consider forming a partnership, get a really good lawyer.  Mine reminded me that people act funny when money is involved.  And he refuses to put together the paperwork for a partnership unless they also define the terms for dissolution of the partnership.  Even if people don’t take advantage of each other, things happen.  What if one of you has a major life-changing event happen and no longer wants to participate in the business.  You’re still liable for decisions made by the other party until the partnership is dissolved.
  10. Failure is bad. / Failure is the opposite of success.  This is a myth that is ingrained in us from our schooling where you were graded on an average over the year’s worth of work rather than on whether at the end of the year you really understood the subject or not.  In reality, failure is an integral stepping stone toward success.  How many times did Abraham Lincoln fail in politics before becoming the 16th President of the United States?  How many times did Byrd or Peary fail in their attempts to reach the North and South Poles?  Failure is only a problem when you allow it to be the final stage.  Otherwise it’s just learning.
  11. Knowledge is Power.  Then librarians are the most powerful people in the world.  No disrespect to librarians, they’re great and valuable, but unless the knowledge is applied, it is just potential.
  12. Every customer is equally valuable.  Setting aside the discussion of each person’s inherent value as an individual, in business, some customers are worth more than others.  Some customers are more trouble than they’re worth.  I prefer to treat all my customers as valuable, but if I have to decide how to stretch scarce resources like my time over different customers needs, then one may be more valuable than another.  However, the trick here is that the customer who will pay you more now is not necessarily the one who is truly more valuable to you.  If I have a customer today who is willing to pay me to do a year’s worth of work in VB6 and another one who wants 4 months of work in ASP.NET, the shorter one may be more valuable because it moves me in the direction I want my business to go, even though it’s not as much money right now.
  13. Profit is all that matters in business.  Well, yes, profit is important, but Cash Flow is more important.  I suppose you thought I was going to say something about being fulfilled in your work or being moral.  Those are important, but I find that more people overlook their cash flow than overlook their morals.  Profit can just be a trick of accounting whereas cash flow controls whether you can stay in business.  Many companies go out of business due to cash flow challenges, even though they were profitable on paper.  Your creditors are not interested in how profitable your accounting statements say you are if you don’t have the cash to pay them back.  But don’t sacrifice your morals to get the cash, either.
  14. Having more customers is better than having fewer customers.  Would you believe that some companies go out of business because they have too many customers or too much demand for their product?  Now that would be a depressing way to go out of business if you ask me.  If a company manufactures and sells a product, it can get inundated with demand and not be able to keep up the production to meet demand.  Then the customers who are delayed in getting their goods are unhappy and may cancel their orders.  If word starts to spread that the company is incompetent, it could really be the death-knell.  Or more likely, another company will see the demand, come into the market with greater capitalization and capacity, meet the unmet demand and take away your customers.  In the software business, having too many customers all demanding your primary scarce resource (time) can wear you down leading to poorer quality and possibly errors, which in turn might lead to lawsuits.  Sometimes you have to turn down customers who want your services.  It can be a touch decision to make, but sometimes it’s necessary in order to maintain good relations with your other clients.
  15. Venture Capital and IPOs are good.  This fallacy really took hold in the dot-com boom.  Thousands of companies were scrambling after venture capital, doing IPOs and promising their employees the moon.  Venture Capital and the capital markets (IPOs) have their place in the growth of business, but before you go craving it remember that you are forfeiting complete control, and possibly any control over your business.  A publicly traded company has TONS of more paperwork it has to process just to meet all the legal requirements.  Venture capital firms typically want a significant, if not controlling, interest in the company in exchange for their money.  Once you have done either of these, then somebody else really owns your business and is in control.  How do you think that Steve Jobs once got fired from Apple computer, the company that he founded?  He did not own it any more.  The stockholders did.  The same can happen to you, even by your “white knight” venture capitalist “friend”.

How to Start a Home-Based Facial Business

Unlike many business ventures, a home-based facial business has relatively low start-up costs and can be set up fairly quickly. In order to run a successful facial business, though, you need to ensure your state license is in order and obtain all necessary health, safety and business permits required to run the business out of your home.

Get Licensed

Most states require that individuals have an active state cosmetology or esthetician license to perform skin care services like facials, so make sure yours are up to date.

Exact skincare licensing requirements vary but, in general, licenses require a few hundred course hours and may need to be renewed periodically. Visit your state Department of Consumer Affairs website for more information.

Make Your Space Customer-Centric

To make your facial business successful, you need to provide your clients a relaxing, professional and soothing environment. Evaluate the space in your home and optimize it so it meets those standards. BeautyBiz notes that some questions to ask yourself are:

  • Can you designate an entrance for your treatment room that’s distinct from your home entrance?
  • Is there a separate bathroom your clients can use?
  • Do you have a separate room you can use for the facials?
  • Do you have a waiting area for clients to relax in before the treatment begins?

Get Business Permits and Licenses

There are a handful of licenses and permits involved in operating a facial business out of your home. The U.S. Small Business Administration notes that most business owners need to obtain a general business permit from their city or county, and many localities require a special Home Occupation Permit for home-based businesses.

Warning

  • The Small Business Administration notes that your city or county may require that your home pass a health and safety inspection before you start seeing clients. Contact your city’s business tax and licenses division for more information.

Protect against Liability

If you accidentally hurt a client or a customer injures themselves on your property, you could face a lawsuit. Hiscox recommends that estheticians purchase both professional liability insurance and general liability insurance to protect themselves financially.

Stock up with the Right Supplies

Buy the equipment you need and stock up on supplies. At a very minimum, you’ll need chairs, couches, tables and towels to operate your facial business. You also may want to invest in a hot towel cabinet, gowns, a facial system and storage and carts.

You’ll need supplies, like gloves, applicators, mixing dishes, jars, measuring cups, facial brushes, facial masks and eye masks to do your work. Talk to wholesalers to get the best prices on supplies.

Get the Word Out

Start marketing before your salon opens for business. Join a local chamber of commerce or beauty business association to connect with other local business owners in the area. Make flyers promoting your new salon and drop them off at businesses in the vicinity.

Create a Facebook page, a Twitter page, and an Instagram account. Start connecting with individuals and businesses through your social media outlets. You also may want to call local newspapers and media outlets and let them know that your business is about to open.