Start-ups need to establish their business model early

To ensure start-ups don’t ‘crash and burn’ in their infancy, it’s important from the outset to work on laying the right foundations for future success. All too often we find that start-ups struggle from day one due to a poorly conceived business model.

One of the hallmarks of a well thought out business model is its ability to attract potential investors and if you can’t, you need to ask why not?

Get the business model right

What’s essential to any start-up’s business model is a realistic understanding of why a product is good, and why potential customers (and investors) will beat a path to its door. The number one reason for why startups fails tends to be due to no market need for the product; and running out of cash is a close second which is likely due to little interest in the product because of no perceived market for it. 

One of the best ways to ensure all the right fundamentals are in place is to pitch the business model to people who will ask you the tough questions about your product.  By pressure-testing your business model, especially with those experienced in dealing with start-ups of all shapes and sizes, you’ll be forced into brutally addressing key questions.  This will only better prepare you when you get to the stage of pitching to future partners or investors.

Know the market and its sustainability

There are myriad questions around why a product might be good, none the least being the cost of acquiring customers and their lifetime value to the business. But if we take a giant step back from here, what startup business models typically lack is a clear enough understanding of their core market/s, how big they are, and potential for expansion.

customer-support.pngOne of the other common failings that most start-ups also share is a clear understanding of their competitive advantage, and its future sustainability.

Start-ups have great passion for the products they develop and for being surrounded by people who share that enthusiasm for building a great product. 
While not wanting to distract start-ups from their work, start-ups tend to overlook key elements integral to the journey they’re on.

But given the ever growing network of resources now available to Australia’s bourgeoning start-up community, there is plenty of support available to assist start-ups to achieve their goals. 

Seek Help Early To Establish Your Business Model 

By seeking the help to establish your business model as early as possible, you’ll significantly improve the commercial viability upon which your future business success depends.
Please do not hesitate to contact the team from RSM Evolve if you have any further questions.

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