How to Develop Business Models for an E-Business
A business model for an e-business is very similar to that of a traditional brick and mortar business, with some exceptions. E-businesses are able to cut their overhead costs significantly, but they must also allocate larger resources to their technology. Overall, an e-business is typically less expensive to run. One of the most important parts of the business model for an e-business is the marketing budget. In fact, this is the make or break part of most e-businesses.
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Instructions
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1
Decide on the type of e-business to start. Will it be business to business (B2B) or business to consumer (B2C)? Does the business provide tangible products or services? Or does the business provide a brokerage service, information or subscriptions?
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2
Develop an overview. Write down what the business does and how it makes money, what products it sells and what the business goals are. This sets the intention for the business. By defining some of the more macro areas of the business, the business model is kept on track, as the overview provides a framework for the rest of the details.
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3
Define all areas of the business. Start by defining all expenses. Exact numbers do not need to be provided, but a comprehensive list of all expenses does need specific numbers. For example, most e-businesses will need product X, marketing, web design and hosting. Include salaries for all key personnel as well. This will provide a template for expenses and costs.
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4
Determine budgets. Determine start-up costs, and operational expenses. Each business will have a different working budget and that budget will determine the scope of the business model. Research is extremely important, as variances in estimates can cause major problems. Fortunately for many e-businesses, a just-in-time (JIT) inventory system can help lower operating expenses.
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5
Write a business plan. Incorporate the information gathered in steps 1-4 into an actionable business plan. Use a business plan software like Business Plan Pro to help organize the plan. The software offers templates specifically for e-businesses.
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6
Develop a marketing plan. Traditional marketing methods can work for an e-business. However, most e-businesses focus heavily on web-based marketing solutions. CPM (cost per thousand impressions) and CPC (cost-per-click) banner advertising is popular. Many companies focus heavily on search engine optimization (SEO) to drive traffic to their website.
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References
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