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Your Business Model

1. What Is a Business Model?

Basically, the business model is how you will make money. There are many academic definitions and dissertations of the business model, but for your purpose, it is a model or procedure detailing how you will make money in the Internet research business. Do not confuse the business model with the business plan, which is covered in Chapter 12. The business plan contains elements of the business model, but it deals with a broader business perspective including how you will finance and grow your business.

You should develop a business model for a number of reasons. The main reason is to make you think about how you will actually do the business. Another reason is that as you write down the way you will work, you will probably think of more aspects of doing the business. Once you have developed your business model, and are working it, it will help you to stay focused on what you are doing.

The following sections explain what should go into your business model. The examples used in each section of this chapter relate to a fictitious lawyer background information service.

2. The Business Opportunity

Academics call this first step in the business model the Value Proposition. This is the area in which you define what you think might be the client’s problem that he or she wants solved. Then you explain how you will solve the problem for him or her. You also want to identify what the value of your problem solution is to the client. This will confirm the viability of your business, and the points you identify here will also be useful in your marketing and sales.

Example

As a court reporter, Ms. B noticed that quite often lawyers needed background information on side issues of a case, such as what the weather was like on the day of the incident under trial, the statistical number of similar incidents that take place in the defendant’s occupation, etc. The lawyers have to get this information from somewhere, and Ms. B figured she could do it for them very cost-effectively.

3. What Is Your Market?

You need to identify what or who your market is, where it is, and how big it is. First you have to carefully define who would want your services so you don’t waste your time and resources going after the wrong companies or people. Client definition (defining your target market) is very important because it will be the basis for most of your other business activities, such as marketing. Be prepared to give it considerable thought.

Next you want to identify where your potential clients are. Are you going to target clients in your city, in several cities, or in the whole country? Your thought process will also have to involve the size of the market. You will want to cover a wide enough area to ensure you have sufficient potential clients, but you don’t want to overdo it and bite off more than you can chew.

Here is where you use your Internet research skills to find the information you need for yourself. Using your defined description of your potential clients, find out how many of them there are in a particular area. For example, if you are targeting electronics manufacturing companies, do an Internet search for electronics manufacturers plus the initial area you are considering. As the various websites listing these companies come up, scrutinize them to make sure they are the ones you want, and start counting. Then expand your search as you require. Keep a record of the sites with the company information because you will need that information later for your marketing activities.

Example

Ms. B defined her potential clients simply as lawyers. She then did an Internet search for lawyers plus her city. Several sites came up, but the Yellow Pages site listed what appeared to be all of them. She simply counted those listed. She also went to the Internet site of the law society covering her jurisdiction, and estimated the number of lawyers listed there. She determined that her client base was somewhere around these two numbers.

4. Your Marketing Procedure

Marketing is the way you promote your business to prospective customers. You cannot have a successful business without some form of marketing. It can be anywhere from simple word of mouth to a series of television ads. Your marketing procedure is probably the most important part of your business. This is how you tell potential clients about your service and get them interested in it. Spend as much time as you can developing it. Chapters 6 and 7 lead you through the marketing process for your business.

Example

Ms. B determined that she could not rely on word-of-mouth promotion because of the nature of her business. She decided that the best way for her to tell potential clients about her service was by direct mail, with a convincing letter, and a handy reply form that clients could mail or fax back to her. She also had to start with a small number of lawyers, rather than target all of them in her city at once.

5. Your Sales Procedure

For the purpose of this book, “sales” is considered the activity of closing the deals and getting contracts. This happens once you have potential clients interested in your service. Your sales procedure is therefore as important as your marketing procedure. Both have to exist in a successful business. Chapter 8 discusses how to get the contracts, or sales procedures, that should work for your Internet research business.

Example

Ms. B realized there were several different ways of handling the sales procedure after a successful marketing contact with a potential client. It all depended on how the client responded to her marketing, and what she asked for. She also realized that she would have to move fast when that client response was made, so she decided to outline suitable answers to the various client responses.

6. Your Project Work Procedure

Your project work procedure is the way in which you will do the work. It is also what many consider the fun part of the business. Chapter 11 goes through this aspect of the business in detail. You first have to verify that you understand what the client needs, and not necessarily just what he or she asked for. You then do the search using appropriate search engines and Internet sites, making sure the information you get is accurate. Finally, you have to write a report that will be the product you deliver to the client.

The work procedure is standard for any Internet research business. However, make sure you consider each aspect of it with regard to your business. Chapter 11 will help you do this.

7. Your Delivered Products

The main item to be delivered to the client is the report on your research findings, but you also want to include some other items. Of course you want to get paid, so you must include an invoice or bill. If there is a potential for follow-on work, you could also include a proposal to do it. You should always include a handy fax form or email template for the client to send to you for future information searches.