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Trying to serve everyone
A broad target audience makes marketing, sales, and product decisions more difficult.
A good product or service does not automatically create a successful business. Dr. Yogesh Pawar presents a step-by-step guide to building a business model that creates value, earns sustainable revenue, and can grow without depending completely on the founder.
Dr. Yogesh Pawar
Founder, School of Inspirational Leadership
Every business begins with an idea.
An entrepreneur identifies a customer problem, develops a solution, and starts selling it. The initial response may be encouraging. Customers show interest, sales begin, and the entrepreneur becomes confident about the opportunity.
However, having a good product or service does not automatically create a successful business. The business must also answer several important questions — who is the right customer, what problem is being solved, why should customers choose us, how will we reach them, how will the business earn revenue, what will it cost, which people and capabilities are required, and can the business grow without depending completely on the founder.
The answers form the foundation of a business model.
In the SIL Masterclass, “How to Make the Best Business Model,” Dr. Yogesh Pawar presents a step-by-step guide for driven entrepreneurs who want to create change and grow their businesses. The session is positioned as practical guidance to help entrepreneurs identify gaps in their business plans and overcome them strategically.
A strong business model explains how an organisation creates value for customers, delivers that value consistently, and earns sustainable revenue in return.
Prefer watching?
View the SIL Masterclass on creating an effective business model, or continue reading for a practical step-by-step framework.
In this masterclass
A business model explains how a company operates and creates value. It connects the customer's needs with the organisation's products, services, people, processes, revenue, and cost structure.
01
Who is the customer?
02
What value does the business provide?
03
How does the business deliver that value?
04
How does the business earn money sustainably?
A business plan and a business model are related, but they are not exactly the same. A business model describes the fundamental logic of the business — how the organisation creates, delivers, and captures value. A business plan is a more detailed document covering objectives, market analysis, strategy, operations, financial projections, timelines, and execution plans.
The business model provides the foundation on which a complete business plan can be developed.
Many businesses do not struggle because their founders lack effort. They struggle because the underlying model is unclear or financially unsustainable.
For example:
The payoff
A strong business model helps entrepreneurs examine these connections before investing further resources. It also provides clarity to employees, investors, partners, lenders, and other stakeholders.
Business model process
A business cannot build a strong model without understanding whom it wants to serve. Many entrepreneurs describe their target audience too broadly — statements such as "our product is for everyone" do not provide sufficient direction for marketing, sales, product development, or customer service.
The organisation should create a clear ideal customer profile. Demographic information alone is not enough — the organisation must understand the problem the customer is trying to solve.
A good business model begins with a real customer problem, not simply an entrepreneur's assumption.
For a B2B company, consider:
For a B2C company, consider:
Business model process
A value proposition explains why a customer should choose your organisation instead of available alternatives. It is not simply a slogan — statements such as "we provide the best quality" are too general, since most competitors can make similar claims.
A stronger value proposition is specific — for example: "We help small manufacturing businesses reduce equipment downtime by providing preventive maintenance and emergency technical support through one annual service agreement." This explains the customer, problem, solution, and operating approach.
It should communicate:
Test it by asking customers:
Business model process
Once the customer and problem are clear, the organisation must decide what it will offer. The offering should solve the identified problem without creating unnecessary complexity — additional features increase cost, training requirements, and operational complexity.
Businesses can consider offering different tiers — a Basic option for essential functionality, a Standard option covering the most common requirements, and a Premium option offering greater customisation, support, speed, or expertise. This lets customers choose based on need and budget while helping the business increase average transaction value.
Start with the core outcome — ask:
Everything covered in this guide comes from the SIL Masterclass session. Watch it in full, or continue reading below.
Business model process
A revenue model explains how the business will earn money from the value it creates. The correct approach depends on the nature of the product, customer relationship, and market. A business may use more than one revenue model, but each should be simple enough for customers and employees to understand.
For example, a large project may create significant turnover but require heavy upfront investment and delayed payments. A smaller recurring contract may generate lower immediate revenue but offer predictable cash flow and stronger retention — the quality of revenue is as important as the quantity.
Common revenue models include:
Evaluate revenue quality by:
Business model process
Pricing is one of the most important parts of a business model. If the price is too high, the customer may not see sufficient value. If it is too low, the business may generate sales but struggle to cover costs, invest in quality, or build long-term capability.
Customers do not purchase based only on your cost — they also consider the value of the result. A solution that helps prevent a major financial loss may have a higher perceived value than its delivery cost, which lets a business communicate value rather than competing only through discounts.
Base pricing on:
Understand willingness to pay — ask:
Business model process
Even a strong offering will not create growth if the right customers do not know about it. The business model should identify the most suitable channels for customer awareness, acquisition, sales, and service — the right channel depends on where the customer searches for information and how the purchase decision is made.
Do not evaluate a channel based only on the number of enquiries — track its full performance to invest in channels that generate meaningful business rather than only visibility.
Possible channels include:
Track channel performance by:
Business model process
A business model should explain what happens before, during, and after a customer makes a purchase. Customer experience should not depend entirely on the personal involvement of the founder — as the business grows, employees and systems should be capable of delivering a consistent experience.
A strong customer relationship increases retention, referrals, and repeat business.
The relationship may include:
Build trust through:
Business model process
A business model cannot succeed without the required people, skills, processes, technology, and resources. A business may have a strong market opportunity but still fail if the organisation lacks the capability to deliver consistently.
Capabilities may include:
Identify gaps — ask:
Business model process
The entrepreneur cannot perform every activity personally. A scalable business model requires capable employees, reliable partners, and clear accountability. Partnerships should be evaluated based on capability, reliability, commercial terms, service standards, and long-term alignment.
The organisation should decide:
Potential partners may include:
Business model process
Turnover alone does not determine whether a business will succeed. The organisation must understand what it costs to acquire customers, create the product, deliver the service, support employees, and operate the business. A high-revenue customer may not always be a high-profit customer.
Fixed costs (stay similar regardless of volume):
Variable costs (change with activity):
Business model process
A useful business model should be supported by measurable numbers. The objective is not to create a complicated dashboard — select a limited number of indicators that show whether the model is working. This helps entrepreneurs avoid pursuing growth that increases workload without improving financial performance.
Monitor:
Check the economics of each sale:
Business model process
A business model should be tested before significant expansion. Entrepreneurs sometimes invest heavily in infrastructure, recruitment, technology, or marketing before confirming whether customers are willing to pay for the solution.
Start with a controlled customer group, location, product line, or service package. Collect feedback and improve the model before expanding. Testing does not eliminate all business risk, but it can prevent the organisation from scaling assumptions that have not been validated.
Test areas may include:
Business model process
A successful model should be able to support growth without creating uncontrolled complexity. Scalability does not mean growing as quickly as possible — it means building the people, processes, technology, and financial capacity needed to manage growth responsibly.
Ask:
Business model process
A business model should not remain unchanged forever. Customer expectations, technology, competition, costs, regulations, and market conditions continue to evolve. A model that worked during the company's early stage may not remain suitable when the organisation becomes larger.
The entrepreneur must be willing to improve the model before external pressure forces an urgent change.
Periodically review:
Use the following framework to document your business model.
Customer
Who is the ideal customer?
Problem
What important problem does the customer face?
Value proposition
What meaningful result does the business create?
Offering
What product or service will deliver the result?
Channels
How will the business reach and acquire customers?
Customer relationship
How will customers be onboarded, supported, and retained?
Revenue
How will the business earn money?
Pricing
How will the offering be priced?
Capabilities
What people, skills, technology, and processes are required?
Partnerships
Which external partners are essential?
Costs
What will it cost to operate and deliver the solution?
Measurements
Which numbers will show whether the model is working?
Risks
What may prevent the model from succeeding?
Growth
How can the model be scaled sustainably?
A broad target audience makes marketing, sales, and product decisions more difficult.
Customer feedback should be gathered before making large investments.
A low price is difficult to sustain if the business does not have a strong cost advantage.
Higher sales do not always improve profit or cash flow.
High customer concentration can create significant financial risk.
A business that continuously replaces lost customers may struggle to grow efficiently.
The business becomes difficult to scale when all relationships and decisions remain with one person.
A broad portfolio can increase operational complexity and weaken focus.
Decisions based only on assumptions may hide financial and operational problems.
Growing sales without strengthening delivery capability can damage the customer experience.
Entrepreneurs with an established business can use the following questions across each area to identify where the model requires improvement.
Customer
Value proposition
Revenue
Profitability
Delivery
Organisation
Growth
MSME entrepreneurs often begin with strong technical knowledge, customer relationships, or industry experience. However, the business may grow informally without a clearly documented model.
Documenting the business model gives the leadership team a shared understanding of how the organisation should work. It also helps managers make better decisions because they understand the customer, value proposition, commercial priorities, and operating model.
Over time, informal growth can create:
A successful business model is not simply a document prepared for investors or lenders. It is a practical explanation of how the organisation creates value, serves customers, generates revenue, manages costs, and builds the capability required for growth.
Before expanding your business, ensure that you can clearly answer:
The SIL Masterclass presents business model development as a step-by-step process for driven entrepreneurs who want to bring meaningful change and grow their businesses strategically.
A business model should not be created once and forgotten. It should be tested, measured, reviewed, and improved as the business and market evolve.
The strongest business models remain clear in their purpose, disciplined in their execution, and flexible enough to respond to change.
Masterclass
A strong business model creates the foundation for revenue growth. Learn how to double business turnover by improving customer acquisition, sales conversion, transaction value, retention, and organisational capacity.
Masterclass
A scalable business model should not depend on the founder for every decision. Effective delegation helps distribute responsibilities and develop capable managers.
Masterclass
Improving an existing business model may require changes in roles, processes, technology, and employee behaviour. Explore this guide for a structured implementation approach.
A business model explains how an organisation creates value for customers, delivers that value, and generates sustainable revenue in return.
The main components include customer segments, customer problems, value proposition, products or services, sales channels, customer relationships, revenue streams, resources, capabilities, partnerships, and costs.
An entrepreneur can create a business model by identifying the ideal customer, understanding the customer's problem, defining a clear value proposition, selecting a revenue model, calculating costs, and testing the assumptions with real customers.
A successful business model solves a meaningful customer problem, communicates a clear value proposition, generates profitable revenue, delivers a consistent customer experience, and can grow sustainably.
A business model explains how the organisation creates, delivers, and captures value. A business plan is a more detailed document covering strategy, market analysis, operations, finances, objectives, and execution.
An MSME can test its business model with a limited group of customers, a specific location, or a smaller service offering. It should measure demand, pricing acceptance, sales conversion, delivery capability, customer satisfaction, and profitability.
A business model should be reviewed periodically and whenever there is a major change in customer expectations, technology, competition, costs, regulations, or the organisation's growth stage.
A scalable business model uses clear processes, capable employees, suitable technology, healthy financial margins, and distributed decision-making to support growth without creating uncontrolled complexity.
SIL works with entrepreneurs and growing organisations to identify business gaps, strengthen their operating models, and create structured plans for sustainable growth.