On our last video I shared about the three key components of a start up entrepreneur mindset. In this video, I am going to talk about another three key elements of a successful business model or a revenue model. Can you build a sustainable business out from your business idea? So they are another three key components in this business model? Number one, your product stickiness. It does not really matter what product or services that you are providing.
But you have to ask yourself this million dollar question how sticky is your product towards your customer? how frequent your customer will need your product. For example, smartphone is a very sticky product. We all can live without our phone these days. Coffee is also another sticky product for many people. Right?
There are many people out there who need to drink coffee on a regular daily basis. But not all our products are sticky. Some are much stickier than one another. But if you are starting a new business, make sure that your product have enough stickiness, a power having a sticky product you also need to have a recurring revenue in your business model. Is your business able to drive a recurring revenue or it just only a one time deal? have high frequency of recurring revenue is very important for a sustainable business model.
The more frequent a customer come back and buy from you. You will definitely help us stable down your business and eventually grow. Therefore, you might want to find out how far Frequent does your royal customer comeback? And how much is the average spending? What can you do better to improve the repeat transaction and every spending of your royal customer. The third important component here is business scalability.
How easy for your business to scale up. In order to grow and double up your business. Does it involve a lot of initial investment? does it bring you a lot of high risks. For example, the comparison between an traditional retail business and an e commerce business in order for traditional business to scale up and handling 1 million transaction sales in the retail business is much more expensive and complicated, because you may require to look for a new outlet To rent the place randomly the place having stock or the goods inside so it requires a much higher capital to start a new retail business for you to scale out as compared to an e commerce business or unique properly just to invest another two more silver than the 1 million more transaction could be done easily. So there you have it.
These are the three key important revenue model if you are designing your business model number one, the product stickiness, recurring revenue and business skill ability. So at the end of the video, I share with you one page does not matter between the mindset and model each of the three key components of the each. These are the important thing so hope you enjoyed the video and learned something valuable. Thank you