A business model is a description of your products or services, how they are created or delivered to your customers, and how you will make money doing this. It also includes information on where the business operates, who are their competitors, what are their products & services, what are their operating costs, and where they are going. But what is the 5W1H business model and how is it useful for businesses? Keep reading to find out more.
What is the 5W1H Business Model?
The 5W1H business model, or the ‘Five W’s’, is a simple tool for developing any new business. Whether you are starting a bakery, tech company, or consulting firm, the 5W1H business model can be used to quickly assess whether your idea has potential. The model itself reflects six key words that will help discover ways of measuring the potential of a business idea.
Firstly, let’s get to grips with what these keywords are so we know exactly how to use them. The 5W1H business model stands for: What? Who? When? Where? Why? How?
The “what” is used for identifying exactly what it is that you are doing. The “when” is used for deciding when to provide your services or products. The “where” is used for determining where you will be able to sell your products or services. The “why” shows why you are undertaking the business venture and what’s in it for others. Finally of the 5 W’s is “who”, which illustrates who your potential customers are going to be. Additionally, “how” highlights exactly how you are going to implement your business idea.
How is the 5W1H Business Model Useful?
There are many uses for the 5W1H business model. This business model works effectively across many industries and projects, including human resources, journalism, communications, marketing, and project management! The 5 W’s method allows you to position your business appropriately for your audience with targeted questions, goals and plans. With this information, companies can better determine the direction of the products and services they create, therefore making it easier for them to come up with something that their target customers find valuable. This business model paves the way for companies to create products, services or experiences that customers really want.
A business should use the 5 W’s business model if they want to create something that their customers will pay for. Customers are not going to buy a product or service unless it is of benefit to them, so using this business model allows companies to pinpoint exactly what it is that their customers want and the price they’re willing to pay.
Example 5W1H Business Model Questions
The What
- What are the needs that my product or service will fulfill?
- What difficulties might we encounter?
- What is the purpose of our methodology?
The Who
- Who are the people I want to reach with this product or service?
- Who else is concerned with our product or service?
- Who are our competitors?
The When
- When does my target audience need these solutions, and when do they use them?
- When is my target audience visiting my site?
- When is the best time to send out our newsletter?
The Where
- Where will my target audience use these solutions?
- Where do potential risks lie?
- Where does our target audience work?
The Why
- Why does this problem exist in the first place, and why is it important to solve?
- Why do people prefer version A to version B?
- Why is our traffic dropping?
The How
- How do I make money doing this? How can I make money without charging for my product or service at all, like Google did with their advertising system?
- How does our target audience access and interact with our content?
- How do we build a successful lead funnel for our target audience?
How Can a Business Growth Consultant Help with Your Business Model?
A great business growth consultant can help create an effective business model by implementing the 5W1H strategy to an expert level. This involves conducting a 5W1H interview that covers key questions about each issue that needs to be covered in the business model, before collating that information for you. It is important to work with a business growth consultant who can provide guidance to you and your team at all levels of the company, from the CEO down to entry-level employees. A skilled consultant will be able to help you ask the right questions about every aspect of your business and create a business model that is customized to your needs, so why not try one today?