Learning Experience

When you decide to build a business you should begin with a plan. Part of that plan includes building a business model. This model outlines how you will serve your customers, how you will be paid, and the flow of the business. The business model should be based on providing the best value for your customers. If your goal is not based on providing the best value then your business will fail. Take a look at the American car manufacturers today; their business model was not based on providing the best value to the customer. Part of their business model grew to include financing. Through this financing arm they were able to supply subprime lending for autos. Their focus went from building the best product they could to increasing short term profits (notice I said short term). A second business model they spread their focus to was leasing. Auto companies make a lot of money from leasing. With all of the leases there was a glut of used cars put on the market which eventually reduced the need to lease because of the availablity of quality used (inexpensive) cars. This business model was not sustainable and the auto manufactures did not grow to prepare for this eventual change. I do realize that the economy has affected the number of cars that are now purchased but a business should be sustainable through good and bad times, if not it is a flawed business model. Making money is important in business but it should not be the end goal, it should be the symptom of the good practices.
By reviewing the many businesses that are failing in today’s economy we can identify what caused these businesses to fail and develop our business models to account for these problems. We are living through a case study. Also, look at the businesses that are doing well, what have they done that is allowing them to thrive. If you read and stay aware you will learn why we are having these problems in this economy and make decisions to better develop your future business.
Finally,you can also learn a lot about how this economy works and how the government and peoples’ feelings can affect the economy.