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Why SMEs Need A Business Model

A business model is a set of documented conceptualised structure by which business goals and objectives are achieved through the incorporation of laid down pipeline plans.  In simple terms, a business model is a structure describing the growth plans of a business, including its policies, and how it intends to fulfill its purpose. A business model should be peculiar to the organization. The ideals and values of the organisation should also be encompassed in the business model.


As a small and medium enterprise in the early growth stage, a business model should not be seen as an afterthought or a myth with which the “big brands” grow their businesses. In Nigeria, many SMEs suffer from stunted growth because of the lack of a business model. The goal is usually to make and maximise profit, but a business intended and keen on becoming a big brand to be renowned will put in its frontline a business model to propel growth. Below are 3 reasons why SMEs need a business model.



Usually, SME owners start their enterprises with the sole aim of making profit. But a successful enterprise is also measured by the growth it has experienced since its inception. Having a business model for obvious reasons carries your business from the point it is at inception to the growth destination envisioned for it. A business model is like a plan-to-action, a guide book on how the company intends to reach or achieve its sole purpose of establishment. The business model captures the “how” of the “why” an enterprise was established. With a model in place, your business follows a peculiar pattern or way of doing business, from the product/service design to the marketing messages and strategies, the way the entire organisation is run is based on the model. Having it documented and implemented makes running the organisation much easier, and makes predictions and projections clearer and intentional. This way, you are able to create, evaluate, monitor, and re-evaluate your model to suit your business growth. Hereby, creating structured growth.

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A very important part of any business is achieving its financial goals. Ideally, every enterprise will make a cash flow financial projection over the next 5-10 years in order to access proper information as regards the viability of the organisation. A business model allows for the sustainability of the financial goals. While a business plan gives detailed information about how a company is going to be run and the feasibility, the business model details strategies to how the company will achieve its goals one of which and importantly is the financial goals. In a business article on investopedia.com explaining the difference in the business models of two of the largest online e-commerce market, Amazon and Alibaba, it is clearly seen that there is a peculiarity of business models used in attaining financial goals by both companies, where amazon sells directly to buyers, Alibaba acts as a middleman linking buyers to sellers on affiliate websites with a safe and valid payment method (Alipay). The business models of both companies have not only ensured sustainability of financial goals, but it has been left as flexible as possible to accommodate changes as the company grows and new initiatives are introduced. A proper assessment of your organisation, its values and ideals, the product or service being rendered, and the target market should be carried out first before creating a model that works for the organisation.




The corporate goals of organisations differ. A successful business model should incorporate in it the corporate goals of the organisation. During my early days as a business consultant working with some really exciting brands, I was opportune to come up with a business model for a Nigerian Snack company who had a tagline of: Happy, Healthy Snacking. The idea was pretty simple, we knew the target market, we had the products, we knew what the corporate goals of the brand were, one of which was to become popular among the youths and middle age, all we needed was the right model that will pass the product across along with the corporate goals. So I came up with the idea to sell directly to the consumers through the consumers. The brand has representatives in each of the chosen categories of buyers and in their location. This not only helped sell the products to the right market, it also propelled word of mouth marketing with word quickly getting out and the message of happy, healthy snacking was sitting pretty with the consumers of the products.  This business model employed captured the most important corporate goal of the organisation and boosted its financial goal too.

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In order to create the perfect business model for your SME to act as catalyst for your business growth:

  • You must capture your mission and vision statement for the organisation,
  • The organisations’ value proposition has to be remarkable,
  • You must set realistic goals and objectives for the enterprise.
  • Take Cognisance of your product or service, the ideals, values, and the brand identity you’re trying to build with your enterprise.

Your SME needs a business model for growth that works.

By Sanni Oduntan O.



Sanni Oduntan Omobowale is a passionate, business growth enthusiast. He describes himself as a creatively-driven communicator, with a philosophy to always become value in whatever you do.

He has authored some fine, concise and effective books on “sales” for SMEs, also working as a business consultant for small and medium enterprises with experience in business development, idea validation, sales and marketing.  He specializes in coaching clients on maximizing business profits through the employment of effective marketing and brand positioning strategies.

He holds a degree in Estate Management from the prestigious Obafemi Awolowo University.

admin | Abbey Oyetunji
admin | Abbey Oyetunji
Abbey Oyetunji is a Business Growth Strategist. An IT Mogul & Web Developer. Reach via mail: [email protected]


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