Understanding business models, which plainly means how a business works in its end to end process, is very crucial to an entrepreneur who is planning to get into that particular business. In fact, the lack of knowledge on the business model (the know-how) is surely among the top reasons why entrepreneurial minds do not go into that business. Among the top reasons, together with capital, location and market demand.
I also face the same challenges since I lack the know-how in some of the businesses I want to pursue. The best way to deal with this is to immerse oneself, to familiarize oneself with the targeted business. The shallow level will be to ask around, read about it and research on it but this will only give you very topline general details. And people’s opinions. As they say, experience is still the best teacher.
As such, I agree that the best way is to experience the business, likely by working as an employee for that business for now, so that one is exposed to the end-to-end process, as well as the various real-life scenarios that need to be addressed. Make mistakes now, at the expense of your employer’s money (and hopefully not at the expense of your job.) After all, many of entrepreneurs right now started this way, as previous employees and workers who eventually decided to start on their own, once they have gained the mastery of the business model. The challenge though here is that what if you are a full-time employee that is interested in our another business model, and you lack the time and opportunity to experience that business model of interest.
And so, there are others who hit the ground running, who jump to the pool even before learning how to swim. These are the type who learn by doing, but doing not as an employee first, but as the actual businessman (while remaining a full-time employee still). This is the riskiest approach that one can make. That you start the business without even knowing the ins and outs of it, with hopes to learn and get better along the way. Learn the ropes along the way. A lot of bold people also do this this because they already want to get started without quitting their full-time jobs. Mostly those who can afford to risk capital but not time.
The complexity of the business model varies per business. Some very simple while some may have very many touch points which makes it much more complex. I hope that in the future posts, I get to share what I know about the various business models I have become familiar with.