Most of us take care of things that are important to us on a regular basis – maintaining our car, going to the dentist for a checkup, updating software on our computer and getting our air conditioner serviced before summer. But do we take a step back and invest the energy to look at our business model to see if everything is working the way we’d like it to?
When you take time to review your business model, you may be surprised by the value you discover by making some tweaks – or perhaps even reinventing what you’re doing and how you’re doing it.
Effective business models are built on:
1) your customer value proposition, 2) profitability, 3) resources, and 4) processes.
As you review your business model, here are seven actions we’d recommend:
In 3 minutes or less, can you write down your business model clearly and succinctly so that you can communicate it to your employees and coworkers? It might be interesting to ask your team to do the same thing, and then compare notes.
Are you really listening to your customer value proposition from the customer's point of view? Nothing beats direct feedback from your customers through surveys, conversations, and customer reviews.
Are both you and your customer profiting from the products and services you offer? Sometimes businesses can lose track of the factors that drive their profitability, and profits can erode over time. If you have B2B customers, chances are your products are an expense to them that affects their profitability. You don't want to find out that you're an expense cut after they've found another solution. If you have B2C customers, do they consider the money they give you to be a good investment in improving their lives?
Are the resources -- usually people and money -- available to you appropriate for your business model today? You may find that you need to upgrade or add to your talent. You might also find that you could benefit from additional capital to take your business to the next level.
Have you defined and measured your business processes to ensure you are producing the results you desire? Even successful businesses can find ways to reduce expenses, improve work performance, and deliver better results.
Are all elements of your business model working together effectively to produce the business you want? If your customer value proposition is off, your profit is off, your processes are ineffective, or you're operating with the wrong team or a bad teamwork, your entire business model is suffering.
Can you conduct an effective business model review on your own, or would you benefit from an outside perspective? You can tap into some good "do it yourself" tools, such as Harvard Business Review's "Reinventing Your Business Model," (available for purchase) and Business Model Canvas. But sometimes, it's really helpful to pull in someone to give you an outside perspective.
If you haven't reviewed your business model recently, do it now! The resources above are excellent, and you can get a reasonable grounding in business models from the Harvard Business Review article. However, with more than 100 years of combined business experience, the Trajectify team is well-positioned to review your business model with you. Schedule an appointment with us now to get started.
Chuck Hall is a business coach with more than 30 years of management and leadership experience with entrepreneurial businesses, as well as leading firms including Prudential, General Electric and Nationwide Financial. Chuck believes that every business, regardless of size or circumstances, can improve results by developing more effective and efficient business practices.