Re-thinking or refining your business model might feel like a step backwards, but in fact it’s a key part of the journey for any successful and sustainable business. You have to be agile if you’re going to stay ahead of the competition and see your business grow in the future, and that will require plenty of re-evaluation along the way. You will also find that you’re constantly learning from your experiences, and it pays to put these lessons into action as quickly and seamlessly as possible.
Is It Time To Refine?
There are certain warning signs that you might need to re-consider your business model and strategy, including:
1. Customers Out Of Reach – You just don’t seem to be reaching enough of your target audience or seeing the sales and revenue you were expecting.
2. Times Are Changing – A previously successful product, service or approach doesn’t seem to be working anymore because the industry and/or technology have moved on.
3. Nowhere To Go, No Way To Grow – Your target market is too limited or crowded for your business to grow and thrive.
Back To Basics
When it comes to facing any or all of these stumbling blocks, it’s time to go back to your core values. These are the values that define your business and will guide the decisions you make about how to adapt and move forwards. Your values might include things like innovation, reliability, compassion, efficiency or sustainability, and they tell people what your business stands for. They shape the culture of your organization and form the foundation of your business model.
Step 1: Re-visit Your Core Values
Start by reviewing your core values, adjusting them if necessary, and assessing whether your business currently reflects this ethos.
Step 2: Set Your Goals
Set well-defined and time-specific goals, in terms of revenue and growth, and then work backwards to think about how your business model is going to help you hit these targets.
Step 3: Refine Your Strategy
Once you know where you are now, and where you want to be in the future, refining your business model becomes a lot more strategic.
Identify and Act
So it’s not a case of throwing everything out and starting again. Now’s the time to look at what’s working (keep doing it!) and what’s not (change it!).
If you’re not reaching enough customers…
¾ Are you trying to solve the wrong problem? Go back and examine whether your product or service is meeting a real or pressing need for your customers.
¾ Are you struggling to connect with the right audience? Re-consider your marketing strategy and explore different channels and approaches in order to get your product or service in front of the most relevant market.
¾ Is your price point too high? If potential customers show an interest but, in the end, don’t want to pay what you’re charging you may need to think about ways to offer your product or service at a lower price, or target a more high-end market.
¾ Is your value proposition too vague or broad? Make sure that you’re offering something unique, that your messaging is clear and focused, and that potential customers can see the value.
If the industry is changing…
¾ Do you need to re-think your offering to meet a new need? Can you get a step ahead and anticipate opportunities or trends that may arise in the near future?
¾ Are there new marketing tools or approaches for reaching your target audience? Don’t get drowned out by the competition because you were too slow to adapt to emerging technologies or channels.
If there’s no scope to grow…
¾ Is your target market too limited? Think about how you could expand your reach and appeal to a wider audience, or multiple markets.
¾ Is the market over-crowded? Make sure that your offering is significantly different (and preferably better!) than the competition.
¾ Is your target market declining? Find out where these customers are going and what they’re spending their money on instead. Can you adapt to meet that need?
The bottom line is that you don’t have to settle on a perfect business model that’s going to see you through from start-up to retirement. In fact, that would be a really bad business move. Give yourself the freedom and flexibility to make changes as and when you need to, to learn from your experience, and to evolve with the times. This is the only way that your business will stay relevant, profitable and sustainable in the long-term.