Your current business model is the way your business earns money. A change in your business model can bring substantially more income – sometimes for less work and lower overhead costs.
Technologies and markets change at an ever-increasing rate, opening new growth opportunities that may just require a shift in your thinking. Many business owners have had to make quick adjustments to the way they operate this year. For some of them, this has opened up new ways to reach customers that they hadn’t considered before.
Think about the current way your business makes money. Some examples include:
A change in your business can be relatively minor or could mean a radical change in direction. Let’s elaborate on the above examples:
These examples all involve changes to an existing business model to produce more revenue and grow.
Look for a new business model to complement your existing business and see where it takes you. Some business models are outlined below.
Separating each activity in your business into a profit area can show you which activities are profitable, and which are marginal. The payoff can be new insights into your activities that help you focus on necessary changes or innovations.
For example, if you manufacture nuts and bolts, you may identify some unused capacity. How can you change your business model to grow? You could:
Try to identify any unused space or capacity in your business that could generate income.
Instead of waiting for customers to come to you, can you take your business to them? For example:
Can you identify a way to take your business to the market?
If you provide services, can you introduce fixed-rate service agreements rather than charging fees by the hour?
The fixed-rate business model aims for predictable cash flow in advance. Customers paying by direct debit (you pull payments from their bank accounts automatically through your bank) eliminate invoicing costs and debt collection issues. Some examples include:
It’s also possible to oversubscribe your services. For instance:
Try to identify possibilities for charging fixed monthly service levels.
Can you earn additional revenue by taking your whole business online rather than just treating a website as another distribution channel? For example:
Can you move more of your business online?
The Internet has greatly expanded this model because its reach is so wide. Businesses now give away significant samples intending that a small percentage of customers will buy additional products. For example:
Think about how you can apply this model to your business. Your ‘give away’ could be some valuable information offered online through various websites which attract interest and leads to sales opportunities.
If you want some guidance on future plans for your business, we are here to help.
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