When you have clarity on your business model and know how your business creates value for your customers it becomes easier to make more money.
Action: Set aside some thinking time and answer these questions. Based on your answers you may decide to invest some time in updating or refining your business model.
- What problem does my business solve?
- How does my business add value?
- Are we communicating the value we create clearly?
- Is my current model working?
I helped a business owner literally turn his business around from losing money to making money by getting clear on his business model. He specialised in developing systems for animal management, in other words helping farmer’s better control their livestock.
His challenge was that he believed he was in business of selling the hardware, he would spend time designing the systems and then he would try and sell the hardware for the system he had designed, the problem was that he was often competing directly with the companies that manufactured and supplied the hardware who could always beat him on price.
As soon as he realised that the value he created was the designing of the system and the management and analysis of the data, he changed his revenue model to that of a consultant not a retailer and that made all the difference.