10 Ways to Build a Better Business Model
We’ve all heard that change is inevitable, and it’s no different in business. Being able to navigate through changes is essential to building a lasting business. It starts by creating a successful business model to determine how you will deliver sustainable customer value and not just a plan to identify the right product or service.
Ever since the Covid-19 pandemic, people and businesses have experienced drastic changes in everyday activities. On top of that, the global economy has become volatile, sending prices high and scrambling supply chains.
Successful businesses have implemented standard business models that always give them a competitive advantage in the face of rapid changes. Many companies adjust their business models to meet the prevailing market demands and business environments. The following tips can help improve your business model to accommodate these changes.
10 Ways to Improve your Business Model
There is no question that having a strong business model is essential for any company, big or small. But what if you feel like your business model could use some improvement? Here are ten ways to help you get started.
1. Identify Your Audience
Targeting a broad audience is not advisable since your business must focus on customers who genuinely need your product or service. A robust business model will understand your target audience so you can design your product, messaging, and overall strategy to connect with that audience.[forminator_form id="101630"]
As you create your business model, ensure to narrow down your target audience to at least two detailed buyer personas. State the demographics, common problems each person faces, and your company’s solution.
Also, identifying your target audience will help you direct your marketing and increase the chances of a successful marketing campaign. You will also be able to reassess your current offering and develop future offerings that meet the interest of your audience.
2. Know How Your Audiences Use Social Media
These days, social media is an excellent way to reach a broad audience at a go. It will help if you research your target audience’s social media usage patterns to tailor your marketing campaign. This is where the demographic of your audience comes to play.
There are many options when it comes to social media platforms. But you don’t need to be active on all of them. For instance, it makes no sense to channel your marketing on Twitter if you know that your audience spends the most time on Instagram.
Instead, it would be best if you focused on the social media networks that your audience typically uses. Twitter can be great for a tech-oriented audience, while people who love DIY might prefer Pinterest and YouTube. Either way, social media allows you to run targeted ads based on various interests and demographics.
3. Identify Changes in Your Industry
For your business model to be successful, you need to not only understand market trends but also have a good understanding of the industry’s business environment. First, you should identify those elements beyond your control that can influence your industry. These include political, social, and economic changes.
Consider how current happenings impact your business model and what new ideas you can implement to remain on top of these changes. It would help if you also observed socio-economic changes affecting customer behavior.
Keeping up with these rapid changes also requires that you remain flexible through adapting to new technologies to gain a competitive advantage.
When the pandemic began, many small nonessential businesses were mandated to shut down. And though many of them failed, the few survivors did so by adapting and innovating. They moved their shops online and were able to generate revenue by advertising on social media.
4. Establish Business Processes
A well-defined and documented business process will help your company achieve its goals faster at lower costs. Implementing a defined business process helps to streamline and optimize an organization’s operations and is the basis for continuous improvement and efficiency.
Before your business takes off, you need to understand the activities required by your business model. Identifying your core business offering is one way to determine your key business activities. Will your business be providing a product or service or offer consulting?
Planning, developing, and implementing a valuable business process takes time and effort. Structuring the sequence of activities, tasks, actions, and steps to be performed by team members can be challenging.
You’ll need to identify tasks that most benefit your desired outcome to have an effective business process. Some steps that can help you develop a business process are:
- Review your current business process, if any.
- Define the goals of the business process.
- List activities and check for inefficiencies and areas to automate.
- Develop a process map.
- Assign process tasks and management.
- Test the process and implement it.
- Measure its business value.
- Get feedback for continuous improvement of the process.
5. Record Business Resources
Key resources are fundamental to describing the essential assets needed to make your business model work. Every business model needs vital resources documented. Your recorded resources will enable your business to offer a value proposition, maintain customer relationships, research markets, and earn revenue.
Consider what your company needs to execute daily processes, get new customers, and achieve business goals according to your business model. You also need to record your essential business resources to sufficiently prepare your business model to sustain your business needs.
These resources can be physical, intellectual, financial, or human and may include warehouses, capital, customer lists, intellectual property, and websites owned, leased, or acquired from key business partners.
6. Determine Key Business Partners[forminator_form id="101900"]
No business can work properly, let alone achieve its set goals, without contribution from key business partners. Most companies leverage other partners to drive success. As you create your business model, it is vital to identify key partners, such as suppliers, strategic partners, or advertising alliances.
For example, a wedding planner can build relationships with caterers, venues, tailors, and florists to improve their offerings. Manufacturers can partner with material suppliers and others in the business.
7. Build a Team of Consultants
Running a business can be demanding and require a lot of focus to keep up with customer and industry trends. A business consultant can help you simplify your processes and boost profit.
Working with an advisory or consultancy team ensures you remain focused on significant changes in the market and keep your competitive position, no matter what happens. An external expert can give you the insight to assess your market position and also identify problem areas and improvement opportunities.
They are also helpful in advising your team on adjusting to changes, especially regarding advertising or rebranding techniques. Your advisory team can consist of your close friends, partners, and peers if you prefer not to keep it formal.
8. Recruit Innovative Employees
Though your business model should ideally work in a changing environment, your business success is not guaranteed without the innovation and creativity of your employees. Suppose you want not only to remain afloat but gain a competitive advantage in the market during changing times.
In that case, hiring progressive and forward-thinking employees who share your brand’s vision and values is essential—creating a work environment that allows employees to excel means encouraging a positive mindset towards new ideas and innovation.
A flexible workplace that values creativity will ensure that employees remain highly productive in every situation. Always make your employees feel valued and respect their ideas so they feel more connected to your organization and work for the best outcomes.
9. Create a Demand Generation Strategy
Before launching your business model, you’ll need a plan to build interest, generate leads, and close sales. Demand generation aims to create awareness and develop an interest in your product or service.
It’s able to attract potential customers, deliver the right content at the right time, and persuade them that your company is the solution to their problems. Without a strategy for demand generation, your business will likely grow slower than it should.
Consider how customers will find you. More so, what they should do once they notice your brand. The proper demand strategy can increase your brand awareness and reach, generate more genuine leads, and boost your pipeline.
10. Listen to Your Customers and Leave Room for Innovation
No matter how well you think your company is doing, the real experts are the people consuming and interacting with your product or service. You should pay attention to their experiences and feedback because paying customers should be the motivation for meaningful changes in your business model.
Always ask your customers what they hope to benefit from your service and what they expect in the future. Going along with market changes means considering your customers’ needs in every business decision.
When you’re developing your business model, there can be many assumptions. Only when you start getting customers can you be sure your business model meets their needs. This is why you have to leave space for innovations in the future.
Adaptability and innovation can go a long way to make or break your business. Implementing a good business model with better processes and hiring the right employees while getting client feedback can help you focus and proceed with your business model.
A business model is meant to outline the activities of an organization to create lasting value for its clients. A successful business model equips a company with a more decisive direction for its operations and financial future.
The world is evolving and will always present fresh challenges for businesses, so you should be prepared for success in any situation. It’s a huge mistake to think your initial business plan is a fixed document. Review it frequently and implement any required changes for success.