March 10, 2021

4 Signs Your Business Model Is In Desperate Need Of An Update

“The Default Business Model” STEVE WASTERVAL As nice as it would be to have a…

As nice as it would be to have a single business model work for all eternity, any entrepreneur worth their salt knows this is rarely — if ever — the case.

After all, unless you are living as a hermit in some remote wilderness, you’ll see that the world is constantly changing. Businesses don’t exist in a vacuum. They are directly impacted by the many changes going on around them.

Quite often, this means that you’ll need to change your business model — even some of the foundational aspects of your business. As scary as this can be, it isn’t a bad thing. Quite often, it’s a necessity for your company to survive and thrive.

1. Your Competition Is Stronger Than Ever

When you’re doing well, it seems that your rivals are stuck in catch-up mode. But that doesn’t mean you should stop paying attention to them.

If your competitors seem like they are changing course or starting to do things differently, you’d be wise to take a closer look into why they are changing — especially if it’s helping them become more profitable. If their changes are causing them to lure away even your most loyal customers, they’re clearly doing something better than you, and you have to respond.

Of course, competitor pivots may not always mean that you have to change, too. Sometimes they’ll make changes in an effort to catch up to your leading status in your industry.

But their changes could highlight new trends or opportunities that you haven’t noticed yet. Whatever the case, make sure you don’t ignore your rivals so you can maintain a real competitive edge.

2. The Needs Of Your Customers Have Changed

It’s only natural that over time, the needs and wants of your customers are bound to change. Just think of those chunky video cameras that just about every parent used in the 90s.

Now that our smartphones have far superior filming capabilities, the sight of one of those old- school cameras would make you think you’d stepped into a time warp. Because customer needs and wants are so liable to change, chances are, the products or services you offer will need to change, too.

This became especially apparent during a recent conversation with Raymond Cornish, CEO of Whiteside Capital. While Cornish started his company as a FinTech firm that connects companies and alternative financiers, he made a dramatic pivot to tech-driven auctions for luxury items after recognizing potential for disruption in this industry.

He explained, “While you can often keep the core focus or idea of your business model the same, you have to be willing to adapt it based on what your customers want. They’re the ones who ultimately have the final say as to whether your business survives or dies. If you stay stagnant, you’ll lose their interest — and their business. Sometimes, you’ll need to pivot to a related offering to stay relevant.”

By keeping an eye on industry trends and even following influencers in your niche, you can get an idea of how customer expectations are changing so you can adjust faster.

3. New Products Or Services? Yeah, You’ve Got ’Em

Sometimes, your own interests and desires result in the development of a new product or service that you’re ready to offer your customers. Needless to say, if you have something new to sell, it should jumpstart a change in how you conduct your business.

Even if you’re still in the planning phases, you should consider how introducing a new product or service will alter your business model. At a minimum, you’ll need to reevaluate the way you manage talents, resources and profitability.

After all, if you want that new service to become the central focus of your business, you’re naturally going to have less time and resources to devote to your current offerings. You’ll have to consider how to implement these changes so that you don’t alienate current customers and continue to maintain a strong ROI.

The great news is that while successfully launching a new service or product is a lot of work, it can also be one of the best ways to inject life into a struggling business. If you’ve been mulling a change, consider your core competencies and the wider audience need so you can provide a quality service that your customers are actively looking for.

4. The Money’s Just Not There Anymore…

This last point should be obvious, shouldn’t it?

If not, it should be. Successful business models should see their profits increase year over year. If your revenue has become stagnant or is on the decline, it’s time to make some serious course corrections.

Doing the same thing over and over again while expecting different results is the very definition of insanity. If profits are falling and you don’t make any changes, you’re simply giving in to the inevitability of going out of business.

If customers are leaving you behind and the money isn’t coming in, you have to make some major changes. Now. Otherwise, there’s a good chance you’ll be out of business by the time my next article comes out.

The Times, They Are A Changin’

Like it or not, your business can’t exist in a little time capsule bubble that isn’t affected by changes in the world. You have to learn to adapt to the times, and that means that occasionally, you’ll need to give your business model a serious overhaul.

If you need some guidance in revisiting your business model, brand, and tackling those big hairy questions, download and answer this abbreviated version of the Brandshrink: my personal client-onboarding interview and very own Lead Product.

The faster you can make this change, the better. Because the longer you take to implement needed changes, the farther ahead your competition will get.

The clock is ticking — get moving!