What is a Business Model?
A business model is a company’s plan for achieving its goals and ensuring profitability. Simply put, it is a road map of how a company intends to make money.
Even if you wake up one morning and decide to run a business with the first idea that pops into your head, you still have to sit and carefully map out how to make money. The choice of a business model to adopt is not a casual one as it considers the business goals, capital, industry, consumer behaviour, locality, target audience, and product and services.
Why a New Model?
Since the factors that influence a business model are not static, it follows that there will be a need to change or adjust a business model with time.
When one or more factors change, it becomes pressing to adjust the business model or change it entirely to accommodate these changes. Of course, the company must keep making money.
Considering a new business model is saying the way we make money is no longer sustainable or will become obsolete with time due to changing consumer behaviour, innovation or other factors. And because of that, we want to look at a new way to make money.
Sometimes this new way to make money can completely alter operations and even the entire face of the brand. So it’s not a decision taken on the whim of the moment. However, it is a decision every business will make at some point.
What should guide your new model?
If you are not at that point yet, you will get there soon enough. And here are nine things to consider before taking the business-altering decision of a new model.
- Available data on the proposed model
- Sustainability
- Target customers
- New markets
- Policies and regulations
- Industry trends
- Political climate
- Innovations
- Market implications
In conclusion...
Despite being in the industry, the climes are different for each business. Your every decision should be based on your observation of what your business needs. And always remember to keep your customers at the heart of all your business decisions, which, of course, includes adopting a new business model.
