If you’re a business owner, you’ve probably encountered a situation where you’ve had to adapt your business model to fit a changing market.
A good business model change example would be Facebook. In the beginning, Facebook’s core audience consisted of college students. However, their potential consumer base was limited. By changing its business model and opening its services to everyone, Facebook has become a formidable force in the social media world.
The truth is that every business is susceptible to changes due to outside influence or the simple passage of time, and it’s important to anticipate these changes early on. If you’re prepared to pivot and make business model changes when needed, you’ll have an easier time establishing the longevity of your business.
Reasons for Business Model Changes
There are several reasons you might need to change your business model over the years. Here are some of the most frequently seen causes of business model changes:
- Your current business model is unclear to your target audience. If customers don’t understand your product or service, they are unlikely to buy into it.
- The current market was not well researched, and it isn’t large enough to support your business (as was the case with Facebook.)
- Your product doesn’t provide enough value and must be rethought.
- You are looking for prospective clients in the wrong places.
- There isn’t enough of a profit margin to be sustainable.
- The business requires too many resources to continue functioning as it is.
- Your idea was either too early or too late to take advantage of the market.
- The market aged or changed too quickly for you to react.
- Competitive technology crushed your niche.
- The business can’t be scaled appropriately.
Adapting to Business Model Reinvention
Fortunately, realizing you need to change your business model doesn’t have to be the death knell of your business. With a few strategic business model changes, you can turn things around and come out on top. Here are a few ways to adapt before your business model becomes obsolete:
- Observe technology evolution. Stay on top of new trends and be thinking about how your business can change with the times.
- Keep an eye on your competitors for ideas and angles.
- Create an office culture that fosters positive business model changes. Encourage innovators in your company to think ahead. Their ideas can provide you with much-needed perspective.
- Listen carefully to your front line employees. They have direct contact with your customers and have the best indication of what consumers value.
- Keep a cash reserve to fund the ongoing development and testing of new products and ideas.
- Experiment with new ways to reach your current customers. Try looking in places and methods you haven’t tried before.
- Attend industry conferences, read online forums, and keep up with news in your industry. Chances are other people are writing about the business model changes necessary in the digital age.
- Bring in an outside expert to help you (like a professional business coach, like me.) We’ve been there before, and we can help you pull through.
If your business model has changed, you need the advice of a seasoned professional coach to help you forge a new path. Fill out my contact form for a complimentary discussion of new ideas that you can implement tomorrow.
- Proven Characteristics of Wildly Successful Salespeople - November 19, 2020
- Creative Ways & Ideas to Increase Business Referrals - November 12, 2020
- The Top 10 Alarming Reasons Why Franchises Fail - November 5, 2020