Friday, November 25, 2016
"A Business Model Is Essential For Success In The New Year"
In the five remaining weeks of 2016, there are many things to get done - finishing this year's projects. attending to those as yet unmet goals, and planning for the new year.
We should already have a business model, but many do not. Even when there is no formal written business plan, there needs to be a business model. Like any other type of model, it represents what we do on a smaller scale and is shared with people so they can appreciate what we do.
A business plan can contain many different elements, and no two plans need to look alike in their general organization. Still, a common component in all plans needs to be the business model.
The business model is so vital that it can important and vital to our business success that we can think of it as an express business plan. It doesn't lay out how we are going to get something done, who we going to work with to get our projects completed successfully, how we are going to grow our business, or other important facets of business success.
What the business model does do is express the essence of of what we are about.
How many times have we met someone, and they tell us who they are or what they do with just their occupation or profession. Someone tells us that they sell real estate, or that they are an attorney, interior designer, occupational therapist, remodeler, builder, home stager, mortgage broker, or hundreds of other similar responses. Unfortunately, these answers tell us noting useful about the person we are meeting.
It's nice to know that someone is a designer or builder, but then we know many people who are as well. We have no way of separating or differentiating this person from the other people we know that have the same profession or occupation.
If someone came up to us at a business function and asked us who a good referral was for us or said that they would like to help us generate business, what would say? Too many people respond with a vague generality such as saying that they remodel homes for anyone looking to make a change. A similar response would be that they are an occupational therapist who helps people regain their normal function, or an interior designer who helps people looking for assistance in choosing new colors and furnishings for their home.
These responses don't help us identify the specific type of potential client to keep in mind for this person. The response - the business model - need to include more information about who we serve, the general price point or range, the scope of our services, and what precisely we do for people.
Then, someone will know how they can help us. Also, we can easily determine if a potential project aligns with our business model and accept or reject it based on this simply overlay.
Rather than say we do remodeling - essentially any size project, any price point, any type of client, any type of home, and in any location as long as it pays - we can be very specific. We can say that we do kitchen and bathroom remodels for homeowners who are retired or nearing that point in the southwest part of town who want to age-in-place and need some safety and convenience improvements to allow them to function more easily in their homes, and a typical job is in the $15-25,000 range and generally takes a week or so to complete.
It's not the precise words that make the business model work. It's that we have thought it through and can give a specific answer.