What’s the ideal business model for my business? I have been asked this question hundreds of times by business owners over the years.
The answer to this lies entirely within your objectives incorporating the short, medium and long term. It will usually involve a strategic review of your business and alignment across all directors and/or stakeholders. You will need to consider and blend business, family, health and financial objectives & issues – it’s important to get the balance right in order to enhance your success.
Top 10 considerations before choosing your business model.
- Why did you start the business, or why are you still in it? Be clear about your big WHY and your vision.
- What is you competitive advantage – your clear point of difference? Clarify how you are different.
- What are the major challenges or issues for the business right now? Brainstorm what they may be as you grow and become even more successful including what you want to achieve and by when.
- What is you exit plan or succession? Explore how you may exit – to whom, for how much, terms and conditions and when?
- Who is your ideal client and how do they benefit for your products and/or services?
- What is you value proposition as it impacts the board, your clients and your team? Where does the real value lie for each? Design and maximise the value for all so that you insulate the business, maximise your gross profit margin, mitigate price pressure and commoditisation, win and retain market share plus attract and retain the top talent.
- What will success look like? What are your critical success factors – i.e. the factors that you need to achieve in order to succeed – business, team and clients develop and document the top 5 for each.
- What is the real value that all stakeholders obtain by engaging with you?
- How will this secure your financial future? – Review the structure required for your business to operate efficiently and effectively consistent with your objectives.
- How easy will the business be to sell and to whom? Consider the intellectual capital, brand equity and “your secret sauce”.
When you strategically review the above and brainstorm the various options – you can document a Business Plan supported by a series of one page Action Plans for each quarter which you will measure and manage – holding all parties accountable.
This will provide the platform for the business to operate and succeed plus mitigate your risk whilst developing a contingency plan for unexpected events – both internal and external… And that will provide the flexibility you require as you develop. This will consider growth, protecting the assets of the stakeholders, minimising income tax and reduction of any capital gains tax and will provide options on any exit (voluntary and involuntary).
When you have considered, agreed and documented the above items you can choose the right business model and rollout plan with confidence. If you require further detail please contact your MSI specialist advisor who will be delighted to assist.