What Does Your Business Model Look Like?
Let’s think about what a “failing business model” really means.
What’s the reason for business failure? A poor business model is when your business doesn’t have the following:
- A predictable way to bring in customers.
- The ability to fulfill its orders.
- A method to turn one-time customers into repeat customers.
Does this sound familiar? You are constantly looking for more customers, for example, a wedding photographer who is constantly hunting for more couples to work with.
How about a residential roofer who re-roofs a house and then has to wait for the next hail storm to be in demand again and book any work? It is another business model that relies heavily on customer acquisition.
Sure you can make TONS of money in these two industries, but you have to have a predictable advertising system to reach new customers time and time again. Small businesses are tricky beasts.
You don’t want to be in a one-off business that doesn’t have recurring revenue. If you are coming up with ways to turn what you do into ongoing packages, or have sales cycles built into them, that will help your business sustainability. Small business failure is incredibly common, so you need to be thoughtful and extensive in your marketing approaches.
Think about your local grocery store. The goal is to get you in there once a week, if not more, and get you to buy the same things over and over because that helps grow their profits on a repeatable basis.
I’m sure you “just came in for milk,” but guess what? The milk is located at the very back of the store so that you have to walk past all of the other delicious and practical options before you get there. That’s not a coincidence, it’s a strategy.
There are some small business models that are easier to manage than others, and it all depends on your personality as a leader, your natural tendencies, and the team you have around you. Just because you have a current business model in place doesn’t mean you can’t change it. So consider how your business operates and adjust it to succeed long term.