Your business model might have been great in the past, but outdated today?
We all need a Business Model that works well all day, every day?
The Business Model must capitalise on the unique value of your business, opportunity or project provides? Does your model deliver worthwhile outcomes for prospective customers? Will it form lasting relationships and create advocates?
Does it show how you will make the money you want? How will your model take advantage of the new information technologies and communications available? The model should also differentiate your business in the marketplace. Even with social functions and events, you need to create an appropriate Business Model in order to create better outcomes.
Today your Business Model needs to differentiate your business because it needs to be both creative and innovative. While providing unlimited holidays for employees might not be part of its differentiation. It is one extreme example of applying creativity to the Business Model.
More than ever before stakeholders are placing greater importance on social causes and a sense of purpose. The model should also be reflecting the aspects of globalisation that affect it, in addition to the technology that drives it.
The business model as a work of art
In The New, New Thing, Michael Lewis refers to the phrase business model as “a term of art.” And like art itself, it’s one of those things many people feel they can recognise when they see it (especially a particularly clever or terrible one) but can’t quite define.
That’s less surprising than it seems because how people define the term really depends on how they’re using it. Michael Lewis, for example, offers up the simplest of definition, “All it really meant was how you planned to make money”.
“Business Model” was one of the great buzzwords of the Internet boom. It was routinely invoked, as the writer Michael Lewis put it, “to glorify all manner of half-baked plans.” A company didn’t need a strategy, or a special competence, or even any customers. A Web-based business model was all it needed while promising wild profits in some distant, ill-defined future.
“You know your business model is broken when you’re suing your customers”. Paul Graham
Many people, investors, entrepreneurs, and executives alike, bought the fantasy and got burned. And as the inevitable action played out, the concept of the business model fell out of fashion nearly as quickly as the .com appendage itself.
That was a shame. For while, it’s true that a lot of capital was raised to fund flawed business models. The fault lies not with the concept of the business model, but with its distortion and misuse. A good business model remains essential to every successful organisation and its speed of operation can impact your vision and objectives.
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Irrespective of whether you are a startup or well-established enterprise and irrespective of the type of business or organisation a business model that works well all day, every day is critical.
Before you can apply the concept a simple working definition is needed because it clears up the fuzziness associated with the term. Keep your business model simple in the first instance you can start to add the bells and whistles as it starts to work and you want to improve performance.