Your business model is the underlying structure of how your business creates value. But what does this really mean? And why is understanding your business model important?
What is a business model?
Your business model is the underlying structure and organisation of your business activities. It defines in general:
Who your key stakeholders are
The value you provide to your stakeholders
The relationship you have with your stakeholders
The channels and resources you will use to deliver value to your stakeholders, and
how all of the above differ from your competitors.
Why is your business model important?
Your business model is important as it defines the parameters of what your business can, and does, do. Your business model influences your strategies.
For example, your business model ...
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It is essential to have clear strategies, but they won't be any use unless they do these six things
Your strategy must:
Define, in general, how your business is going to achieve its goals
Maximise the $ potential of your business
Articulate the main points of difference from your competitors
Unite and focus your team's efforts
Provide clear parameters for decision-making
Facilitate increased profitability, growth and longevity.
What is strategy?
Clarify your strategic plan to achieve your goals
Define what is core, unique and valuable about your business
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There is a lot of hoo-ha around 'strategy'. But is strategy really that complex to understand?
Simply put, 'strategy' is how, in general, you intend to achieve your goals.
As there are many ways you could achieve your goals, it is important to clarify how you specifically plan to achieve your goals. That is, what will your strategy be?
Defining your 'how' facilitates engagement, efficiency and differentiation from your competitors.
Strategy is HOW, in general, you intend to achieve your goals.
Strategy requires deciding what you will and won't do
"Business strategy is the creation of a unique and valuable position, involving a different set of activities." (Michael E. Porter)
In business, your strategy defines how you uniquely intend to achieve your goals which differentiates you from your competitors.
To have clear strategies ...
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Take the Test - how clear is your strategy?
It is essential to have a clear strategy that everyone in your business understands and can contribute to.
Take this simple test to see how clear your business strategies are:
A) Ask your staff these 4 questions:
What are the 4-6 things that make us different from our competitors?
As a business what key things do we really excel at?
What are our main current business priorities?
In your job what do you think are the most important things you need to achieve?
Would your strategies get an A+ for Clarity?
B) Review their answers.
How consistent are they? Can you see any themes running through the answers? Do the themes resonate with your core business strategies?
C) ...
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There is only one thing more important than strategy, but unfortunately it is often overlooked, or even forgotten. So what is more important than strategy?
The results your strategy is designed to deliver.
We have seen organisations become so focused on implementing their strategy that they forget about the original results their strategy was designed to deliver.
We call this being 'activity-based', rather than 'results-baseed'.
'Activity based' is where the focus is on planning and completing activities.
'Results-based' is where the focus is on achieving results and activities are assessed in the context of what impact they make on the results.
Results are what matter. Results are what your strategies are designed to deliver.
Avoid getting sidetracked by all the activity
It is easy to get side-tracked by activity. Activity is the ...
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