How to Grow Your Business by The Accountant LLC - HTML preview

Step 3: Update your business model

Your business model is how you receive income. You may find growth opportunities by changing the way you do business, especially if current demand shifts. For example, if you own an education company, one business model is running workshops and charging a fee for each workshop. A different business model is to place the training online and ask participants to subscribe to access content.

Examples of business models:

• Moving your business online
• Licensing your design or product to other manufacturers rather than manufacturing yourself
• Selling your intellectual property for royalties
• Allowing buyers to pay monthly through a subscription service
• Opening an offshore branch to get a foothold in an export market
• Acquiring competitors to expand your customer database
• Developing a strategic alliance to gain shared market advantages. Other ways of amending your business model include:
• Selling unused capacity
• Contract manufacturing for other businesses to fill your capacity, increase profitability, and offer leverage to get better buying prices
• Producing your goods under different brands (for instance, a premium brand and a ‘house brand’) and letting other distributors sell them to the market
• Hiring out your facilities to others
• Offering prepaid services.

If you provide services, you could introduce fixed-rate service agreements rather than charging fees by the hour. The fixed-rate business model aims for predictable cash flow in advance.

Investigate franchising

One of the best and most effective ways to grow your business and see a major increase in profits is to turn your business into a franchise.

The main factor to identify is whether your business can be replicated. It’s also important that there’s a demand for what you’re selling – is it popular enough that it can be sold in different locations, by other business owners?

Businesses that successfully become franchises are those that have robust and efficient systems in place. If your business runs like a well-oiled machine with great systems and streamlined processes, including well-trained staff, then there’s a good chance it could become a franchise.

Offer new distribution channels

A distribution channel is simply the way that you get things to your customers. Is there another channel or way of selling to your market that would open up growth opportunities?

There are many ways that any business can reach their potential customers. For example, if you manufacture tables, you could sell:

• Direct to the public by opening a showroom
• From a company website direct to the public
• Wholesale to retailers
• At home shows and trade fairs
• Through a sales agent or distributor who sells your tables to retailers for you
• From online trade portals
• Through a strategic alliance with a similar business that operates in a different market.

Make sure any new business model is substantial in that it creates more revenue than your older way of doing business, and sustainable in that the revenue it creates is long-term.

Research the competition for business model ideas

Spend time on researching the competition (the internet and trade directories are a good place to start).

While keeping up-to-date on your direct competition is always good business practice, try digging deeper into their affairs to see what they’re up to next.

Subscribe to their newsletter, read their promotional literature and even become a customer. Go online to read their annual reports, monitor key moves in human resources and pay attention to strategic alliances. That information could give you clues as to what you should consider for your business.