All successful ventures need a clear business model. However, the word ”model” makes the whole concept seem illusive, as if out there somewhere, just out of reach, is a boilerplate set of directions, easy-to-follow operating instructions for business success. Adding the word business to model causes instant anxiety; either you don’t have one or yours isn’t good enough. Now replace the word ”model” with story. Do you have a business story? There.
Now we can talk about it. Your business model is, at its core, your business story. It’s about how you make money: what you have to offer, the clients you serve, the way you deliver your services and the space you hold in the marketplace. A good business model, strike that, business story is essential to your success. If you’re working, you’re operating one already. To evaluate its effectiveness, ask yourself these questions.
What value do I provide?
Can you summarize your value proposition in ten words or less? To be effective, your answer must be simple and succinct. That’s easier said than done. To articulate your own value, you first have to be sure you understand your clients’ problems. Then you have to describe exactly how you’re able to meet their needs, how you deliver the right solutions and how much that service is worth. Next, you have to boil all those thoughts down to a single line. Your value proposition should be simple, dynamic and a clear expression of the tangible impact you have on your clients’ lives. It’s why a client should choose you.
Can I describe my ideal client?
Who do you work best with? Under what circumstances does your expertise shine? The more you align your clients’ needs with your skills, the better you perform. That’s why it’s so important to identify your market and be specific. Describe the group of clients you’re best equipped to serve and focus your energy on finding them (the baby boomers, small business owners, affluent families, executives, etc.). Don’t worry about missing the boomers if you’ve identified affluent families as your market. When you focus on a distinct segment with the intent to deliver quality results consistently, you can build a successful business more quickly than you ever could trying to be all things to all people.
Have I developed my people and processes?
Are your people aligned behind your firm’s vision? More importantly, have you articulated your vision in a way they can internalize? Have you established processes and systems that allow your people to consistently deliver top-notch results? Too often firms build their business around a lead advisor’s ability to engage clients without taking the time to standardize that proven process. Close your eyes. Imagine business without your lead advisor. How much would sales fall? Now imagine the other advisors in your firm working the same way as your lead. How fast would sales rise? They’d skyrocket and with a standardized system in place your support team could handle the increased volume. When you put time into developing your people and processes, it pays off.
Is my compensation in line with the value I’m providing?
You’re good at what you do. You’ve studied hard, trained with some of the best and spent many years mastering your business. You deserve to be paid, and well at that. Your business model should be one where you receive a fee not only for the solutions you provide, but also for the clarity and value you add. Consider going to a doctor. In ten minutes, he’s diagnosed an ear infection and prescribed an antibiotic. You don’t, however, simply pay for the prescription or even ten minutes of his time; you pay a sizeable fee for the knowledge, experience and skills it took him to clarify your problem. Likewise, for experienced advisors delivering the solution is easy. The clarity you provide is what’s most valuable. You’ll find fees are only an issue in the absence of value.
Do I know where I stand?
Do you have a clear sense of advantage? In other words, can you explain how you’re different than your competition? How is it that you do your job better than others in your area? Do you even know what those competitors are doing? Maybe you do. Maybe you don’t. Most likely, you’re not exactly sure what they’re up to. That’s why it’s smart to study the industry landscape. Your business story is incomplete if you don’t know what strategies competing firms are using, the kinds of clients they’re attracting, how they’re delivering and where they’re likely headed. Armed with this knowledge you can build your capabilities in a way that your competitors can’t touch.
Do I have a roadmap for the future?
The key to any successful business is to plan ahead. Look beyond your current business story and see where the plot is taking you. Is it where you want to go? If not, what do you have to do to change it? Well then, put it in writing. Take the time to get really clear about what it is you want to achieve. Make sure your goals are specific, measurable and attainable. Then write them down and create a timeline. Committing your goals to paper not only helps set the process in motion, it helps create a roadmap to your success. Remember to review your goals frequently. The more focused you are, the more likely you are to achieve them.
Hopefully your business story is a good one. You might be thinking it’s time to rewrite or start writing altogether. Whether you’re just getting started or have been in business for years, it’s important to go back to your story, look at your business model critically and check back regularly. Many firms assume once they’ve done it, growth naturally follows. That’s not the way it works. All businesses face stiff headwinds. Successful ones learn to adjust their sails, take a different tack and change course occasionally. If you write a good story, yours will be a model business.