Let’s talk about business model innovation for designers and other small businesses, what it means and why it is so important for the growth of your business.
- What is Business Model Innovation?
- Why do you need to think about innovative business models?
- How do you do it?
Business model innovation is the art of increasing value in a company, by making changes both to the company’s value proposition and to its underlying operating model.
What’s the goal of Business Model Innovation?
The primary goal of business model innovation is to design and build new revenue sources by improving products or services and how they are delivered to customers and clients. Many small (or larger) companies are adding innovative revenue models that are fully or partly digitalized, to improve organizational efficiency, increase return on investment, and attract more people to their ecosystems.
Why do you need to think about it?
There are many reasons for a business to start implementing new innovative revenue models.
- You might want to increase your mobility so that you can work from wherever your life takes you.
- You might be swamped in the daily minutiae doing everything manually.
- You might feel your business model is old-fashioned and you want to design something modern.
- You might see an opportunity in the online space.
- You might want to add other, passive or active, revenue streams to scale your business.
Your small business is likely doing good – but you, the founder, and your small team might be feeling exhausted. You might have a desire to work from your mobile, summer cabin, or travels, and you haven’t quite figured out what it takes to do it. Maybe you see your competitors launch exciting new ventures that attract people in your industry, and you feel your current service can’t offer a similar level of customer experience. Or, maybe you are interested in building leveraged revenue streams that can bring you more income and scale.
Regardless of your reasons for Business Model Innovation, there are many ways to go about it.
The same size does not fit all
I’ve been somehow in the online game since 2008. That’s when I launched my first blog in the home decor niche. That was before social media, before Facebook and Instagram. I’ve worked in the online, technology, and digital business for over 20 years, both for multi-billion EUR behemoths and for the tiniest businesses. I’ve seen trends come and go, and cool businesses grow. And unfortunately, many cool businesses go, too.
One thing I’d like to remind you about: when you think about digitalizing your business (or any other business development), there’s certainly not one size that fits all businesses.
While many of our clients want to turn their local services into online courses that can serve clients beyond their local areas, add an e-commerce store to their service businesses, or add digital downloadable products to their offer mix… there are no RULES for what your business model should look like, just like there are no rules for how your life should look like.
(Digital) Transformation of your business model
Transforming your business model is not necessarily about digitalizing, but it’s always about transformation. This transformation can be hard for you and your team – you are used to, and most importantly, your clients are used to working with you in a certain way, and now you’re rocking the boat.
This is scary.
Change is always scary. But change is also what keeps your business growing and your people developing.
This might mean you need to say goodbye to certain clients that no longer support your next-level business…
This might mean you need to say goodbye to certain team members that no longer support your next-level business…
This almost always means you are saying “hello and welcome” to the new, improved version of yourself.
When transforming your business model, you want to pay attention to the Offer Suite that you are creating. In the Offer Suite, you should have offers that are designed to achieve your growth goals. Some offers are designed to generate leads, while others are designed to generate revenue. And, some offers are designed to generate profits… revenue and profits are not the same, and the mechanism to generate each might vary.
If you want to digitalize your business, you need to think about whether your desire is to go fully digital or partly. Here are some examples:
Your business has foundationally digitalized revenue models. This could
mean that while your customer-facing processes are non-digital, the internal
operations are digitalized. For example:
- you use digital tools in your internal work
- you have set up your payment, accounting, inventory, and customer acquisition systems so you can scale
- you run your office and internal communication with the help of modern tools and systems
- you leverage digital tools to build your brand awareness
- and so on…
Your business has partially digitalized revenue models. These could be:
- premium services with materials you send digitally
- physical products you sell online
- systematic onboarding processes for your high-end clients
- communication tools to enhance the customer experience
- project tools to keep track of your client projects
- portal for your VIP clients
- and so on…
Your business has completely digitalized revenue models. These could be:
- courses (if you like to teach your expertise)
- downloadable products
- tools and gadgets
- audio products
- music or images
- blog/media site selling ads or other people’s products
- and so on…
Keep in mind: when you make this kind of transformation, your client base is likely to change, or expand. The DIYers are most likely not the same type of clients as your white-glove service clients. Some of them might want to hire you, but the majority most likely don’t.
This transformation is equally about service development as it is about Operational Efficiency.
We help our clients to first analyze what needs to be improved, then innovate the right kind of business and revenue model, and lastly: build and scale it.
We have built online courses for consumers, turned artists into teachers of the business or art to other artists, launched and grown a number of e-commerce stores, built several media platforms that are monetized actively or passively, and created online summits and digital B2B education platforms, built VIP memberships for spa owners and built automated on/offboarding systems for high-end service professionals.
In our world, each client is different, so each plan is different, and the end results are different. And we keep them secret. If you would like to discover working with us, download the service & pricing guide and get in touch!
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