Last month’s article helped you identify the seven key numbers essential for driving growth towards the business your hard work deserves. Now, let’s look at how we can work with those numbers to make your business start working for you, instead of the other way around. It’s time to evaluate.
The Entrepreneurs’ Circle calls this step of The Masterplan, ‘Your Path’ as it is the clear way to your desired lifestyle. The question I aim to help you answer is, ‘Is my business capable of delivering my dream lifestyle?’ Your seven key numbers revealed where your business currently stands in terms of paying you. If we want to change those numbers for the better, we need to evaluate the business model, your customer profile and your pricing model.
Before we start, I’d like to remind you of your T.E.R.M.S – what you are willing to put into your business to achieve your goal. Keep this front of mind as it will help you retain focus as we embark on potentially large changes.
Once again, let’s begin with gaining a clear understanding of where your business currently is…
Map out your business model canvas
I use a brilliant tool called The One-Page Business Model Canvas, which allows you to visualise your business and the key elements within it that shape your strategy. Here you can plainly see how your business creates, delivers and captures value.
If you haven’t gone through this process, it is quite painless, but will reveal a lot in such a simple way, yet it’s essential to the next steps of business change.
Now, evaluate your current business model canvas from the perspective of your customer and consider these questions:
- Are you in the right market to achieve your T.E.R.M.S in the timeframe you’ve set?
- Might additional or alternative markets be better suited?
- Is your market big enough to give you the volume you require?
- Can you communicate with your market in a sustainable, affordable way?
- Are there new revenue streams open to you that you haven’t explored?
- Will you be able to generate enough revenue through this model?
- What kind of margins will you need to get to your T.E.R.M.S number?
- Does your current model generate positive cashflow?
- Is what you do sufficiently important to the customer?
- What do you actually provide to solve their problem?
- Is your model sufficiently scalable to meet your T.E.R.M.S?
Can you make any changes here that will impact your seven key numbers?
Next, consider – Who is your ideal customer?
Evaluating your business model may have raised the question of whether you have the right customers. I’m aware that I’m generating more questions for you than answers at this stage, but it’s all in the name of gaining clarity! So, ask yourself:
- Are your customers willing and able to spend their money on you?
- Is your marketplace specific, identifiable and contactable?
- Do your customers understand your value?
- Are you communicating your value clearly and at the right time, in the right way?
Again, you could work on the answers to these questions to ensure you have a clear vision of your ideal customer and they have a clear understanding of the value you represent.
Finally, break down your pricing model
Simply put, are you charging correctly? Many business owners are underselling their value by undervaluing their worth. The price to work with you should be relative to the value you represent, so try and avoid being low-cost to gain cheap wins.
Your hourly or daily rate is not the only way to evaluate your pricing model. Can you offer a retained service for a recurring revenue stream? Perhaps you can create packages or premium offerings? Could your existing customers buy more? If so, what would they like to buy that complements their current purchases?
There are lots of questions raised in this article, but I hope you can see how addressing them can manipulate those seven key numbers and make them work better for you. If not, perhaps you’d like a complimentary mentoring session or consultation?
In the meantime, I’ll leave with this quote, from John D. Rockefeller…
‘Don’t be afraid to give up the good to go for the great.’