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What to consider when changing your business model

Posted on: October 07, 2014 | Author: ATB Business & Agriculture

Changing the direction of your business—whether that means selling to new markets, altering your operational structure, or modifying your product or service—is a big decision for any entrepreneur. But the truth is that in order to succeed, business owners must have the ability to adapt and change in line with market demand. Why? Because those who don’t run the risk of being left behind by their competitors.

So what considerations should an entrepreneur make before changing their business model? Here are four things you should think about before altering the direction of your venture:

  1. Change can be good.

    Charles Darwin once said, “It is not the strongest or the most intelligent who will survive but those who can best manage change.” And when it comes to business—he’s right. Often entrepreneurs only consider changing their business model when times are tough, sales are slumping, and business isn’t going so well. But the truth is that feeling backed into a corner actually encourages innovation and forces you to try new things. Relish the challenge that change brings and look to the future to consider the potential of your business as it evolves.
  2. Understand why change is necessary.

    Before you embark on any change, it’s important to take a step back, appraise the current state of your business and figure out why a change in direction is necessary. If the need for change stems from economic or market conditions, question how and why competitors in your field are managing to survive. Insights from your employees, customers and even suppliers may also prove valuable when trying to ascertain why a new direction is needed.
  3. Your customers should be the drivers of change.

    Times are changing at an accelerated rate, and your customers’ needs, desires, and demands are constantly evolving. Some changes—like the growing use of handheld technology, for example—are obvious. But there are some trends which are more subtle and are therefore harder to identify. “It’s important to be in tune with your industry and customers so you can see trends coming—ideally before they happen,” says Andrew Patricio, founder and CEO of BizLaunch, “this will enable you to adapt your business accordingly.”

    Andrew also adds that your customers should always be at the forefront of your mind when it comes to deciding how your business will continue to provide the products and services they need. “Your customers should always be the drivers of change in your business.”
  4. Research is key.

    Any change to the direction of your business comes with risk. This means that prior planning and exhaustive research is essential. “Before making any changes to your business model it’s important to conduct market research,” Andrew explains, “It’s also wise to take some time to prepare a thorough business plan that outlines your new direction, your goals, and how you plan to achieve them.” Andrew recommends that entrepreneurs revisit this document on a regular basis.

Ready to re-write your business plan? ATB's Business Plan Builder can help.

And don’t forget, this isn’t a one and done situation. Throughout your career as a business owner, it’s likely that you will have to regularly adapt your business plan in order to accommodate the ever-changing demands of your target market. Even the strongest business models eventually become stagnant and will be forced to alter their course.

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