What the last few years have done is helped us understand the need for our business to be resilient. But it has also, as micro business owners, given us a lesson in life about how important it is that we look after ourselves!
Working out how best to ensure the resilience of our businesses and ourselves at the same time may feel challenging so in this How To Guide, I'm looking at business models. How can the structure of your business and the way you deliver your product or service influence how you & your business feels & feel more manageable. Can you you find ways to work more efficiently, reduce your costs, streamline your activity or appeal to customers in a new way?
Here I'm sharing an introduction to some ideas and models that you might like to ponder as you continue to analyse if you're running your business in the best way to make it future proofed for you and your customers. In each point, I'm sharing a download or a link to help you dive deeper if something catches your interest.
The Business Model Canvas - this is a very useful, one page tool to help you understand what you're doing and how you're doing it. It helps us re look at who we're serving, what our added value is and how we're delivering that to our customers. Here are the key elements that you need to note down and think about (Download a blank form from the image below) to play with your own too. Analysing what you do might give you insight into ways to broaden out what you do, streamline who you sell to, reduce costs, increase value etc:
Key Partners - these could be suppliers, funders, freelancers, awarding bodies, accreditation schemes or professional associations
Key Activities - what the actual things that you do day to day e.g. serving coffees, providing an online service, making products etc. It can be useful to put a % time on each.
Key Resources - these could be anything from raw materials to your venue, building, energy use & the humans inside your business too.
Value Proposition - what added value you're bringing to your customers. The value driven thing that you do. Remember to think beyond 'stuff' and focus on 'experience' too.
Customer Relationships - this might be lots of repeat customers or lots of new, online, face to face as well as thinking about if you're an expert to pupil, like a friend or vital partner to your client for example.
Channels - how you deliver your product or service - online, offline, both, e-commerce, third party selling, wholesalers, projects etc.
Customer Segments - how you split out your customers from regulars, occasionally, different needs of customers or occasions they buy for example.
Cost Structure - thinking about what it costs to run your business e.g. products you buy in, credit arrangements, how often you order, how much your time costs, hours you can deliver etc
Revenue Streams - what all the different ways in which you can create income. Are there lots of is it all on one client? Can you spot added ways to up sell or make something sold more regular?
Environmental & Societal Costs - what are the costs in your business to these things? How can you offset this?
Environmental & Societal Benefits - what additional benefit does your business bring to these elements. This is where micro businesses often shine brightest!
Think Circular - you may be very familiar with the idea of more circular ways of doing business. In its simplest terms, a circular business model is one which minimises raw material use, streamlines processes and energy use/waste creation & extends the lifetime of all that it produces. I basic example would be a washing machine manufacturer producing a green machine that reduces water & energy use, is mendable easily along the way and when finally broken, takes back the whole machine to rely parts for new machines to avoid landfill. Check out the Ellen McArthur Foundation to find hints and tips or read the brilliant 'Donut Economics' by Kate Raworth for more. What this approach does is to help us reduce costs to us but also provide more impactful value and purpose to our customers.
Servitisation - this is the concept of replacing a traditional way of running a business e.g. make product, sell product, use product to something that's ongoing, streamlined or a service. An example is Simply Club - instead of selling individual workshops and programmes throughout the year to new customers who need to find a larger amount of money in one go, Simply Club provides a 24/7, easy access to resources in return for an affordable monthly fee which is paid easily & automatically. You might like to think how to you could 'servitise' some of your activities & read what the World Economic Forum says about its ability to save the planet. You might also like the diagram below.