Your business model: Could less be more?

Many businesses develop more by happenstance than intention. Your initial model may have been innovative or a sure bet when you started operations. Is it still profitable and sustainable?

In the past few years the rate of market change has accelerated. Technology advancements have opened vastly different ways to do business. In addition, many industries have seen consolidation and are increasingly pressured by intensifying competition. For most companies, the playing field has been significantly changed.

When was the last time you took a good look at your existing business? Would you be better off with a smaller, more focused operation? It can be tempting to maintain existing business that is marginally profitable or just break even. After all, revenue from those aspects of your business adds to your gross; you may reason that the cash flow would be missed. But is that the complete picture?

Most underestimate the time and money spent on trying to keep shrinking operations afloat. Management, reporting, human resources, technology/ infrastructure maintenance and other overhead costs are often overlooked. Could those resources be better spent developing new opportunities with better potential?

If instead you focused attention on niche markets your company is well positioned to serve, could you send a clearer message and get better value for the marketing communication dollars?

Do you have resources tied up in marginally profitable operations that could be re-directed to fund future growth? If large footprint outlets with significant inventory are no longer working, might you sell them and use the cash to fund new initiatives that have better long-term potential?

Do you worry about keeping your best employees because they don’t see a clear path for advancement? Employees often value the chance to learn new skills and get experience in emerging markets.

If your analysis reveals parts of your operations that are non-performing that might be discontinued, take the time to develop a transition plan. In my next post, I’ll offer some thoughts about transition planning.

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Since 1991, Laurie Breitner has assisted organizations with operational improvement, organizational development and strategic planning. Learn more at http://www.lauriebreitner.com..

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