What if…your strategy consultant gave your business model an eight-point health check?

According to popular wisdom, more businesses fail coming out of a recession than going into it. This is often attributed to a lack of funding to support the new growth. However, it is also because the business model is not robust enough to survive in a new environment.  

Is your business model tough enough? As a business strategist and executive coach I find the eight-point business model health check is a great blueprint for companies looking to grow out of the recession. And it’s a great time of year for business owners and CEOs to undertake the check and plan ahead for when everyone returns refreshed from their summer break.  

1. Strong commercial proposition
   Is there a clear target market with a definable problem or shortage for which they will pay good money for your solution? 
2. Quality product or service
   Does your product or service do “what it says on the tin” and more?
   Is there something innovative about your offering and is it sustainable? 
3. Clear strategy
   You must have a plan that clearly states:  - Who the target customers are?
   - What problem your product/service solves and how?
   - Where the market is?
   - How you are going to satisfy it?
   - How much will it all cost?
   - What profit will you make and when? 
4. Predictable and/or visible income stream
   What lock-in do you have with your customers – service contracts? Loyalty programmes? The value of a business is in the customer base, the more secure this is, the greater the value. 
5. Broad customer and supplier base
   Make sure each individual customer and supplier accounts for less than 12% of your business. If one of them goes belly up it won’t put your business at risk. 
6. Growth market or growing niche?
   Do you have firm evidence of your business being in a growing market or market niche? What stage of its life cycle has the market reached?
7. Barriers to entry
   Are there any barriers to market entry that you have hold of – technology / intellectual property, resources, supplies, people know how, channels to market? 
8. Management Team
   Does your management team have a track record of hitting tough targets and deadlines with limited resources?  Does your management structure work so that when you put your foot to the gas your business leaps forward?  

If you would like more information on the eight-point business model health check or to join the What If Business Model Programme then email me richard.bosworth@whatifspecialist.com.  You can also follow @richardwhatif on Twitter and find me on LinkedIn under Richard Bosworth.