What to consider when expanding business models
The world is moving more quickly than ever, customer expectations are always evolving, as a result, more organizations are responding with new business models and market offerings. But replacing old models and introducing new ones isn’t something to be taken lightly. From the two-person startup to the Fortune 500 corporation, a strong, stable revenue stream is the foundation of business success.
Here are a few important points to remember when expanding business models.
Several paths to growth
Revenue streams are no longer static. Consider the possibilities: For one, your company can introduce a completely new product or service to the market. You can also repackage an existing product or service to meet the needs of a new audience. You can even “product-ify” a service or “service-ify” a product, depending on customer needs.
Many companies have seen success by simply adjusting the manner in which their offerings are consumed. For example, one of our customers, a US-based digital agency, already had high-performing offerings; but after repeatedly receiving requests for “health checks,” they took the opportunity to go further by developing a diagnostic tool with a self-service consumption model streamlined for customers. Whether you grow through acquisition, innovation, or any means described here, it’s important to recognize that you have many paths to growth.
A single view of your data
With so many different paths to growth, how do you decide which is most optimal? You could take a shot in the dark and see what sticks, but that’s risky and demands that you have the processes in place to rapidly course-correct as needed (see next point). But the most strategic way to find optimal growth points requires tapping into the wealth of data generated by your organization on a daily basis. By analyzing historical customer data, you can best develop insights that point you to your next best opportunities.
This requires that you have a single view into your data; not a series of disparate sources with contradicting, confusing data. As a bonus, having all the data in one place helps you make a decision about pursuing new business models, and also helps you execute on the plan to do so. Having cross-functional business data on one platform allows business leaders to expand into new geographies and support new legal entities more easily than ever, without disrupting the core business.
Agility is critical to your success
No matter which path you take to grow your business, it’s imperative to remember that the business world is in motion. What worked well yesterday may change tomorrow, so you need the people, processes, and technologies to adapt to change. As previously noted, you first need to recognize that business and customer expectations are in flux. Additionally, you need systems in place that give you a complete view of your customers so that you can make informed strategic decisions.
Finally, and just as important, is making agility core to the way you do business. After pursuing a new business model, you may find that you have to quickly adjust to make the new revenue stream profitable—or to double down on its success. One FinancialForce customer previously needed up to two years to introduce a new product, but can now introduce and track new offerings much more quickly, allowing them to be a fierce competitor in the market.
To learn more about how finance leaders are becoming partners in business growth, download the Innovators ebook, featuring tips and insights from CFOs and other business leaders.