With so much change in the world, now is the time to innovate your business model. To figure out how, try this exercise.
There is an old analogy that talks about how building a business is like raising a child. Just like a child, companies will hit growing pains along the way, and CEOs (parents) will have to make a lot of tough decisions as they try to push through to the next stage.
Sometimes, it doesn’t matter how creative or knowledgeable you are, you hit a roadblock and don’t know what to do. With a child, you are forced to make those tough decisions because, no matter what, the child will continue to grow. However, with businesses, they don’t just grow naturally. You have to force yourself to make those tough decisions and push the business forward.
Once a business gets up and running, most organizations struggle with innovation. At this point, you have found a model that works, so why change it? New ideas fight for resources and attention and often are put on the back burner while everyone is focused on the core engine that makes money. However, in today’s new world order, many of those core business models now are struggling. They lacked the flexibility needed to withstand such a drastic change in the market and increased supply chain restraints.
Make a change. If you’re struggling to come up with the “how” part of this equation, ask yourself this: “Does your business have a list of ideas that have sat around for years?” Perhaps somebody in the organization had once thrown out an idea which at the time felt “nice” or “cute,” but the core business model was working so well there wasn’t time or space to make it happen.
While most people don’t keep a record of those ideas, it is not atypical for ideas that buck the norm to get shoved aside when the core machine is humming along and life is good. Unfortunately, that can’t last forever and we inevitably struggle to remember what exactly those ideas were.
I suggest that you sit down with your team and ask everyone to recall those ideas that seemed so crazy and irrelevant back then and see if there is a place for them today. The most important component of this exercise is yourself as a leader. It’s OK to not like the ideas that are presented or know that they will not work — but don’t automatically shoot down an idea.
The best ideas for your company are going to come from your employees, and they need to feel like they can offer suggestions, no matter how crazy. Laugh, spitball ideas and pick the best ones. There is nothing worse than employees not speaking up because they feel dismissed or judged by you. Be open and consider everything.
Focusing all your energy on changing your core business model might feel like fighting gravity, so start small. Start by making sure that new ideas come to the surface, get resurrected and are considered for investment. Take the time with your team and ask for these ideas. Once you have built a list, pick a few good ones that are worthy of your investment and time.
Make sure to also look into all the financing options available to you. Growth does not have to be financed solely through cash flow. Are you able to get a loan from the bank or does a Small Business Administration (SBA) loan make more sense for you? Do you have a line of credit in place for emergencies to protect your cash flow? Would you consider bringing on an equity partner?
These all are questions you should be asking yourself to ensure your finances are ready for you to grow. These ideas might feel small and raw today, but they could be the keys to the future of your company.
Ami Kassar is the founder and CEO of MultiFunding, a Philadelphia-based consulting firm that specializes in helping business owners across the U.S. develop creative, cost-saving alternatives for their business debt needs and structure. He can be reached at firstname.lastname@example.org or multifunding.com.