A business model describes key parts of the business around which you make ongoing decisions. Examples include your purpose, values, target audience, products/services you sell, and value proposition.
All businesses have a business model. For an undefined model, the company typically struggles to answer questions about its key business elements. Below is an example of a business model that lacks clarity:
Example of a business model that lacks clarity
- What is your organizational purpose? To make money
- What are your company values? We hire good people who have good values
- What do you sell? Employee benefits policies
- To whom do you sell? Anyone that needs it
- What types of challenges or frustrations does your audience feel? The cost of benefits is too high
- What is your value proposition? Good service and thorough shopping at renewal
- Describe your client experience: We hire good people, and they take care of our clients
A business model should describe key parts of the business around which you make ongoing decisions. Below is an example of a business model that is fully developed and clear:
Example of a developed business model with clarity
- What is your organizational purpose?: To educate people and help them make sound business decisions for the benefit of both the employer and the employees
- What are your company values?: Collaboration, Education, Communication, Problem Solving
- What do you sell?: Employee benefit and HR consulting services designed to help employers manage costs and improve overall outcomes for and with their employees
- To whom do you sell?: Employer groups generally with 25 – 250 employees who value their employees and want to do right by them with the environment they create and the support they offer
- What types of challenges or frustrations does your audience feel?: They know the cost of benefits is too high and want to find alternatives. They also seek out answers for many other related topics:
- How to keep employee engagement high?
- How to keep employee turnover low?
- How to attract good employees and keep them once they join the team?
- How to stay in compliance and out of trouble?
- How to most efficiently manage HR operations?
- How to create a good experience for employees so they want to stay and recommend us to their friends?
- Describe your client experience: We think about the experience our clients have before they ever become a client. We want them to interact with our marketing and salespeople and feel that they’ve been educated and learned new things throughout all their interactions.
When someone becomes a client, we want them to be already familiar with the people that will help manage their account, taking confidence from the depth of our team. We want them to feel welcomed into our agency and feel that they are important to us. As much as possible, we manage our interactions by proactively organizing the work we do with them and establishing ourselves as the guides on this journey.
What do I do with the answers?
Spend time thinking through each area, discuss with your team, and come to a consensus. Write a concise description for each area, and then share the consolidated answers with everyone on the team.
Discuss the ideas regularly and share example stories of the team and/or client interactions that demonstrate each area. The more you talk about the business model components, the better people understand your intent, the better they can represent it to your clients.