Word of the Day: Business Model

Word of the Day: Business Model from Blumer CPAs on Vimeo.

Transcript:

Word of the day or phrase of the day is business model. I’m writing some stuff about a business model right now, so it’s on my mind. So I wanted to to share it with you.

So a business model is basically how you capture, produce, and deliver value, basically. You run a business and the one thing you got to do is you got to figure out what’s the value that the market needs? How do we craft it and create it? How do we deliver it and how do we capture some of the value for ourselves in the form of a price? A business model constructs how you do that. And I’m kind of constructing the different components of it. So I wanted to talk about it. What particular part I wanted to talk about the business model is it’s seeking after simplicity.

So the worst thing you can do is build a business model nobody finds valuable, right? So that is a thing you don’t want to do. And oftentimes super complex business models for no reason are business models nobody wants to trudge through. Not even the firm can get through a complex, an unduly complex business model, because it’s so hard to extract and pull out the value and deliver it to the client.

So your business models, when you build them, you always want to make them as simple as possible. You’re always seeking as much simplicity, the bottom line simplicity in your business model as you can. And so one thing we do as consultants is we go look for complexities that create inefficiencies, and we see if we can cut those out. That’s a pretty simple goal of consulting as we’re looking through the business model. Because the goal of the business model is to pump a client need through the front end, do what you do inside, and then squirt it out on the back end. Super valuable to that client and giving them something they couldn’t have gotten on their own.

So the internal guts, where you’re creating that value and capturing it and mushing all that stuff around, making the sausage, you got to keep that simple so you can give as much value to the client as possible. Now I say make business models as simple as possible, but I already know business models are already complex and that’s why I say it. So you may go, I’m looking at mine and I think I need it. It still feels complex. That’s true. Especially in service-based companies.

A business model is complex, so it’s already complex and yours, even though it’s as simple as possible, may still look complex. Do you see the difference? I’m just saying make them as simple as you can. Don’t add unnecessary complexity if you don’t have to, or go seek to cut out some of that complexity, kind of smooth out the creating of the sausage, the value so to speak, so you can give that to the client.

So that’s some thoughts on business model. You know, we do consulting with creative agencies on their business model, where they’re stuck, specially in growth, fast growth with team, growing team, hiring team. These things create super amounts of complexity in their business model and people just tack stuff on and they don’t realize they’re doing that to their business model. And it gets, you got to trudge through it. It becomes like cement. And so we’ve got to kind of go clear some of that dross away. We do that work. So hit us up in our website or go to [email protected] and maybe we can help you too. Thanks for watching. We’ll see you.