About 10 years ago I was part of a CEO roundtable group where I was first asked this question. I replied that I had a business plan. That was not the right answer.
More recently I attended an AIMIA conference on developing business models that make money from the web. We heard from Sportsgirl, Telstra, 99 designs and may others who described their business models.
‘A business model describes the rationale of how an organization creates, delivers, and captures value – economic, social, or other forms of value. The process of business model design is part of business strategy.’
So it is actually a different way of thinking about your business and where you want it to go.
A business plan should identify your business model. We are all in a creative and entrepreneurial business. Our industry is rapidly changing and shifting. We all need a business model that recognises this change and equips us to stay in front of the change.
The process begins with comparing your business model with that of your competitor.
A recent IBM survey showed that 74% of the companies surveyed have never compared their business model with that of (new) competitors.
This is incredible in a time when new business models are changing the rules of the game in publishing, music, banking, news, professional services, and many more. For example look at how iTunes has changed the music industry and the impact it is having on magazine, newspapers and books.
The internet, mobile communications and social media are technologies that have dramatically changed the way we connect and the way that business is conducted locally and globally. Virtual access has changed the physical office into work pods offsite and remote. The communication lines of the traditional business are breaking down.
So how do we respond to this?
Quite probably the single most important aspect of a business model is the definition of the target market that your studio will approach.
It all stems from selecting a clearly defined market segment that you will approach with a design service that is needed and valued.