Episode A.038 Business Models and Design

Introduction
Even though the new quarter doesn't start until Wednesday, we are jumping into it with both feet. BTW - that is also the theme for July - Being Agile. Two quick reasons for this theme now. First is we are in new territory when it comes to the economy, social factors, government action and how it is affecting our ability to run a profitable business. The second is how it matches with our previous emphasis around building a "Lean Organization'. The difference is simple - Agile is a mindset that uses the principles of Lean to succeed in unstable times.
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Show Objectives
The goal of today's show is to examine your business model to determine how to integrate or make as its driving factor - Agile.

Although this seems to be a little esoteric for a small business, making a decision on your business model is one of the most important decisions you will make, it is almost the equal of brand.

The question we will answer in the next hour is how do you create value for whom and how do you turn that into profit?

What You Need to Know
​A Business Model is your theory of the business, your assumptions about what the company will be paid to do. These are assumptions about what you will and will not do and must be stated openly to test against the market - are the assumptions valid?

• EPISODE A.004 BUSINESS MODELS
• EPISODE C.001 YOUR UNIQUE OFFER

Since our focus this month is on Agile, you are trading (selling) in speed both with customers and the business.

You are providing customers with an end product or service faster than the competition. It allows the business to charge a price premium because of this uniqueness or increase profitability through volume. Either way high speed means high profitability.

Speed as an internal condition is being faster to market, faster to leader status, faster to dominance.

Speed is the result and constant innovation is the cause. It is also the concept of quick nickles vs slow dimes; profit velocity. A time based profit model is based on innovation.

​What You Need to Do

1. WHO are the Target Customers?
   1. Large market with high growth potential​
   2. Identify segments with little competition
2. WHAT is the benefit for the Targeted Customers?
   1. Which segments compete on speed
   2. Which segments match your value proposition
3. HOW does the company create value the Target Customer will buy?
   1. How does your ability to produce faster than the competition affect their competitive advantage or lifestyle
   2. How does giving them more control over the process and therefore the end result affect their competitive advantage or lifestyle
4. HOW does the company make money?
   1. Margin: faster for higher margins per sale
   2. Volume: faster for greater volume of sales

Next Show: A.039 The Agile Culture