Thursday, May 31, 2007

Rethink your business

The remarkable Donald Cooper, a Toronto manufacturer turned retailer turned business speaker and consultant, published a newsletter today with lots of great insights. The best bet is his lead article, “Does your business model need a reality check... before it's too late?”

“If your fundamental business model is defective, tired or no longer relevant, you're in big trouble," Donald writes. "You could be doing lots of other things right, but if the basic premise and operating model for your business is wrong, the end is in sight.”

He then cites several examples of companies that have reinvented their business to meet changing needs. Among them:

* On May 24th, Dell announced it will sell two computers through Wal-Mart – altering its longtime formula of selling directly to users.

* Toronto-based Barrymore Furniture did the opposite shift. It went from selling through retailers to selling to consumers. “They created a showroom in their factory and promised to make your sofa just the way you want it,” says Donald. “You're in charge...and their business is thriving!"

* Donald met recently with a financial-services client that has upended its business model, moving away from the traditional practice of offering clients free advice and charging sales commissions. His client now charges “a fair fee for good financial advice” and doesn't charge commissions. “This puts the focus on the client and eliminates any possible conflict of interest.”

The key link in these examples? Putting the focus on how your clients want to do business.

Is it time to reinvent your business model? As Donald says, “Is what you sell, how you sell it or how you do business the way of the future...or a relic of an irrelevant past?”

You can read his full newsletter here.

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