Adjusting your business model

Changing your business model can unlock huge secrets that will allow you to run a differentiated firm that is profitable. Although Alex Osterwalder has a popular Business Model Canvas, I prefer Ash Maurya's Lean Canvas. There are a total of nine components to Maurya's Canvas, but we'll focus on two that you can define as you adapt your business model.

The problem

List your client's three biggest problems. What problems do your customers have and how are they currently solving these problems? Most firms may list 'file a tax return' as a problem. But that is not really a problem since there are many alternatives to having a tax return filed (many firms will do it for that customer).  As Maurya says, “problems create space for innovation,” so fall in love with the problem, not your solution. Firms do too little work in uncovering their client's problems. It takes work and a few meetings before even the client can fully understand their problem. But it is required if you are to truly identify real problems that most firms cannot solve. Focusing on defining a client's problem is the first step to adjusting your business model. This should become a first step in your process of helping a new lead.

Customer segments

Another key component on your road to becoming an innovative firm is to identify the key customer segments in your firm. Who do you currently do most of your work for? Are there groups of clients you haven't noticed? Your team can probably help you with this. Once you know the group of customers you are serving, take it a step further and list the characteristics of your ideal customer. A great benefit to taking time to identify your customer segments is that you can become more focused on going after them. 'Serving anyone' is no strategy, and this causes paralysis in marketing. In fact, customer strategy can best be defined by who your firm will  not  serve. If serving anyone is not a good strategy, then a stronger definition of key customer segments will give you focus and nail down a huge part of a successful business model.

Maybe it's because I have a daughter who is about to go to college, but I've been guilty of creating innovation strategies that are based on trends, which are definitely short-sighted. Neither millennials like my daughter, or any other one generation or trend can bring clarity to running a modern practice.

We've created accidental business models in our firm over time, and we are now just questioning those models. I'm really discussing what we've most recently learned. Defining the key components mentioned above can take a lot of time, but taking the time can give you the basis for a real strategy to become and remain innovative for many years to come.

The Growth playbook provides you with a set of tools to transform your practice and double your profits in one year. Drawing on strategies employed by some of the world's most progressive firms, you'll learn how you can grow rapidly and build a sustainable modern practice. Download for free.