How to systematically adapt your business model to the new world

Customers are staying away, sales are collapsing: These are the clear symptoms that something in your company is no longer working. Making the right diagnosis is difficult if you don’t know what all you need to do to prevent this decline. However, if you know all the relevant areas and the right analysis questions, you will also find the right courses of action. Here is a tool that helps you get a thorough overview: the Business Model Canvas.

What exactly is your Business Model?

Everyone has at least a vague idea of what a Business Model is. Most often it is described as “we do xy for z.” Such a description is too vague if we want to change something in the model. A model is good if we can work with it: not so simplistic that you miss important things, not so complex that you paralyze yourself with detailed questions.

In my coaching, I like to work with the Business Model Canvas, because this tool fulfills exactly this requirement. It allows you to map, analyze and change your Business Model on a large sheet of paper (canvas). It contains nine building blocks that highlight the four most important areas of your business: customers, supply, infrastructure and finance. What’s more, it can be applied to any size business: A single self-employed person can work with it just as well as a large corporation. You can use it to quickly test new business ideas for effectiveness and completeness. But you can also use it at any time to check the “health” of the current business and take countermeasures if individual areas no longer correspond to the new reality.

The Business Model Canvas was developed by Alexander Osterwalder, a Swiss entrepreneur and management consultant. You can find plenty of literature on it in bookstores. Here we show you the nine building blocks and the most important checkup questions for the corona crisis and afterwards.

The nine building blocks of the Business Model Canvas are at a glance:

– Customers

– Value propositions

– Channels

– Customer relationships

– Resources

– Activities

– Partners

– Costs

– Revenues

Just like in a living organism, these building blocks interact with each other, each playing its part in the well-being of the company. If they all fulfill their function, the company is healthy. If one building block is not functioning properly, this will affect other building blocks. Here are the nine building blocks explained in more detail, each with a handful of checkup questions that are particularly relevant during and after the corona crisis:

 

  1. Customers

The people your business serves – they have specific needs, which you in turn serve with specific products. Some companies have their product first and then find their customers. Other companies have specific customers first and then -according to the latter’s needs – developed the appropriate product. In both cases, customers require your constant and close attention.

Here are some questions to examine this building block in light of the crisis:

– Are your most important customers still the same as before the crisis?

– How has your customers’ situation changed?

– How have your customers’ needs changed?

– Do you still have the right product to offer them for their needs?

– Can your products meet the needs of additional people (customer groups) that you have not yet addressed?

 

  1. Value propositions

… in the narrower sense are your products and services with which you create value for your customers. In a broader sense, these are all the problems you solve for your customers and all the needs of your customers that you fulfill. In short, anything in which your customer – consciously or unconsciously – recognizes value and decides, “Need it. Buy.”

Here are some questions to explore this building block in light of the crisis:

– Do your customers now have new needs that you can meet as well?

– Do your customers now have new problems that you can solve as well?

– How can you adapt your products and services to the new situation, the new needs and the new problems your customers have?

– Are new needs emerging in society at large that you can meet and produce and distribute with little effort?

– Which products can be offered digitally during the lockdown? At least partially?

– What opportunities do you have to add a digital Business Model to your existing model, to continue and better meet customer needs?

 

  1. Channels

… are all the ways in which your product reaches your customers. They include communication, distribution, and delivery logistics.

Here are some questions to examine this building block in light of the crisis:

– Can you still reach your customers well?

– Can your customers still reach you well?

– Can your customers still buy from you easily?

– If these channels are blocked: What alternatives can be implemented quickly?

 

  1. Customer relations

…include everything that gives you access to your customers: networks, memberships, joint commitment, joint projects, occasions for conversation, and events – in essence: the trust that has been built up. Customer relationships can be measured qualitatively: how good and sustainable are my customer relationships? And quantitatively: how many customers do I know? The goal is always to build up as many good customer relationships as possible with little effort.

Here are some questions to examine this building block in light of the crisis:

– What kind of relationship do my customers expect now?

– What measures can I use to strengthen customer relationships right now?

– How do we best stay connected with our customers in lockdown times?

– How do we show that we are there for our customers right now and still?

 

  1. Resources

… are all the things you have at your disposal to serve your customers in the best possible way. Your know-how, your strengths, the strengths of your employees, suppliers and partners, your sources of supply, your competitive advantages and “secret recipes”, your fixed assets and your social and financial capital.

Here are some questions to examine this building block in light of the crisis:

– What is the best way to focus our resources now?

– Which of our strengths could be brought to bear right now?

– What investment will help us achieve the most now?

– Are there any trump cards against our competitors that we can play right now?

 

  1. Activities

This means everything you (have to) do in-house to serve customers and secure revenue, i.e. production, marketing, administration, and sales. Parts of this can also be outsourced.

Here are some questions to examine this building block in light of the crisis:

– What additional activities can we use now to best serve our customers?

– Which activities should we strengthen right now?

– Which activities can we outsource now at low cost?

– Which cost-intensive activities can/must we discontinue now – temporarily or permanently?

 

  1. Partners

… are all those who are involved in providing value to your customers: Producers, agencies, landlords, suppliers, consultants and so on.

Here are some questions to explore this building block in light of the crisis:

– Do we still have the right partners for the current situation?

– What new partners do we need now?

– Which partners should we part with?

 

  1. Costs

All costs incurred in the value proposition: rent, maintenance, fees, salaries, cost of goods and so on.

Here are some questions to examine this building block in light of the crisis:

– What are the most important expense items for your Business Model?

– Are these expense items still essential?

– What resources and activities incur the greatest costs?

– Are these resources and activities still important?

– What can be limited and saved now?

– What should we not cut back on at all?

 

  1. Revenue

… the money you receive for your value proposition.

Here are some questions to explore this building block in light of the crisis:

– What would your customers pay for now?

– What would your customers pay more for now?

 

– What would or can’t your customers pay more for now?

– Should we change our prices?

– Should we build our value proposition differently and with new pricing?

– How can we create new revenue streams with our existing resources?

 

Making the right diagnosis

The advantage of the Business Model Canvas is that you have all the set screws in view and can examine one at a time. The checkup questions help you to reflect on every aspect of your Business Model in detail.