Business Model and Profitability
Since the digital technology has changed the way we consume StartUp companies have been proving a great agility to transform traditional industries. Disruptive businesses like Uber and AirBnB bring more than enthusiasm, great user experience or budget control. These StartUps create new employment opportunities and generate growing revenue. This post is not about celebrating StartUps, it is about the potential of SME aiming to think and act as a StartUp.
We come across many SMEs with proven products or services but facing issues to scale up and expand. At this stage private equity investors turned away. In a majority of cases the CEOs we meet are focused on their current clients and keeping them satisfied. The priority remains being able to pay internal monthly wages and other fixed expenses. According to us in those particular cases time has come to attempt and engage pivots.
Business model is the key for building growth and avoiding flat income curve. Many questions can be potentially raised to improve your profitability. Do you precisely know your customers? How can you improve your revenue with current clients? Is your company involved in your customers’ results and performance? Have you experimented implementing recurring revenue stream? Implementing trials with defined metrics will help to optimised business models.
Take a digital agency with standard business model based on fixed fees upfront and on completion. What we build is an innovative business model based on clients’ performance. Different models might suit different clients. A bespoke revenue stream can be built from a few structures.
EthiCap recognises the potential of SMEs with proven products or services by structuring and implementing innovative business model. This “extra layer” on top of traditional business model enhances motivation within the teams and targets growth and profit. Before committing to any new venture we always make sure this concept will be feasible.