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Is your business model broken?

Is your business model broken?

Guest Blog

QUESTION: My sales have reached a peak in recent years and are now on the decline. I am trying to reassess my business model, to determine the cause of the problem. What can you suggest?

ANSWER: Yours is a problem that may require some unbiased outside assistance.

It is common for owners and managers of small businesses to be so attached to their business model that they fail to see and react to changes in technology and the buying habits of their customers.

Just because your way of doing things has been successful in the past is no guarantee it will continue to be successful in the future.

I suggest you begin by separating the products and services you provide into various profit centers, tracking both income and associated expenses. You might find that some of these products and services are profitable, while others are not.

You then have to decide if the unprofitable profit centers can be made profitable or if you should eliminate them and concentrate on growing the profitable centers. If your inclination is to salvage the under-performing center, you need to re-evaluate the situation.

The following are several areas on which you need to focus your attention:

  • Is the product or service you offer the newest and the best in the industry? Or can you use technology to create better products, reduce costs and improve your competitiveness in the marketplace?
  • Do you know what problems your customers are facing, and are your products and services relevant to their needs?
  • Does your delivery system and turn-around time accommodate your customers’ needs?
  • Have you cultivated a team mentality among your employees? Do they understand your goals and your customers’ needs? Do you have the right people doing tasks for which they are well-suited? And do you reward them for going beyond the call of duty?

Unless you are confident you can correct conditions adversely affecting your business, you should consider cutting your losses and redirecting your efforts and resources to growing the centers that are profitable.

Re-evaluating your Business Plan or Model is a critical turnaround strategy. The volunteer counselors at Naples SCORE are an excellent resource to offer free, professional, unbiased advice and counsel.


Gray Poehler is a volunteer with the Naples Chapter of SCORE, Counselors to America’s Small Business. Select questions will be featured in the Naples News. To ask a question or request free and confidential business counseling, go to or call (239) 430-0081.

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