Transitioning to an Online Business Model
As I write this article I am at home under lockdown from the Coronavirus pandemic. Normally I would write these articles at my office. I, like so many others globally, have been forced to adapt from a commute to office to a stay at home office. Our company also offers training at our training room and that also has come to a stop. Thankfully we have been able to transition a very small percentage of our training to online. While business therefore has been reduced considerably, bills still have to be paid, salaries, wages, utilities and rent to name a few.
This new situation is therefore forcing us, and many others, to consider transitioning at least part of our business to an online model. But how do we transfer a service business to an online model? In this article I would like to offer some suggestions.
Every business model can be represented by a Basic Business Model (See Fig 1):
To transition to an Online Business Model is to attempt to add or convert one or more of the blocks to online.
For example: Can you develop an online Customer Segment? That is can you have a group of customers that you locate and interact with mainly online? Can these customer relationships be done online? This would require marketing your services online and offering online customer service, using online communication channels.
What about one or two of your key activities? Take for instance internal services… can you use an online Accounting software e.g. QuickBooks Online. What about outsourcing Human Resources and payroll to an online supplier? Can you conduct your administration online for example online meetings using Zoom?
Can you develop a new line of online partners e.g. suppliers of database management? Can you switch to online banking and online payments? Can you switch to online cloud storage of material?
What about your offer? Can you create a new online product line? For example selling online information or services to the new online customer category.
Looking at your business, in this framework, there are many aspects of your business, that with a little imagination and creativity, you can convert to an online model.
Many of you may say “Why should we go through all of this? Just wait until the Coronavirus is over and then go back to business as usual.” You may be right. But there is always the possibility that things change during this period. Coming out of the 2008 financial crisis there was an explosion of new financial regulations. Organizations such as the FIU (Financial Intelligence Unit), regulations surrounding the AML (Anti Money Laundering) and the CFT (Counter Financing of Terrorism) became prominent on the financial landscape.
Also, you may be able to add this new online business model to your regular brick and mortar business and come out bigger and better after this new crisis. Or your organization may be more resilient in the face of another crisis in the not too distant horizon.