Your business has a life of its own. It wants you to treat it that way.
For business strategist Tara Gentile, your business model needs to be more than the formula for how you will make money. It needs to keep your business alive, aligned, and growing every day. During a break from filming Value Pricing & Business Models for Creative Entrepreneurs, Tara sat down with us to explain how and why you need to build your business to breathe on its own.
What does it mean for a business to be a “living, breathing thing?”
Having a business operate like a living, breathing, thing means that the individual pieces that make it up – the product or service being sold, the channels used to market and distribute it, the brand, customer profiles, sales cycle, pricing structure, everything – is integrated as a whole. That is, your business is greater than the sum of its parts (which is why such a model will make your life easier as a business owner).
The business model is how we quantify how our parts work together as a living, breathing organism. It is the combination of deeply knowing each piece and then knowing how they are all working together.
Why is it so important?
People tend to look at the parts of their businesses as very separate, which means that they aren’t working together and making success more difficult to achieve: marketing isn’t driving product development or visa versa; customer service is not guided by marketing or visa versa; customer targeting is not informing product development or visa versa. All these pieces end up being very insulated and not working well together — creating friction or inertia — meaning you, the business owner, need to work harder and harder to meet your goals.
With this scenario, I imagine that my body is living with my heart detached from my lungs, which are detached from my liver, etc. We need our systems to work together in order to feel good and do the things we want to do, whether that is running a marathon or enjoying dinner. By understanding your business as a whole as opposed to figuring out all the little separate parts, you can make a little tweak here or a push there and see much bigger results. It’s like when you start working out 5 days a week versus 4 days a week — you may see a huge improvement when you’ve actually only increased your input by 20 percent.
What has been your personal experience with remaking a business model?
When I was first getting started, I had products and services that had great value individually. However, each was geared to a slightly different customer, each had its own marketing site, and each related to its own separate brand. With this segmented set-up, when I wanted to sell more, I had to put a lot of energy into one product. While I was spinning my wheels on only one aspect of my business, I was ignoring the others that could have grown too.
Now, by re-creating my business with the model of a unified, living, breathing thing, I can get more with less. My business model allows me to market one time or have one sales process and really feel the ripple effect of that throughout the business. I am able to talk about both services I offer – high-end group coaching and low-end monthly membership — and sell these things together. Because of the way I’ve integrated the parts of my business, I’m not in a constant, crazy launch cycle and I don’t have to hustle more than I want to (for 50 percent of the year, I worked less than 20 hours a week and was still generating the six-figure revenue I’ve been generating for 3 years). The goal is to get the model to the point where it’s almost self-sustaining, where I can do less work and see the business work for itself.
What are your last thoughts for people building their business?
Most of the everyday things in life, like changing your diet or exercise habits, are an experiment. You don’t know if it’s going to work until you try it. That’s also the way a business model is designed: it’s always an experiment; we don’t know it’s going to work until we’ve implemented it. Although you can map things out and go through steps 1, 2, and 3, the business model is never “done.” It’s a never-ending process. You don’t get it perfect and then forget it, you experiment with it continually to get the results you want.