Keeping Your Business Model Flexible

Stopping to Smell the Flowers

In August 2003, Gina Maschek, 31, and Josh Grossman, 30, started Beyond Blossoms, a Wilmington, Massachusetts, online florist. The idea was to deliver fresh-cut, European-style floral arrangements to corporate reception areas all around the Boston area. Beyond Blossoms would supply the vases, and customers would simply swap out the wilting flowers with fresh bouquets that Beyond Blossoms would deliver weekly under contract. "We thought, 'This is easy to do,'" Maschek says.

But the bloom came off the rose when the pair encountered challenges to their business model. Maschek and Grossman quickly learned that their corporate clientele wanted fresh flowers delivered by Monday morning at 9 a.m.--a staggering delivery challenge that meant working all day Sunday to fill orders. They also discovered it was very difficult to get companies to commit to long-term floral delivery contracts. To top it all off, a local floral competitor had a large portion of the downtown Boston corporate market sewn up, relegating Beyond Blossoms to suburban business parks on the outskirts of Boston. To supplement the business, they started delivering flower arrangements to private homes and rest homes, but that had its own thorns. "We thought [businesses] would be a little bit more flexible in their budgets, but they weren't," Maschek says. "For the homes, it was even tougher to [convince customers to] commit and say, 'I want a $50 arrangement every week.'"

Realizing their business model had to change, Maschek and Grossman switched from local delivery to online sales in December 2004, letting one of their investors manage Beyond Blossoms' supply chain. The company lowered its prices to carry more bouquets in the $46 to $48 range. The transition wasn't always easy; the company had to hire a box designer and simplify its floral arrangements so it could ship via FedEx. "We've positioned ourselves as an affordable company where you can still get great designs vs. stressing the great designs and not talking about price at all," Maschek says. "[Customers] want good value." Her advice? Get feedback from as many outsiders as possible about your revamped business plan before you make any big changes, and keep an open mind. "You have to learn so much about other markets," she says, "about what [customers] like and don't like." Today, the company has 10 part-time employees and projects 2006 sales of $500,000.

Just like the science of evolution is based on a series of very small, incremental changes that happen over the long run, customers don't have to notice the evolution in your business model overnight. In the end, your business model is all about the journey, not the destination. "Our experience is that [changing the business model is] not a cataclysmic, 180-degree turn," says McNeill. "It's a series of 30-degree turns that eventually ends up with you facing the opposite direction." Who knows? A change in scenery could do your company good.

Flexibility Test
Are you open-minded about your business model? Measure your own level of flexibility with this quick quiz. The more questions you answer "yes" to, the more open-minded you are about your business model.

1. I think it's very important to know what's going on in other industries because I know that evolution in those markets will eventually impact my business model.

2. I periodically envision the company being 180 degrees in the opposite direction, imagining it with everything from a franchising model to various pricing and distribution models used in other industries. I let my mind wander the map, and I encourage employees to do the same.

3. I regularly read magazines and trade publications from outside my industry.

4. Every so often, I ask our best customers what they don't like about our industry, from pricing to distribution. Their feedback can be incorporated in new ideas within the company's business model.

5. I contact a few former customers every month to find out why they stopped buying from us and what kinds of products and services they're buying instead. I also ask what they still find lacking in the products and services they buy.

6. I've asked a range of people--from valued customers and board members to business mentors--what they think of our company's current business model and whether it needs to change.

7. Our company's business model is different than it was just a few years ago. It's evolved as we've gotten to know our customers, the industry and the marketplace.

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Chris Penttila is a Washington, DC-based freelance journalist who covers workplace issues on her blog, Workplacediva.blogspot.com.

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This article was originally published in the April 2006 print edition of Entrepreneur with the headline: Model Behavior.

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