If the business model you started with isn’t working for you anymore, then it might be time for a business transformation. The market environment is constantly evolving, and your business has to evolve with it, otherwise, you’ll be left in the dust. The key to staying successful in the long term is to notice when it’s time to do a business transformation and to be strategic when you execute it. While this might seem like a daunting task, especially for a new business owner or entrepreneur, it is no less necessary. If you take your business transformation step by step, you are likely to succeed. This article outlines the business transformation framework, outlines the roadmap to your business transformation, and includes business transformation examples from business owners who have done it themselves.
What Is a Business Transformation?
A business transformation is a process of making fundamental changes to the strategic or operational way you run your business. You could conduct a business transformation in order to increase your revenue or to keep up with changes in the market. It could also be just to enhance your user experience or raise customer engagement or satisfaction.
Business Transformation Framework
While there is no right or wrong way to go about a business transformation, and what works for one business may not work for another, there are some basic guiding principles that can help you get started brainstorming how you want your business transformation to happen. Planning a transformation for your business using the business transformation framework will increase the likelihood that your plan will succeed, and also help you keep track of your progress along the way.
Business Assessment and Transformation Goals
One of the most popular ways to go about your business process transformation is using the business transformation framework developed by the others of the popular book, “Business Transformation Framework: To Get From Strategy To Execution.” The framework starts with two questions that will help you establish the current state of your business, as well as your business transformation goals, “What is the challenge?” and “How will we change?” The initial questions require taking a holistic look at your business, and deciding what the ideal end result of your business transformation might look like.
After you establish the challenge you are taking on in your business transformation and how your business will change in the end, you can begin to break down the way that you will implement the transformation. By zeroing in on each part of your business operations, you will be able to consider the specific ways that each one will be transformed. Breaking your business down into groups of operations will make it much easier to define what needs to change. The business transformation framework is broken down into these four categories of business operations:
- Customers and services: This category refers to the product or service your business provides, and the customers who purchase it.
- Processes and organization: This category contains everything that goes into the process of selling your product or service to your customers, including marketing, sales, and customer retention. Here, you’ll need to consider branding, the buyer journey, and each step of the sales process.
- Information and applications: This category includes the technology and data that supports the processes and organization you outlined in the category above. Consider what sales or CRM platform you use, what data you gather from each customer, how you implement your marketing techniques, and all of the applications you use to do so.
- IT infrastructure and facilities: This category refers to the physical technology and locations you use to carry out your business operations. It could include your office, a warehouse where you store merchandise, computers, telephones, servers, etc.
Requirements, Targets, and Changes
Now that you’ve established each category of the business transformation, you should consider the requirements, targets, and changes that it will entail for each of the business operations categories outlined above. Make sure to flesh out your plans as specifically as possible. When considering the requirements, you will lay out the guiding principles of your business transformation.
What needs to happen when you transform your business? Then, with those requirements in mind, you will decide on concrete targets for each one. To the extent possible, try to make these actual metrics. You should be able to measure things like revenue, cash flow, customer satisfaction, website traffic, number of transactions, etc.
Finally, you can outline the changes you will make in order to meet each requirement. What actions will you take that will get your business from where it is now to where you want it to be after your business transformation process is complete? If you have decided that your business transformation will include a rebrand, make sure to outline the changes that will be made to your branding and explain design principles. Include colors, fonts, and any other information that will help your brand designer understand your rebranding goals. After completing this step, you will have completed your business transformation framework and are prepared to get started.
Business Transformation Roadmap
Now that you understand the framework around a business transformation, you can start to consider the steps you will need to take to execute one for your business. With the framework in mind, you will assess your business and the value it already has, define your goals for your business transformation, create a budget to make sure your costs are within reason, then execute your business transformation. After all of these steps are complete, you can then assess how the transformation went, and if any further changes need to be made.
Step 1: Assess Your Business
While assessing your business’ value and metrics periodically is key to running a successful business operation, it’s especially important to do so before executing a business transformation. You’ll need to make it clear what value is there now so that you can decide what you want to change in your business transformation.
First, take a look at the financial side of your business. Consider the cash flow, revenue, costs, profitability, and financial ratios like your price-to-earnings ratio and ROI (return on investment) on recent business initiatives. Once you have a good idea of how your business is doing financially, you can have a better idea about what a realistic business transformation would look like for you. Then, you can move on to assessing other business metrics like customer engagement, satisfaction, and retention.
Step 2: Define Your Goals
After establishing where your business stands on the key metrics as-is, you can define your goals, or what you want to change at the end of the business transformation. Be as specific as possible when deciding what you want to change. If you can assign a number to the goal, do so. It will be much easier to achieve your goals if you are able to keep an end result in mind rather than just increasing or decreasing a metric.
When you define your business transformation goals, you should also consider the actions that will need to be taken, who will be doing the work towards achieving them, and the date when you expect them to be completed. Which employees will be responsible for developing new marketing campaigns to increase customer engagement? Who will redesign the user interface to improve the user experience on your website? Who will help rebrand your business by designing the new logo? Knowing what tasks must be done and having everything assigned in advance will allow you to get the ball rolling on your business transformation from the start, and also avoid problems with your budget or timeline.
Step 3: Create a Budget
This is the most important step on the roadmap to your business transformation. You’ll need to make sure you have enough money to transform your business the way you’ve planned to, otherwise, you may need to stop short of your ultimate goals. Assign a total amount of money to each action that will be taken throughout the process of your business transformation. Make sure you budget for staff who will be leading the transformation, as well as any new tools, technology, and other business operational costs. It’s also a good idea to allocate some funds in your budget to cover any unexpected costs that come up during your business transformation. No matter how well you plan it out, there is always the chance that something will come up once you put the plan into action.
Step 4: Execute Your Business Transformation
It is now time to get the wheels rolling on your business transformation. Depending on the size of your business and the goals you made, this step on your business transformation road map could take anywhere from weeks, to months, to years. Make sure to monitor the process to make sure each part of the transformation is adhering to your budget expectations, and make adjustments as necessary. You might find that you need to hire temporary employees or reassign your current staff to manage the workloads involved in the business transformation. You could also extend the timeline if any element of the transformation looks like it might take longer than expected. When making changes, ensure they are possible within your budget. If they are not, assess whether or not you can allocate more funding towards your business transformation.
Step 5: Assess Your Business Transformation
While it’s important to continually assess your business transformation at various points throughout the process so you can see what’s working and what might need to be changed, the final step on the business transformation roadmap is to assess how the process went as a whole. Reflect on what worked and what didn’t, whether or not your budget was realistic, whether or not you met your goals, and how satisfied you are with the result. If you notice that the business transformation did not go quite as expected, you can also assess what you still need to do at this step. You have reached the end of the business transformation roadmap, however, don’t stop assessing your business post-transformation. Continue to collect data and analyze your metrics to see how well your business transformation worked in the long run.
Business Transformation Examples
No matter your industry, there will come a time when a business transformation is necessary if you want to keep up with the market and keep your business going at a profit. What the transformation looks like, however, will vary based on the nature of your business. In some cases, the business transformation might even involve switching over to a different industry entirely. Below are two examples from business owners who did it themselves.
“I sold my e-commerce business, The Income Tax School, in December 2020, after attaining annualized growth of 40% and becoming very profitable. My original business, founded in 1987, was a multi-office tax preparation firm. I created an income tax school and launched it in 1989 for the purpose of recruiting and training tax preparers to support the expansion of my tax business to 26 locations. The tax business began to lose market share due to legislation and increased competition, and I eventually closed all but two locations. Meanwhile I realized the value of my income tax school and focused on making it an independent business, starting with licensing a turn-key package to other independent tax firms nationwide. In 2003, I decided to teach students directly nationwide (and other countries) through e-learning. The Income Tax School had over 4,000 students enrolled when I sold it. My transformation was from a retail storefront tax preparation chain to a very successful e-commerce business.”
-Chuck McCabe, Founder, The Income Tax School
“Since our makeover at the beginning of the new year, we have seen our traffic increase 10% in what is historically our lowest month, January, over our highest month, December. Before our recent makeover, The Forked Spoon's branding was done piecemeal over many years by many different outsourced professionals and internally. In Q4, I decided we needed a more modern and unified look to boost brand recognition across social media, Google, and the website. To achieve all of that uniformity simultaneously, we outsourced our logo development, icon development, and all social media covers to a single company that specializes in branding and was well-reviewed in our industry. We couldn't be happier with the results, and so far, our monthly audience of over 1,000,000 users seems to agree.”
-Jessica Randhawa, Owner and Head Chef, The Forked Spoon
The business transformation process is a huge undertaking. It takes a lot of time, budgeting, planning, and analyzing for it to pay off. However, following the business transformation framework can break down and simplify the process, helping you along the roadmap to success. Are you ready to try your hand at a business transformation? You can purchase an established e-commerce business from the Exchange Marketplace and execute a business transformation to rebrand and restructure it in any way you see fit.