One of the biggest rules of growth is having the ability to adjust your business model to the market’s needs.
When Colin Thornton started Dial-a-Nerd over 14 years ago, creating a national footprint was priority number one. “In order to grow we needed to be everywhere. I didn’t even question the logic. I just opened each new branch as and when we could afford it,” he says.
Today, the business is all about consolidation, and Thornton is working hard to close branches, particularly in the more far flung areas.
It’s a move that was not made lightly, particularly as it involved a dramatic shift in how the business model operated.
“We could have ignored the signs and stuck to our original business plans. But that’s not how growth works.”
Focusing on the new
In Dial-a-Nerd’s case, two key shifts have resulted in the change, and both are linked to technology.
“It has become more and more viable to work remotely,” says Thornton. “Travel is expensive, and running a satellite office even more so. We have learnt that consolidation makes a lot more financial sense.
“It’s tough to let go of a plan that you have built up and followed so successfully, but the truth is that once we made the mental shift, we actually wished we had made the change sooner – it would have meant a significant saving on our bottom line.”
The second business model shift has been from the consumer to the corporate market. “Products are getting better and better,” says Thornton.
“The average consumer client used to need assistance every three to six months. Now it’s a year, if at all. Improved products just don’t need fixing.”
Recognising the way the market was going – and that their client base was steadily shrinking, Dial-a-Nerd turned its focus to the corporate market instead.
“We had always had the two separate divisions, but now we needed to focus on growing the corporate side as fast as the consumer side was shrinking,” explains Thornton.
“Corporate clients require a different skills set, training and attitude. It’s a market that pays us for peace of mind.
We need to be available within four to six hours to fix a problem. On the consumer side we could book a client in two to three days.
“In order to deliver this level of service, we need additional capacity, which often means we have technicians and consultants who are idle. This all needed to be accounted for when we devised the new model.
“Our differentiator is time, and because we are dealing with clients for whom downtime is critical, we can charge for this level of service.”
Often the biggest barrier to growth is not changes in the market or a shrinking customer base, but the inability of a business to adjust to those changes.
Business owners need to constantly evaluate the markets they operate within, and critically assess whether their business models are still relevant.