Your business model is the map for where you head into your business. It is essential when planning to build your business. Over the years, business models have been turned upside down. In this episode, Darren CdeBaca talks about how you can build your business model to show the weak links in your business and tighten up those connections. No matter how flexible your business model can be to fit in timely events in your business, your principles would still have to be firm. Grab this opportunity and reassess, restate, and reactivate your business model today! Tune in now.
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Develop & Activate Your Business Model
Thanks for tuning in. If you are not taking any notes, don't be afraid to come on back and reread any part of this to get those meaningful thoughts and suggestions. This is for your use. Make it part of your day and/or your vision as you see fit. Come on back, revisit, and take some notes. This is a great topic. The topic is titled Develop and Activate Your Business Model. A business model itself is thrown around in our industry and the financial industry somewhat frequently but to look at the simplistic ways to develop it and activate it with a passion, a strategy, and actions is a whole other level.
I wanted to bring this to your attention. I hope you enjoy this information. Buckle up. Let's have some fun. This topic is undeniable because of the truism. The weakest link in your chain will always be yanked the hardest. Isn't that the truth? That's what business models are all about. We want to make sure that we bring the invisible visible so we can identify and tighten that up so it's not taken advantage of as we go through our business model and activate our model with a plan.
The weakest link in our chain will always be yanked the hardest. We want to ensure we bring the invisible visible so we can identify and tighten that up.
It's all about preparing and elevating. The ultimate preparation is the development of your business model. That's the ultimate preparation. When you develop that business model, it gives you a direction, which we will talk about. Before we start, let me share a phrase that best defines our work at DCB Strategies. I love to do this at the beginning of every episode because it captures the result of achieving bold goals with a plan of accountability and purpose. Whether you're a professional or if this is for personal guidance and growth in your athletic world, I know you're ready for the statement.
The statement is, "Being the best and average have nothing in common." That's what DCB Strategies is built around. Repeat that to yourself. It's amazing when you do that. How does that resonate? I always have an analogy. Forgive me, those of you who have always followed my show, but the analogy is you draw a line in the sand and repeat this to yourself, "Being the best and average have nothing in common." Your brain is going to intuitively say, "Where am I, on the best side or the average side?" We're not here to judge at DCB Strategies. We're here to share tools that allow you to become, think, and act as the best do in our industry, around us in sports and other personal endeavors.
Over the last four decades, I've worked and witnessed the best of the best in this financial industry, which includes phenomenal advisors, private wealth advisors, wholesalers, leadership teams, branch managers, and asset managers. With that in mind, it's no secret that those who are among the best in their category versus the average experience the most success because they have taken the time and effort to develop and activate their business models.
Taking the time to develop and then set you on a path to activating your business model is so vital but let's make sure we're on the same page before we go forward. What is a business model? It's thrown around a lot in our vernacular in this business. Let's define it in a traditional sense so we can be on the same page throughout the formality of this discussion.
Some of you may know this gentleman. Peter Drucker was one of the most widely known and influential thinkers in management and whose work continues to be used by managers worldwide. According to Peter, the business model answers the following questions, "Who is your customer? What does the customer value? How do you deliver value?" More traditionally and in a better phrase, it's how your company or you create. Keep in mind if you're an advisor or a wholesaler that you're running your franchise or company. Thus, qualify.
Back to it, it's how you or your company create, deliver, and capture value. Develop and activate a business model which incorporates how you create, deliver, and capture value because at the end of the day, if we're not valuable or we don't have a value proposition, we're not going to get a payment for that. Thus, the bonus for our efforts becomes null and void. We're going to visit this again in terms of the outline of this framework for developing and activating your business model to save that for later.
I get the question all the time, "Is it valuable to take a moment and differentiate between a business model and a business plan?" It is key because that seems to be the trick. They are completely different. I don't mean to get into the bushes but we need to for a moment. Here's something to digest. A business model is the main idea of the business together with the description of how it will work. The business plan goes into detail to show how the idea is working.
Here's a very simple example. Thus, the business model has taken an analogy of MapQuest. If you need directions to your destination and you're driving from here to there in a 1-hour drive, a 10-hour drive, an 8-hour drive, or a 3-hour drive, you get directions and view your destination. You get directions with a view of your destination. That's the business model. The business plan makes your model work. It's analogous to getting in your car and driving your vehicle according to those directions that work for you to reach your destination. That's the plan. The plan is your action. The model is defining going back to the top, how you create, how you deliver, and how you capture value. You got it now.
I want to define that so we're on the same page. What is a business model? How do people define the difference between a model and a plan? A model is our direction. The plan is our actions. Let's get into it and have a little fun. How did this topic come about? There are two reasons. I constantly get reminded that this is an important topic. Number one is it's not surprising that this is one of the most popular areas of discussion within the financial industry as a result of the industry's atmosphere changing so dramatically over the last few years due to the pandemic. That's from 2020 to 2023.
It's changing in multiple ways, whether it's the lack of face-to-face meetings initially, the introduction of Zoom, or the reintroduction of value-adds outside of face-to-face. The handshake and the leverage factor of having big groups together were missing. You're in the industry. You're a professional. It has changed dramatically the landscape. We're getting small hints of it going back to what it was but it's on its way. The atmosphere was thrown upside down and has forced us, many of our colleagues, and other industry executives to reassess, restate, and reactivate their business models, which is the correct move.
I have an episode called ReAssess ReState ReActivate. That's perfect but this industry has caused three ways of defining new directions based on the different atmospheres. Reassess, restate, and reactivate, which is the correct move. Business models are meant to be written in pen. They're meant to be written in pencil because of the flexibility that will be incurred later on due to meaningful and timely events in our business. Keep in mind and thought that even though business models are to be written in pencil, your principles are to be written in pen. I want to keep that straight.
Your business model will reflect your principles. Those principles are non-negotiable and the way we create, deliver and capture our negotiable relative to the atmosphere that we have in front of us. The number one reason for this show is that in the last few years, business models have been turned upside down. The best have had the opportunity to reassess, restate, and reactivate. Thus, the need for movement and adjustments in their business models. That's number one.
Your business model will reflect your principles, and those principles are non-negotiable.
Number two, over the years of coaching at DCB Strategies, I've worked with a variety of clients. One of the main elements that we always discuss and bring to the table if they don't is the item of their business model. I ask them to define their business model for me. As a result, sometimes they get blank pauses in the phone call or stares in Zoom. The majority of the time because they have the pleasure of working with very successful executives, they say, "Here's my business model."
They want to tighten that up. As a result of that request, DCB Strategies developed a template for this topic, which is called the DCB Business Model Architecture. This is a one-off from that but I also have a print factor. If you're interested in having clarity on that, let me know. The business model architecture provides the clarity that a business model offers and the structure that is then ready to activate to achieve your relative growth goals.
The number one reason for this show is that the atmosphere has been turned upside down, and business models are meant to be flexible. Number two, the first point of discussion with clients is, "Let's talk about your business model because, without directions, we can't have any actions." That's the direction of our business as a business model. Let's get into the framework of what it's all about, which is cool. Let's get into the framework to develop and activate your business model.
Here's where you can take out a pen and write some notes. It's going to be vastly important when you have a chance to come back if you don't have a chance to, or you're at your table writing some notes or on your laptop. There are six important units of a business model. Let's keep it simple per Peter Drucker as we mentioned. Business models define how you will create, deliver, and capture value. Those are the three categories.
Let's visit each of the two units below each one of these categories, which brings us to six, as previously mentioned. You may want to write these down as they're the framework of your business model development or send me an email. I would be more than happy to get these to you in that format so you can follow along. As a reminder, we have three categories. Create, deliver, and capture our value. Two units underneath are the directions to create, deliver, and capture.
Goals And Vision
There you have it. You have your framework. Here we go. The first step, it is vital that every business model framework is built around your goals, short-term and long-term, and your vision. Keep this in mind. Why do we want to build something? That intuitively tells us that we have to have some effort. Let me share with you a truism about preparing. Everyone has the will to win but very few have the will to prepare to win. This is where you're preparing how important that is in getting ready to win.
Creation Of Value
Let's take a look. The first step is no business model should be developed without your short-term and long-term goals and vision in place. Number two, your first category is the creation of value. How are you or your company going to create value? The two business units underneath creating value are identifying your target market for clients and prospects. The number two unit is identifying your value chain.
Let's talk about number one. Number one unit, identify your target market for clients and prospects. This could be made up and should be made up of many sleeves. I'll use that visual of industry prospects, clients, college prospects, age-appropriate prospects or clients, whether you're a Millennial or a Baby Boomer, COIs or Centers Of Influences, past elements, past individuals for networking, whether it's X college, X groups, X nonprofits, or level of business entry.
Do you want to write down a sleeve of individuals and prospects for a $1 million minimum investment or a $500,000 investment? If you're a wholesaler, it's teams of $500 million, $1 billion, or $250 million under management. You know your business-level entry point. Another sleeve could be making sure that you have a maturity level of your sleeves that can match the people and prospects you're working with. If you're starting in the business, you may want to start with fresh starters in the business. If you're mature and tenured, you may want to attract yourself to that level too.
This activity of targeting your market for clients and prospects should never stop. It will consistently mature as you mature and change as you change. For example, for wholesalers out there identifying target market clients and prospects, you may want to say, "If I'm starting in the business, I feel very comfortable around tier 2 to tier 4 types of advisors who are average to above average to a sense versus tier 1 to private wealth, which is the upper echelon and elite." You may not have the wrestling match available for them to work with at the moment in terms of intellectually but you will be there soon.
Keep in mind that advisors are the same. When you start as an advisor or you're middle tier or top tier, you match your maturity level with that. How are you creating value? Whom do you want to create value with? It's your target market for clients and prospects. Identify that in sleeves. The number two unit of creating value is identifying your value chain. What are you creating value or service as? What is your value proposition? That's your value chain. From sourcing to marketing and sales, how do you want prospects and clients to think about and remember your brand?
Are you a passionate educator? Are you a passionate partner in the business? Are you a passionate concierge? Are you a problem solver? Are you a great listener? This is all about creating your brand, being memorable, and differentiating. We talk a lot about that at DCB because that's the key. You need to make sure that people know your brand. Identifying your value chain needs to include your visibility mapping, how your activity is in terms of creating tremendous visibility daily, and also your reputation enhancement actions. If you already have a reputation, what are your actions to enhance that? That's creating depth in your value chain.
The number one category is creating value. You make a list of sleeves of all these different markets and target markets for your clients and prospects. Number two, identify your value chain. Make sure that's clear, concise, and available to be repeatable, and that people remember you and the memorable brand that you're bringing to the table. Number one, remember, was creating value. Number two, how are you going to deliver value? You can create value with prospects and clients and also through your value chain but now you need to deliver the value. How are you going to leverage yourself to deliver value?
The number one unit underneath that is to mobilize your resources. It's important that you take inventory and write down the resources available to you to deliver your value proposition such as the firms, marketing department resource, various client presentation resources, resources from portfolio manager visits, and conference calls with your clients and/or advisors, topic experts in the industry that you bring on the road with you, or you visit your clients or prospects that provide also value-adds.
Value-adds are educational engagement activities where you provide people with, you celebrate with, and you bring ideas to them to give them ideas for their business and reasons to engage, whereas value-adds are educational. Consistent email or high-touch campaigns and top-notch CRM applications are going to be required for this. If we're differentiated touches along the way, you may want to make sure that you're updated on your different and timely research reports.
The second category is how you're going to deliver value. The number one unit is to mobilize your resources. Make a blank list of all the resources available and then rank them to what's most important to your clients and prospects that you are creating value with. Thus, above. The number two unit underneath deliver value is to identify your strengths and weaknesses. It's important to do that, not superficially but talk to a colleague or someone you trust in the business and say, "What do you see as my strengths and weaknesses?" After you identify them yourself, see if it's a match.
In terms of doing that, understand that there are focuses you need to have on your strengths while improving upon your weaknesses as necessary. For example, if your strength is passion in speaking, you're a cold calling machine, or you're a calendar conqueror, what I mean by that is you have activities in your calendar from 8:00 AM or 7:00 AM to 4:00 PM. You conquer it by getting those activities done. You're conquering your calendar versus a calendar running you. You're in charge of it. You're placing those value-added business unit actions, thus the plan in your calendar.
You're great at that. You're great at organization. You're in a smile and dialer out there. You're wonderful at putting together gatherings. Those are strengths. Understand your people skills, strengths, and weaknesses along the way, try not to tread too hard on your weaknesses, and make sure that your brand promotes your strengths. In the second category of delivering value, we talk about mobilizing your resources, making that list, and getting it ready from top to bottom.
Understand your people skills, strengths, and weaknesses. Try not to tread too hard on your weaknesses and ensure your brand promotes your strengths.
Capturing Value
Number two, identify your strengths and weaknesses that match your brand, promote it, and make sure it has a chin-up and chest-out type of activity. There we go. We've got number one. We talked about the two units underneath creating value. Number two, we talked about the two units underneath delivering value. We're going to talk about two units underneath the third category, which is capturing value. In terms of capturing value, the first unit is to identify and work with your business partners.
Look at the partners around you. Some people say those are resources but I feel as though they are actual business partners such as centers of influence for networking, internal professionals, and sales complex managers. If you're a wholesaler in our business, you want to leverage your time and self with them. You want to find them reasons to provide value-add engagements to them so they will be more than happy to be a partner for you and elevate your brand and their branch.
If you're a branch manager, you want to have a relationship and elevate yourself as partners with recruiters who are close to who's moving around the industry. Other colleagues in the business provide networking operations or networking gatherings with other colleagues in the business. In capturing value, the number one unit is to leverage your business partners.
It's all about leveraging your time. For every three people talking about you, there are probably going to be ten people that hear about you without even your effort other than the initial three that you already know and you've created a relationship with. Capture value through your business partners. Know who they are. Identify who they are. Make sure that they have a reason to work with you and that you provide a service and a partnership with them.
The number two unit of capturing value is key. No matter what level of business you're in if you're serving clients, whether you're a private wealth advisor, advisor, sales leadership team, or wholesaler, you have to set up a customer experience model. It's not a customer experience model that looks like a service model but a customer experience model.
Customers don't forget experiences. The essence is to look up to your clients and customers.
What are you doing to offer them that makes them want more? What are you offering them consistently as a customer or client that makes them want more of your time, your expertise, and your products? That's a very difficult question but the best answer and solve that riddle because once you start providing an experience model versus a service model, you change the game. A service model is not allowing your clients to want more. It's getting what they deserve. Wanting more is they get more than they deserve, and they want more of that. That's your experience.
That could be positioned in what your post-purchase relationships look like. How do you give them elements of more? How do they get contagious, and they continually want to hear from you, whether that could be in the process of onboarding new clients, reporting to existing clients, or quarterly statement reviews and requests from them?
How do you handle their request? Is it very uniquely? Is it open-ended questions? Is it closed-ended questions? There are all kinds of science and craftsmanship around this. How do you give a highly personalized touch to your clients? You get the drift there but that's number two of capturing values. Set up your customer experience model.
Let's review that briefly again. Number one is to create value by identifying your target market and clients for prospects. Number two, identify your value chain underneath creating value. The second category is to deliver value through mobilizing your resources. That's leveraging your resources and identifying your strengths and weaknesses. The number three category is capturing value by identifying and working with your business partners. The number two unit underneath that is setting up your experience model and activating it.
It's interesting that we went through categories and units but that's exactly what the framework is made up of. If you were following along, you could have written those down very easily. I would remind you if you want a framework, give me a call or an email. I'm more than happy to provide that for you. You can fill it out for your personal development, thus activation of your business model. Do keep in mind that business models are meant to be flexible. Thus, what we visited earlier on.
Don't be afraid to have that pencil out to have the ability to reassess, restate, and reactivate. The activation is the business plan. The reassessment and restatement are the business model of those three categories of create, deliver, and capture. There you have it. As a summary, we discussed the high correlation of success for those of you who have business models or know people who have business models. Number two, we talked a little bit about the difference between a business model and a business plan. A business model is a direction. The business plan is the actual action. You're getting in the car and driving through directions to get to your destination.
We discussed the importance of the model itself and the need to be flexible so you can move and adjust to go anywhere you need to achieve your goal. We also talked about the two reasons for us visiting this topic, the industry upheaval that has taken place that provides the need to reassess, restate, and reactivate, and also the fact that it's a starting point of conversations for any of DCB Strategies' clients who come to us. We talk about initially, "How does your business model look?"
We get right away into it to make sure that we start with that and we continue with a plan that's built with strategies and actions. We introduced you to the business model framework and the six essential units, 2 for each, 2 for create, 2 for deliver, and 2 for capture. More importantly of all, we discussed each of these 3 categories and attached their 2 defining units. There you have it. It's interesting that we all notice successful business models and plans. It all comes down to structure.
I was talking to a client. We talked about how motivation out there is far and few between but when you're motivated, it's game on. No one stands in the way of excitement. Motivation can dissipate but if you have a structure that leads to routine, your routine takes over. If you lack motivation, your routine takes over and continues with the structure, which is the discipline needed for success. The more structure you have in your business, the more freedom you will get in your life because you will be succeeding with clarity and calmness. As business models do, they give you direction.
I hope you enjoyed our topic and discussion points. This is filled with simplicity. You can start carving out your path to success and growth by developing and activating your business model. Thanks again. If you have any questions, thoughts, or comments, contact me at DCBStrategies.com or email me at Podcast@DCBStrategies.com. As I always say at the end of my show, stay healthy and stay passionate. Have a great day. Thanks again.
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