Entrepreneurs need to be flexible enough to consider a new business model if the old one starts to fail. Radical change might even make the original dreams come true.
Screen capture from www.dreamitmakeit.com.
When entrepreneurs enter the market, it is often with a very clear vision for their business. They know what they want to sell and to whom they want to sell it.
Alecia Venkataraman, who is completing her master of business administration degree at Belmont University, where I teach, launched her nonprofit, Make It Beautiful, to serve a very specific group of people.
Based on her own experience as a young adult who overcame great personal adversity, Alecia wanted to create an organization that would help others facing similar life circumstances. Make It Beautiful would offer services to help inspire these people to pursue their own dreams.
MIB developed programs for children facing terminal illnesses, as well as their families; for single parents and their children; for families trying to start over after tragedies; and for others facing significant adversities.
MIB had a team that offered services in life coaching, wellness counseling, legal issues, career planning and connecting with community resources. From its very beginning, MIB was overwhelmed with potential clients seeking help. Alecia had appeared to identify a need and a solution among her target population.
However, as successful as its programs were, the business model of MIB had a flaw. It relied on donations and sponsorships to fund the revenues it needed for its operations, and Alecia was not able to secure enough funding to sustain the idea.
Alecia had been supplementing operations from her own savings, but that money was running out. It became painfully clear that she'd have to cease operations at MIB.
Along the way, Alecia had sought advice from many different people about the problems she was having with the company. They all believed that the concept she was offering had value -- and that people would be willing to pay for it.
Then it dawned on Alecia.
It was time to try to take the services offered at MIB and offer them to a different market that had the ability to pay. Like most entrepreneurs, she had to adapt her business model.
"When failure or loss happens in business, it isn't necessarily the business model that needs to be revisited, but the market in which the business model is being used," she says.
So, she launched a new company, Dream It Make It, which offers similar services to aspiring musicians, models, actresses, athletes, authors and entrepreneurs. The new company -- such as Alecia's former one -- found immediate success in the market.
But this concept is based on a business model that is able to generate fees from the clients it serves.
"In trying to meet the challenges of an ever-changing economy and business environment, I've learned to not only accept but welcome what these changes might require of my business model," Alecia said.
The epilogue to this story is that Dream It Make It's success now offers Alecia the chance to reopen the nonprofit Make It Beautiful. Alecia will be using a percentage of the profits of her new company to fund operations of MIB when it reopens next month.
Both of her ventures can now become successful. This became possible only after Alecia adapted and changed her basic business model.
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