Why modern business models are doubly worthwhile in "waste time"
Jonas Reuter
Waste time" begins in mid-December and ends in mid-January. The Christmas period through to the turn of the year is the main holiday period and plays a key role in helping employees to relax. In our private lives, we almost all love the "quiet time". For the success of a company, however, the quiet time is often also a "quiet time" in terms of sales. In the corporate cosmos, we call it "waste time".
During this time, it is very difficult to create value if you want to. You cannot reach anyone, wait for necessary answers or approvals and receive no goods or raw materials. The economy stands still for around 3-4 weeks.
Sales growth at the end of the year?
Invoices or final payments at the end of the financial year often conceal the sales shortfall. However, in a period with reduced or no work performance, no value is created that can be sold.
Many tried-and-tested business models are based on the production & sale or provision of services according to the classic "time for money" or "goods for money" model. A barter transaction that always works when the service provider and service recipient are available. Of course, with a good business model, this time can be compensated over the rest of the year. The hourly rates or prices and therefore the margins increase and the surplus profit covers vacation, Christmas and sick days.
Modern business models as a solution
Modern business models are another way out. Properly designed, these can generate a continuous cash flow. This is worthwhile throughout the year, as performance is largely decoupled from "expenditure". During "waste time", this pays off twice over. While payments continue, the service recipient is usually not available to consume services. This therefore always generates high profits when everything else is at a standstill.
Almost everyone is already a user of such business models. Be it flat rates for company telephone or internet, tickets for local transport or rental models. In other words, many things that we pay a flat rate per month or on a regular basis. We make these payments even when we are on vacation, when we cannot use them due to illness and often even when we no longer need them. This is because we have forgotten to cancel them or we appreciate the feeling of "but if I need it, I can use it".
That's why we are prepared to pay more
We pay different values with which we are prepared to pay more than with pay-per-use. We book flat rates because we would like to calculate what it costs us per year because the cost center pays for it anyway and the associated value of cost certainty. We book "software as a service" so that we don't have to worry about maintenance, updates and security, we pay for the value of convenience. We book car subscriptions or leasing for the value of flexibility. Or we simply finance things we don't need on a monthly basis because then it's not so expensive. Thinking further, in some business models we pay for constant availability/accessibility or, more differentiated, even the degree of availability.
Modern business models with modern pricing enable continuous cash flow and profit maximization. However, customers are also aware of these levers and these prices can only be enforced with a focus on customers and value for the customer. In extreme cases, these business models can even disrupt existing business models. Or when was the last time you were in a video store and how much did a VHS or DVD cost there?
About us:
MORGEN is a specialized management consultancy that focuses on the development of new business models for medium-sized companies. In particular, it supports owner-managed companies in their future-proof transformation. Knowledge transfer is at the heart of its consulting activities, which is why the MORGEN Blog regularly publishes articles on key topics such as digitalization, transformation, customer centricity and sustainability.