Jim Muehlhausen

Designing or updating your business model becomes easier when you think through your offering, monetization, and sustainability. As you work on your business model, keep important tips in mind, ask questions to stay on track, and browse different pricing models to determine what's best for your business.

Until recently, no formal business model design tools existed. Entrepreneurs had no choice but to use their experience and wits to create business models. Sometimes this unstructured approach worked, and sometimes it didn’t. The founders of Southwest Airlines may have been successful doodling their business model on the back of a cocktail napkin, but you’ll be better served with a more structured approach.

Great business models command better margins than the competition. Sometimes, a business model can be improved simply by clever pricing strategies. The list below offers some methods to potentially raise prices and corresponding margins. Premium pricing: You can't help but think that expensive products are better.

If your current business model is no longer effective, it's time to make some changes. When you're designing or re-designing your business model, keep these questions in mind: Does the model generate margins superior to the competition? How easily can your idea be copied? What can you do to slow down the competition?

When designing a business model, you have a lot to remember. Refer to this handy list of business-model reminders to make sure you stay on track: Different is always better than better. The better mousetrap plan rarely works. No margin, no mission. Great business models have great margins. If it's not easy to sell, it's not worth doing.

When you're ready to create and analyze your own business model, jot down your ideas while using the business model wheel. This practical tool is also useful when you revisit the ideas you come up with during your annual planning process. The business model wheel focuses on the following areas: Offering Market attractiveness: The industry, niche, and customer segment you will sell to.

All business models erode and grow weaker over time. Your job is to assess the model and make changes before it’s too late. If your profit isn’t what it once was, consider raising your prices — without raising your prices. The following list includes ideas you may want to try: Revise the discount structure

Business model innovation is a necessity. The constant march of competition and time causes all business models to erode eventually — you can’t stand still and expect to get ahead. Regularly spend time updating your business model to get the most from your business. If you need innovation inspiration, look at other businesses.

They’re called innovations for a reason. Great ideas rarely are in the mainstream or are conformist. Some of the best ways to innovate a business model come from unusual or counterintuitive means. Here are ten ways you can buck convention and innovate your business model. Engage in activities your competitors won’t It’s easy to have competitive advantage when you have no competitors.