In a fiercely competitive business landscape where 50% of new businesses fail in the first five years of being open, small businesses are challenged with coming up with creative ways to stay afloat. Employing an innovative disruptive business model might just be the solution for new businesses.
To keep current customers happy, most established businesses focus on making continuous incremental improvements on existing products or services, which is called sustaining innovation. On the other hand, companies that focus on disruptive innovations seek to create an entirely new or different product or way of doing things, which serves to meet customers’ future needs better. Companies that create disruptive business models break existing paradigms and end up creating new markets or reshaping existing ones, ultimately displacing once-established market leaders (think, the success of Netflix vs. the failure of Blockbuster, for example).
So how does an up and coming (or even established) business go about enacting a new, disruptive business model? The key is not being afraid to self-disrupt, even if it means doing away with a current business model in favor of a new approach. Businesses looking to remain competitive should also act quickly, as companies that are first-movers in disruption often fare better than ‘copycat’ disruptors.
For more tips on setting your business up to be disruptive, see the infographic from Fundera
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