If you weren’t able to attend my presentation at the recent ABC Spring Educational Conference in Orlando, here’s a summary of what I talked about. Hope you find it interesting.

Everyone seems to agree that the world is changing more rapidly than ever. I started The First Years, Inc. in 1972 and ran it for 32 years until it was sold in 2004. At the time of the sale, our sales were over $140 million and growing, we had $28 million in cash, and we had a solid business model in place. However, if I were starting a company today, the model would be quite different. Too much has changed.

If you’re not getting the financial results you’d like, it may well be that your business model has not kept up with the times. But even if you are doing well, it’s wise to have a mindset of continuous evolutionary business model improvement.

What do I mean by a business model? It’s your company’s entire system for delivering value to your customers while making a profit. It includes the products you sell of course but it’s not just about products. For example, the IPod would have been nothing without ITunes and the ITunes store concept. For the purpose of creating or improving a business model, it’s helpful to understand its components. Every company whether it’s a juvenile product manufacturer, retailer, restaurant, or airline has the same six components.

Your Value Proposition is who your customers are, what you provide them—your products or services, and why they will prefer you to the alternatives—specifically what unique benefits you provide. How you make their lives better?

Your company’s Culture is the critical “soft” stuff that holds everything together. Culture includes your core values, your shared vision of what your company can become, your brand identity, and even your compensation and rewards policy because of how that impacts core values like teamwork. Companies with long-term success typically have strong cultures that are vigorously enforced—like Walmart, Apple, Disney, and Southwest Airlines.

You need a way to get your products or services as well as your all important “why we’re better” message to your customers. You do that through Channels. You may sell through specialty retailers, mass retailers, etailers, your own web site, mall kiosks, drones? Some combination? Your “why we’re better” message may get delivered via the same routes for example packaging, store personnel or signage at retail or information on a web site or through other media?

Your Operating Processes are all the ongoing routine functions your company performs. Like developing products, managing your human resources, maintaining relationships with retailers and consumers, producing products, etc. This is a component that should be improved continuously no matter what.

Resources are the people, skill sets, facilities, equipment, and financial strength required to perform your processes. This is another component that should continuously improve—especially the quality and skills of your people.

And, finally Pricing is the financial formula of your business. What are your revenue streams? Just product sales or also fees for services? What’s your pricing structure? What margins do you and any intermediaries make? What are your costs? Will all these components work together to make a profit?

So that’s all there is to it. These components are the dials you can turn, so to speak, to create and improve your business and there are an infinite number of potential variations limited only by your imagination.

I recommend to my clients that at least twice a year they update their understanding of internal and external current reality and gather their key staff members to review the current business model and identify possible improvements. The question to be asked is, “If we were starting the business today, how would we design our business model?” This “business model evolution” process is replacing the old annual strategic planning exercise we’ve all used in the past. It takes a holistic view of the entire company rather than a piecemeal approach that can produce unintended consequences. It’s more likely to generate breakthrough versus incremental improvements. And implementation is more straightforward. I’ll get into the detail of the process in a future post.

At The First Years, our original business model was changed somewhat dramatically over the years as new competitors appeared, retailers changed their strategies, new technologies came along, or opportunities presented themselves. The result was that we kept what started as a family company in 1952 going for 52 years before a successful sale and created a brand which is now 42 years old and still in existence. It’s all about staying up with the times.