The annual business model review is a deliberate exercise in asking whether the way you make money is still the best way to make money. Markets change. Costs change. Customer preferences change. Competitors emerge. An annual review creates the opportunity to adapt proactively rather than reactively.
The Five Business Model Questions
(1) Who exactly is our customer, and has that changed? (2) What problem are we solving for them, and is our solution still the best available? (3) How do we acquire customers, and is that channel still efficient? (4) What are our unit economics, and have they improved or degraded? (5) What would we build differently if we were starting over today?
Identifying Model Assumptions to Test
Every business model rests on a set of assumptions about customers, pricing, costs, and competition. Write down the five assumptions your model depends on most. Then ask: when did you last test each one? Are they still valid? Assumptions that have not been tested in more than two years are either confirmed (good) or dangerously outdated (bad).
Key Takeaways
- Annual business model review surfaces opportunities for improvement before external pressure forces reaction.
- Identify and test the five assumptions your model depends on most.
- The most valuable question: "What would we build differently if starting over today?"—then ask why you are not doing that.
