Short Answer:

Yes, if customers are not calling you and/or your cash flow is negative then change your business model.  You can get by with thin margins if you have the cash flow to survive.  But at some point, if you’re running on continuously low net profits, life isn’t as much fun.  Why not be in a business making more, not less money?

Longer Answer:

We have a client in the structural steel business in the NYC area.  Highly competitive with low margins, they decided to change their business model to provide structural steel when a project is running behind schedule.  Their tagline is “when you needed it yesterday.”  With typical $1 million to $2 million per day penalties if a contractor is running late, they are able to use demand-based pricing, like most of the unicorn companies, to set pricing, resulting in software-like margins in an otherwise tough business.  Why not change the game and find the arbitrage/demand-based model in your industry?

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