The Business Model Stress Test helps you to understand if your business model is future proof. Changes in markets, society and technology might impact your business model in the future for which you can prepare with this tool. With the Stress Test you can analyse the strong and weak parts of your business. It helps you to find opportunities for making your business more robust.
Download and print the Business Model Stress Test Canvas for stress testing your business model. For inspiration, look at the Stress Test example for Uber.
A Business Model Stress Test is most effective if done by a group of people. The group must contain people that are familiar with the business model. In addition, an external domain expert could be added. One person has to act as facilitator. This person chairs and guides the group through the stress test process.
In a Business Model Stress Test you confront a business model with relevant developments and uncertainties in politics, economy, society, technology, market or regulation. Some trends are quite certain, like the ageing population, while other developments are uncertain, like the economic environment. For selected developments we assess the impact on the business model and identify the business model’s strong and weak parts in a heat map. By following the steps below, you will be able to complete the Business Model Stress Test:
Step 1: describe the business model
Describe your current or future business model in a structured format, for example using the nine components of the Business Model Canvas or the STOF Business Model approach. This is required to be able to systematically test your business model’s components against future trends and uncertainties.
Step 2: select the essential scenarios
Select the most relevant developments (trends and uncertainties) in technology, market, society and regulation that may have an impact on the business model. You may gather these developments from a SWOT analysis or a PESTLE analysis that you have done yourself. However, many relevant developments can also be found in trend- and scenario reports or industry analyses that are freely available on the internet. Naturally, the uncertainties have multiple possible outcomes. You must consider the possible ‘extreme’ outcomes and include them in the Stress Test.
Step 3: confront the business model with the scenarios
Now it is time to confront the business model components - e.g. value proposition, customer segments and revenue model - with trends and uncertainties. How does your business model fit with these future developments, or how is it impacted? In the stress test you confront each business model component with each development in a ‘heat map’. Use a colouring scheme to indicate the impact of an uncertainty outcome on a BM element Use a green colour if the impact is clearly positive – the development is favourable for your business model. Use red colouring if a development has an obvious negative impact and may cause great problems to your business model. Use orange to indicate that a business model component requires attention due to certain development. If a development has no impact then you don’t need any colouring. Once the stress test is completed, the heat map will reveal the strong and the weak parts of your business model. The red parts provide potential showstoppers and the orange parts require at least some attention.
It is important to write down why a development is positive, negative or requires attention. This provides insights in the reasons behind the strong and weak parts and may provide clues as to how to strengthen the business model.
Step 4: analyse and improve
In this step you analyse the heat map. Where are the weak points and what adaptations can be made to improve the business model and make it more robust? The arguments that you have listed when doing the stress test can be used as clues towards formulating concrete actions that could help you to improve your business model further.