How the EPOCH business model will increase your turnover or your money back
What I am about to describe is the EPOCH model which is freely available for you to use under our creative commons licence. It is free so if I doesn’t work you won’t get any cash but I will give you your time back, maybe by coming round and doing some gardening or cleaning your car or sorting out your web page :)
First of all, the EPOCH model is a 5-stage process to help your thinking and discussion and understand your current earnings potential as well as possible new income streams. You can work through this on your own, you can work through this with your board, you can involve staff, users and stakeholders and you can even ask someone like me to come along and facilitate it.
The EPOCH model asks 5 questions and each question feeds into the subsequent question. The 5 questions are:
E – What are you EXCELLENT at?
P – What PEOPLE could benefit from you doing the things you are excellent at?
O – What are the OUTCOMES on the people who are you are doing your excellent thing to?
C – Who would COMMISSION you for these outcomes?
H – HOW MUCH would these commissioners pay for these outcomes?
So let’s go through these one step at a time.
Step one is E – What are you EXCELLENT at?
This is often a hard one for people. They know what they do and what they want to do but have never really given much thought to what they are excellent at. Let’s say you run a community café – is your food or drink excellent? By which I mean is it much better than your competitors? Could I come along and easily replicate what you do? If the answer is yes – you are in trouble. If I can come along and replicate it to the same quality then you can only really compete on price and you are going to spend the rest of your life cost-cutting, penny-pinching and trying to undercut your opposition. That isn’t a life! If that’s all you can do, jack it all in now, sell your car, buy a one-way flight to a tropical beach and spend the rest of your days sipping rum from the bellybuttons of Nepalese madiens – it will be far far more rewarding.
The other issue is that what you are excellent at may not be what you are currently doing. You may have real talent as a facilitator, or a chef, or a trainer or a gardener and you may work in the accounts department. Your excellence is often in the areas of your passion and spending time doing what you are really excellent and passionate at is the beginning of real personal happiness as well as business success. So think of the whole organisation as well as the people within it and tease out the areas of real passion that you are really good at and crucially better than your current and future competitors.
Most organisations and people I have worked with can tease out at least 5 things they are excellent at – keep going until you have at least 5 (but the more the merrier).
Step two is “P – What PEOPLE could benefit from you doing the things you ?”
Don’t think of this as the people who are you are currently delivering services to but much much wider. If you are excellent at gardening, who could benefit from someone being excellent at gardening? People with gardens, businesses with gardens, housing associations with open spaces, parks, the National Trust, companies who sell gardening equipment, people who want to develop compost heaps in their garden, colleges looking to train people at gardening, organisations looking for outdoor work placements, nursing homes, sheltered housing, hospitals, etc.
You should be able to come up with AT LEAST 10 groups of people or organisations who could potentially benefit from EACH thing you are excellent at. So now you should have at least 5 things you are excellent at and at least 50 groups of people or organisations that you could benefit.
Step three is “What are the OUTCOMES on the people who are you are doing your excellent thing to?”
So for each group of people or organisations that you have identified, you need to work out the outcome you have on them. Again many people find this really hard as they are so used to describing their processes and being commissioned for their processes.
Let’s take the gardening example again and work through some of the people and organisations we identified earlier:
- What would the outcome be of us providing gardening for people with gardens? Well a neat and tidy garden would be an obvious one. If you worked alongside the people themselves you could also increase their fitness by providing gentle (or vigorous) activity.
- What would the outcome be for businesses with gardens? A more professional image for their organisation might be one. Providing work for local people or local social enterprises could be another (under their corporate social responsibility programme).
- What would the outcome be for housing associations with open spaces? A more professional image could be one. Increased local resident satisfaction could be another. Winning additional contracts (based on their environment and appearance) could be a third. Providing a compost facility (maybe with a food recyclying scheme) could be a fourth.
Now we could go on, but already we have identified the following outcomes that you could achieve. And if this is an area that you are genuinely excellent at, then you could achieve the following outcomes BETTER THAN OTHER ORGANISATIONS CAN:
- a neat and tidy garden
- an increase in fitness by providing gentle (or vigorous) activity.
- a more professional image for a business
- providing work for local people
- a more professional image for a housing association
- increased local resident satisfaction
- additional contracts (based on their environment and appearance
- providing a compost facility (maybe with a food recyclying scheme)
If you work through all 50 people and organisations from step 2, you should now have over 100 possible outcomes that you can deliver.
Step four is “Who would COMMISSION you for these outcomes?”
Now the key here is to work out who would be interested in the outcomes from step 3. Again we will work through some of the gardening examples:
- Who would be interested in paying for a neat and tidy garden? Well the public themselves would be one. Possibly the relatives or carers of elderly people might be another.
- Who would be interested in an increase in fitness by providing gentle (or vigorous) activity? Again the public themselves. Also local general practitioners might be interested. Maybe other organisations such as Age Concern.
- Who would be interested in a more professional image for their business? Business owners could be one. Estate departments might be another. Possibly the local Council.
- Who would be interested in providing work for local people? Local businesses might be interested as well as public sector bodies such as Job centres, New Deal for Communities, local Councils, etc.
- Who might be interested in a more professional image for a housing association? Housing associations would be an obvious one. Perhaps also a national or regional network of housing associations could be interested in providing this for their members.
If step 3 provided over 100 outcomes, you should now have developed over 150 potential customers who would be interested in buying outcomes that you can deliver BETTER THAN YOUR COMPETITORS. These are 150 potential businesses and 150 potential income streams (and possibly several hundred if you are being really creative).
Step five is “H – HOW MUCH would these commissioners pay for these outcomes?”
This is where you have to do some market research and will involve time in the library, time ringing up competitor organisations and time on the web (proper time on the web mind – not levelling up your Night-elf Druid on World of Warcraft!).
Again I will work through a few gardening ones and at this stage you should have 150 to work through:
- What is the going rate to maintain a neat and tidy garden?
- What do people pay to increase their fitness?
- What would GPs pay to keep frail elderly people active?
- What would a local business pay to maintain a professional image?
- What would the local Job centre pay to provide meaningful and sustained employment for someone on long-term benefit?
- What would a local housing association pay to increase resident satisfaction?
Notice that in all of these, you are not selling gardening. If you try and sell gardening then you are limited to daily rates and people focus on the process not the outcome. You are selling a neat and tidy garden, fitness, keeping the elderly active, sustained employment, resident satisfaction, etc. Gardening is simply the route to the outcome but you are selling the outcome. If it is worth £5,000 for someone to be given a sustainable and meaningful job then that is the value of what you do and this is often significantly more than the hourly or daily rate of your process.
So now you should have over 150 potential income streams and the value of each of those income streams.
So what’s next?
Well this is where you sit down as a board, a management group or with your members and decide which of these business you want to explore. You should be able to compete in these because the starting point is your excellence, i.e. what you are better than your competitors at. Which business you choose to move into is as much about your values, your ethos and your mission as it is about income and profits – or at least it should be if you are a social enterprise and now you have a whole heap of possibilities to discuss, debate and mull over (preferably over food and almost definitely with glass or two of wine).