In business when do you know it's time to reinvent or change your business model? You don't want to get so out of control that whatever needs to be changed becomes insurmountable and spirals out of control. Some people believe the economy drives business success, and while that is true to some extent, reality is a business owner's ability to change and be flexible to outside is influences is the greater driver of success in any economic environment.
Business leaders must stay one step ahead of potential influences and be ready to shift. Now this gets back to the first question, but when do you know and how do you forge ahead? It's something that you use my millimeter approach for both facets. As a business owner you are aware of the financials (and if you're not then you should be). It's prudent to keep your eyes pealed to small, but long-term shifts in your customers' buying trends. If one area of the business is growing, but another area is shrinking then put your focus on the growth area and continue what you're doing.
In the meantime, look at the area that is shrinking. Ask yourself why? That is the first small step toward either dropping the service and focusing exclusively on your growth area or starting to pull apart what is driving the drop in business and changing it it .... slowly. Again, using my millimeter approach you will want to brainstorm and try small things first. For example, if widget sales dropped, then maybe you need to do small promotions in that area. Don't spend a lot of money on marketing materials, but rather spend a little money and see if that solves the problem. Spend no more than a month trying your new effort and then re-examine the sales. Are they increasing? Keep going. BUT (and this is huge) if the other facet of the business is eclipsing the shrinking sales, it's time to examine it.
And this is where reinvention comes into play. If the increase in sales in the other area continues, you are without trying reinventing in that direction. And that is what automatically changes your business model and keeps your business afloat. And it wasn't a dramatic reinvention either. It was millimeter because you just kept an eye on it and kept doing what you were doing. Any change whether or small or big doesn't have to done dramatically or overnight. It's about flexibility and constant attention to details. And those details drive decisions and decision drive direction and direction drives business models.