And it ultimately needs to be grounded and structured so it can manifest in the world.
In natural business terms, it needs ROOTS.
Just like a seed roots into the earth to provide the structure for the seed to grow into a big beautiful tree, your business model provides the structure for your vision to grow into a big beautiful business (or a small one, whatever you like).
But people get tripped up on this whole business model thing.
And yet, it’s SOOO important. And many people have been in business for years don’t know what their business model is (don’t be ashamed, you’re not alone!).
So I’d like to break it down for you (I promise, it’s way simpler than you think).
Ok, so here’s the big news:
A business model is a fancy way of saying how you make money in your business.
That’s really it. What are the various offerings and products you sell that bring revenue streams into your business and how are they designed?
But let’s expand and give some examples, because there are endless ways to do this, and you need to use/modify/combine/create one that fits your natural gifts, abilities, desires, your industry, and that will also work for your clients’ needs.
Here are some business model examples:
- You can sell something inexpensive to a lot of people, like an online course or physical product.
- You can sell something more expensive to just a few people, like one-on-one coaching services.
- You can create group programs that lead to one-on-one services, or one-on-one services that lead to high-level groups.
- You can create one high-level group program designed to be your main source of income.
- You can give away all the basics for free and charge for only one thing (this is how many online companies work, like Mailchimp… it’s free up until you get to 1000 people on your list, then you pay).
- You can sell individual sessions (thought you might get exhausted and reach your income ceiling pretty quickly).
- You can sell specific packages or programs with multiple sessions and deliverables over time.
- You can design proposals specifically for each client (classic consultant model).
- You can sell ads or sponsorships on your website or at conferences.
- You can design a membership club where people pay monthly to belong.
- You can sell programs from your retreat or a retreat from your programs. Or you can just run retreats that earn lots of revenue.
- You can hire assistants to do some of your work so you can do more high-level client work.
- You can hire and train staff to deliver your programs for you.
- You can develop a training course in your methodology, teach it to other people and charge certification and/or licensing fees (think yoga teacher training or coaching certification program).
- You can rent out space in your office to bring in more revenue.
- You can promote other people’s work or products and receive an affiliate bonus or commission.
- You can sell products related to your service (think herbalist selling herbal formulas or essential oils), or services related to using your products.
Phew. That was a lot. My point is, there are options. And… it’s important to be very thoughtful about what you choose and why.
Because you can really use any combination of the above models to achieve your financial goals.
BUT… I will always tell you to KISS: Keep It Simple Sweetheart, especially in the early stages.
As your business grows, it can make sense to have more revenue sources and diversify your business. (It doesn’t have to though).
The bottom line is to choose something that works for your business and your life, design it simply at first, do it until you’ve got it dialed in and it’s working, and then add more.
For example, my business model my entire first year of business was selling one 6-month coaching program. Now I have a retreat, a group program and a home study course I’ve added on over the years, but only after my income was stable and I had 1-1 clients flowing in without much effort (in other words, I had a marketing system in place that worked!).
I thoughtfully added additional pieces to my model because I enjoyed them (I love working with groups), because they seem to be an effective way of delivering what I want to offer, and because they earn more money for my business with less of my time spent on them.
And… I’m always tweaking it. This, like everything in business, is evolutionary, organic and iterative. We try things, see how they work, adapt and evolve.
I am now moving toward having one main group program, instead of multiple smaller programs. But would I have started this way? No! In the early stages of business when you have little to no following (or experience working with your most ideal clients), filling a higher-cost group program is super challenging (simply put, you need a lot more people to know about you to get 10 people to start a program on the same day than to sign individuals up to 1-1 work that can happen anytime).
A word on passive vs leveraged income
In the coaching/healing/consulting world, there’s a lot of hype about it, but there’s not a lot that is PURE passive income. Anything that you sell over time takes a lot of resources to create, market and sell. And you always need to be maintaining the delivery system and updating the product itself.
It’s easy to get caught up in wanting to have lots of passive income, but for most folks, it’s best to start with LEVERAGED income.
An example of leveraged income is creating group programs where you can serve many people at once while making the same or more money for a similar time contribution on your part.
Selling a successful online course that actually earns you money requires a very high-level sales funnel, hiring people to help you, plus lots of time and technology to create the funnel and grow a BIG list of people. Not that it’s impossible!! Just know, it’s not that simple.
Figure out what will actually work for you
There are a lot of cookie-cutter, 6 steps to financial freedom processes out there… “Do this exact business model, and you can make 6-figures in 3 months, just like I did.”
Problem is that the cookie cutters rarely work because we’re all quite different, and who knows who these people are and what kind of resources or skills they started with.
So, we need to learn about the possible business models out there and then craft our own based on that. One that works for US.
If you want to work Tuesday-Thursday from 11-5 only while still earning more than 100K/year, then you need to design a business model that supports that (PS, it’s possible, I do it!).
If I can impart one thing…
Intentionally designing your business model and mapping out your revenue plan is important and too o.
So is designing how exactly your people are going to find your wonderful offering and buy it from you (that is known as the client pathway or sales funnel and involves your marketing strategy as well as your offerings).
Selling a bunch of different things with no plan and no sense as to how they contribute to your overall financial goals, and/or having too many marketing strategies going at once will have you spinning your wheels and possibly burning out.
So create something simple. The simpler your business model, the easier it is to bring in more money, more easefully, in your business.
If you keep adding new programs, designing, creating, marketing new things all the time, you’ll likely get worn out. And that’s not what we’re going for here!
I know, us creative folk are like, “but I have to!”
Sit with it… it’s possible to be creative and experimental in your business without going crazy and producing too much. It’s all about prioritizing (but that’s the topic of another post!).
There are two ways I can support you to get super clear on your business model and make a plan to create what you want in your business with more ease:
Come to the (already more than half-full!) Replenish Winter Reflection & Strategy Retreat for Women Entrepreneurs this January: The “earliest” bird deal is over, but the next three folks who sign up get $150 off the program investment. You just need to email me for the discount code (and happy to answer any questions in the process to make sure it’s the best fit!).
Consider private coaching… I have one spot left for a private client this year.