Today we’re taking a look at your business model, and whether it supports the lifestyle you want. Or not.
If you’re anything like me, you started your business without much of a business plan… and no idea what business models you’d be putting in place.
Maybe you looked around at other successful entrepreneurs and decided to price your offerings based on their prices and packages.
You might have seen other people doing product launches, having pay what you can sales, or creating monthly membership programs… and decided that if it was good enough for that well known entrepreneur, it was good enough for you.
But here’s the problem: you’re trying to build the inside of your business using the outside of someone else’s business.
Look At Your Business Model
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Under The Hood Of Other Businesses
What you might not know is the behind the scenes details of another person’s business model:
- That product launch has been 12 months in the making, and the business owner had dozens of heavy hitting affiliates on board… so they were able to sell thousands of spots for a lower price and make it profitable.
- The pay what you can sale might not be motivated by profit, but rather it’s a way to reach a bigger audience and support those who can’t afford the regularly priced offerings.
- The monthly membership model only works because that business has tens of thousands of subscribers, which can cover customer support costs and content creation costs.
And these are just examples of the misconceptions that happen when you try to emulate successful people’s business models… when you start to take business hints from peers or those who are just getting started, you might make even more mistakes.
The way I see it, every entrepreneur has a similar journey…
You start out as an employee and having 1 big client, to being a solopreneur where you have a few medium (high paying) clients. Once you’ve done that successfully, you can move into the true entrepreneurial realm and help more people at smaller price points.
The question becomes: how can you move from one side of the spectrum to the other and help more people by shifting your business model?
Shifting Your Business Model Over Time
It seems counterintuitive that you’d want to reduce your prices as you progress in business, but you need to charge more when you’re getting started because you have fewer clients and you can also provide more services to each one.
As your client roster fills up, you can then change the nature of your offerings away from 1-1 services to more leveraged products and programs. You don’t have to take this route, but if it suits the goals you’ve set for yourself, it’s a great way to increase your business’ growth potential.
This doesn’t mean that you lower your prices so much that you’re competing with Wal-Mart… you can still charge premium prices, but the more ways you can help more people, the more money you will make based on the value that you’re putting out there.
Think of Kindle books that cost just a few dollars, but can have mass appeal and sell really well.
As your business model continues to shift away from 1-1 services, you’ll notice that your business requires different things of you.
Instead of focusing on delivering your service, you’ll be focusing on expanding your reach to make more sales of your existing products. You’ll be putting systems in place, hiring people, and creating your next offerings.
What business model questions do you have?
Leave a comment below!