How do you choose the best business model while creating world-changing impact?
Let’s start with what you sell, such as…
- Packaging your Time as a service that you bill for hourly or monthly.
- Turning your skill into Classes or Memberships to serve many people at once.
- Building a lot of email subscribers in order to sell Information Products or Advertising.
- Manufacturing a digital or physical Product.
- Soliciting Donations for a cause. [Jen has a nonprofit around ending factory farming.]
Usually, your area of expertise for making an impact will fit into one of these categories. Each has its own unique business model:
If you sell Time, your business model is a Consulting Agency.
If you sell Classes or Memberships, your business model is Coaching + Training.
If you sell Community, your business model is a Membership Network.
If you sell Advertising, your business model is a Media Platform.
If you sell Products, your business model is E-Commerce.
If you deliver Social Services, your business model is Non-Profit.
Of course, each business model has its own risks and opportunities that you should weigh as well. Let’s take a moment to talk about each.
The Consulting Agency Model~
Costs & Risks: You’re limited by how much time you can sell monthly and how much people will pay for your time.
Benefits & Opportunities: In the beginning, there’s almost zero money required and over time you can increase your rates or hire subcontractors or employees and charge clients for their time.
The Coaching + Training Model~
Costs & Risks: You need to have a curriculum, an engaged audience to market to and a digital sales funnel. And of course you’ll have to prove you are *the* expert they want to learn from.
Benefits & Opportunities: Your only major investment outside of developing your curriculum is the cost of building a big-enough audience to market your classes.
The Membership Network Model~
Costs & Risks: Echo! Ditto! Anybody here? For members to experience the benefit of community, you need a sizeable number of members already in the community! The skill and cost of reaching a critical mass does have a learning curve.
Benefits & Opportunities: Repeat revenue is the BEST business model when you can make it work.
The Media Platform Model~
Costs & Risks: To make any advertising model work, you need a LOT of “eyeballs.” Building traffic and subscribers can be very costly until you’re big enough to sell advertising or deliver affiliate campaigns. You’ll also be competing with Facebook and Google since they dominate ad spend online.
Benefits & Opportunities: Once you figure out a massive niche and great ad spend category, you have the opportunity to generate income by consistently publishing content that brings you joy. There are different ways to monetize impressions, from ad buys, sponsorships, events, affiliate programs, and joint ventures.
The E-Commerce Model~
Costs & Risks: Competition can be fierce and the cost of creating your product can really cut into your profit. In addition, the upfront investment for platform development, building up inventory, setting up systems, and building a superstar brand can be quite extensive, so research is key prior to launch.
Benefits & Opportunities: Unlike consulting or coaching, you are not the product. In most cases, this is seen as positive because the business won’t need you forever to scale. While this business model has the largest outlay of capital, it can also be the most lucrative when it scales.
And there you have it, friend! We believe in you and your cause and hope this has given you some clarity in moving forward with your impactful business.