What model are you?
If you are building a new business or revamping an existing product or service a great place to start is by getting super clear on your business model.
Landing your next 5 clients will be much easier when you nail down this part. Like lots of things, it's simple once you know how.
What is a business model? The Google dictionary says:
a design for the successful operation of a business, identifying revenue sources, customer base, products, and details of financing.
It's the how to answer to the “what do you do” question. It's how you fulfill your purpose.
You probably know this intuitively but you may not have ever put it in an outline or document that explains it. That's okay. This is part of a business plan that's just for your eyes or to be shared with investors and possibly employees.
Here are a few key questions that will help you identify your model and expand your revenue sources in 2017.
Are you B2B (business to business) or B2C? (business to consumer)?
Some companies are both (Microsoft for example) which is okay but know that the messaging, pricing and marketing strategies will be different for each.
Are you service-based or product-based?
Again, some may be both like my friend Angela Jia Kim (spa services and skin care products) or Meredith Liepelt who has a hybrid style. She's service based with some products. Often, she sells a product (a course for example) with a service option to enhance the experience.
Is your business a brick and mortar or are you online based?
It's possible to be both, but usually one is your go-to (like my dentist) who sells a few related products that I could buy online instead of going into the office.
Are you offering an experience?
Many service-based businesses excel because they provide consumers (and businesses) with a high-touch delivery of services. Think spas, luxury travel, personal chef etc.
Is revenue one-time or recurring?
This may seem like a trick question so I'll explain. I build websites and I consider it a one-time transaction. Clients do come back and have me build additional sites but that's a new transaction.
Recurring revenue is when my clients pay a recurring fee for me to help them each month with updates etc. It's a specific amount for an agreed upon time frame. It could be monthly, quarterly or annually in my business.
Some recurring revenue options are open-ended. Think Netflix where you can cancel anytime and they'll provide access as long as your payment clears.
If you are product based, are you selling a tangible product that I can hold or an intangible product?
Most products are tangible but with streaming, digital downloads, e-books, etc. the line is blurred a bit. I consider a book (electronic or paper) a product. Same with a course that's delivered online. The distinction isn't as critical as making sure you understand the marketing differences.
These questions will help you gain clarity around your business model.
- Where are the gaps?
- Can you add a recurring service?
- If you are product based is there a service that you can add to increase revenue and retention?
- How can you expand?
What questions do you have? Please feel free to email me with questions or schedule an appointment to talk with me.
Here’s to your next 5 (and the next 5 and the next 5), new clients!
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