This month, I’m talking all about business models, particularly what they are and why you need them!
Basically, your business model (or revenue model) is a roadmap for how your business will make money. In other words, what are people buying from you? Your customers have to pay you for something. Without paying customers, you don’t have a business; you have a hobby.
This sounds incredibly basic! But all too often, I will hear: “I want to start a community to empower women,” or, “I want to curate creative material online.” When I ask them how they plan to make money from these ideas, they’re not sure. Yes, you can absolutely create a blog or community or a movement, but it wouldn’t be a business until you have people paying for it. A business sells things (like a product or service) to customers in exchange for money.
If you want to build a profitable, sustainable business that you can rely on for income, you must be absolutely clear on what people are buying from you.
Here are some simple and straightforward explanations of what can be purchased from you.
Most businesses sell products or services, or a combination of both.
For example, if you sell jewelry or oils or clothing or wine, you’ve got a product-based business. You deliver a physical product and your customer pays you. Conversely, if you are a coach, yoga teacher, hair stylist, or photographer, you’ve got a service-based business. You deliver a service and your client pays you.
But let’s say you make money offering training or advice, you may have a mix of service and product offerings, such as one-on-one consulting (service) and digital programs (product).
Or perhaps you fall under other categories. Maybe you’re a blogger, and you make money through advertising for companies. Or maybe you’ve created a software, and companies pay you monthly for technology use and support.
So, how will your business make you money?