Have you ever wondered which business model is the best?
Before you start a business, you have to consider many things. One of the most important considerations is the business model.
In other words, how are you going to make money?
A business model is for the success of your business. It deals with revenue sources, customers, products/services, and money issues.
If you need an even simpler definition, a business model is about:
How you plan to make money.
Don’t confuse business model with business strategy. Your business model shows how your business runs, but your business strategy shows how you will do better than the competition.
The most important thing to understand about business models is that the great ones share similarities.
As you consider your current business model consider the following:
Answer fundamental questions about your business
Successful business models tell your story. It outlines how your business will work. Your model should answer important questions like:
- Who is your customer?
- What is important to your customer?
- How do we make money?
- How does the business create value?
- How much money will the business charge?
- How do we differentiate our business from the competition?
A business model should be created on purpose. Some companies, even successful ones, stumble upon successful business models. The problem with that is you don’t want to rely on an accident to succeed. You want to succeed consciously.
As you build your business model ask the following questions about your partners:
- Who are your partners?
- What will your partners give you?
- What are expected of your partners?
- How can you help your partners?
What are you making?
Every successful business model should deal with making something. This part deals with R & D and design, acquiring raw materials, manufacturing, product testing, etc.
Chose the right target market for your business
Picking a hot target market is essential to business success. If you want to make more money in your business, you must pinpoint your market with fantastic results. Nothing is as important as identifying your ideal client, so by ensuring that this is taken care of before you start marketing, you can further increase your chances of success.
If you look at all of the products out there in the marketplace, you have to assume that the product was created for a reason. So why were your products produced? Have you ever considered the underlying reason why your products and services were made? If you’ve never thought about it, let’s look at a few reasons why this is important. Here’s reason number 1.
Streamline your marketing
Your goal when marketing to your prospects and customers is to have a systematic approach to getting more sales and turning your prospects into customers. If you want to streamline your business, it’s important that you have automated systems in place that can turn leads into customers, and get your customers to buy from you again.
For example, one such way of streamlining your marketing is with referrals. In your correspondence to your customers, include a short blurb about referring others to your business. Of course, you want this to be on ALL of your correspondence. This strategy is similar to what banks do when you withdraw money from an ATM.
When you get your receipt, on the back of the receipt is an offer of some sort. They get tons of advertising for free using this method. In addition, it boosts their revenue as more and more consumers take advantage of their offer. So when creating a referral marketing campaign, you can state your referral pitch on any of your correspondence.
It could be on the back of your business card, in the footer of all of your direct mail letters, or even on a television ad that you may run. All of these are great ways to streamline your marketing so that you can get the most results. Here’s another reason why you would want to know why your products were created for a reason:
You can enter into a niche immediately
Depending on the kind of product you have and the size of niche that you’re trying to enter into, you can make a nice living immediately without further knowledge of the niche. Yes, products like these do sell themselves, and it’s up to you to offer your product at the right place and time so that you can get sales immediately.
The message here is simple: do your homework. Find out what your prospects want and then offer it to them. You’ll spend less money marketing and earn more by simply knowing what it is that your prospects are looking for. Be sure to use these tips when marketing your products.
Hold webinars demonstrating your expertise
This is an overlooked strategy, but those business owners who find themselves doing this find out that it’s one of the best ways to get customers and clients to be “fans” of their business. The premise of this strategy is sound, and when implemented correctly, it can land you a ton of new customers.
You have a few options here. You can run 20-minute webinars, 40-minute webinars, or even one-hour-long webinars. Make sure that the information that you disclose can improve the lives of your attendees.
At the end of your webinar, hand out your business card to everyone there, and offer a section where people can write down their name and email address – so that you can follow up on them with more helpful information.
If webinars aren’t your thing, there are still more options that you have at your disposal.
Speak to members of the local chamber of commerce
I know of a marketer who could sell their $500 product all by standing up and giving a quick presentation. She made over $3000 that night (on top of the earnings that she regularly makes in her business), and she gained another new customer that she can focus on in your backend marketing campaigns.
The people at the chamber of commerce are looking for ways to make more money in their business. And by you offering your services to them, you demonstrate your expertise even more. This is a great place to team up and gain potential new joint venture partners. I think this is a strategy that is very good when worked in the right way.
These tips for making more money in your business are very helpful. There are many more ways to improve your business income for little or no cost, but I will reserve these topics for another day.
In the meantime, stick to using these strategies to boost your business revenue. You will also want to search online for more ways to make money in your business without spending a lot of money.
Keep an eye on your competition
If you live in a city with a lot of competition, you will want to do everything in your power to make sure you stay ahead of your competitors. If you happen to find out that a rival business owner doesn’t have a website and doesn’t even follow up on the past customers or clients that they’ve had, then it’s time for you to swoop in and gather as much new business as you possibly can.
When doing this, make sure you’re quietly beating your competition. You don’t want to wake a sleeping dog, so let the gentle giant rest while you accumulate all of the profits. Nevertheless, keeping an eye out on your competitors is a smart thing to do – so make sure you follow this principle daily.
If you can know your products well and keep an eye out on your competition, you can stand to have success in your business. Make sure you have a clear-cut strategy for bringing in new leads and prospects and make sure you have a solid plan for converting these prospects into customers. This is essential if you want to have business success.
How are you going to sell it?
Selling is an essential part of a winning business model. Many companies, especially those that fail, think too late about selling.
Your business model should include:
- Identifying your ideal customer
- Finding and reaching your customer
- Closing the sale
- Distributing the product
Highlight your product’s benefits
When selling your products, you will want to make sure that everything that you say about it is benefit-oriented. All this means is that along with talking about the features of your products include more of the benefits so that your prospects will know exactly what they can expect to receive when buying your product.
Identifying all of the benefits of your product will require a deeper understanding of what it is that you’re trying to sell. For example, if you own a massage therapy business and one of your most asked for services is a massage, highlight the benefits of getting a massage and how it can affect (or improve) their overall health. (I’m a big fan of massages, by the way!)
So know your products well. There’s nothing more wasteful than selling a product that you know nothing about. This is where your expertise in your business will come in handy, so make it a point to highlight all of the benefits of your products and make it easy for people to order.
The following are some of the most successful business models:
- Create a marketplace where you bring together buyers and sellers, charging a fee per transaction – Kickstarter, Amazon, eBay, AirBnB
- Package related goods and services – iTunes
- Sell your products to a membership – Costco
- Crowdsourcing – Slideshare, YouTube, Wikipedia
- Fire the middlemen and sell direct to the consumer – Outlet stores
- Sell partial use of the use of something like a hotel room or a jet airplane
- Charge a subscription fee – Netflix, Hulu, Amazon Prime
- Freemium – Dropbox, Gmail, Google Drive, LinkedIn
- Rent instead of buy, lease a car or equipment.
- Decrease price while decreasing service – Aldi
- Pay as you go, treating a service as a utility – Rackspace cloud hosting, Amazon cloud services
- Offer low-margin item to encourage high margin product – printers and cartridges or cell phones and cell phone service
- Reverse auction – Priceline
- Sell the service the product performs – Zipcar
- Offer simplified service at a lower cost – MinuteClinic
- Give paying members access to a network – Angie’s list
How to create value with your products and services?
If you don’t know what marketing is, now is a good time to get acquainted with the term. Marketing is all about creating value and then dropping prices to a point where there is a distinct chasm between the two. Therefore, if you want to sell more of your products and services, you must learn to create value.
And there are times where you will have to create value from out of thin air. One example of this is if you are an information product seller. Information products are simply reports, webinars, books, newsletters… and any type of informational and instructional product of some sort. In this business, there are more than enough opportunities where you can create value for your
But if you own a brick-and-mortar business, how can you create value for your products? It’s simple: bundling. Bundle all of your slow-selling items and offer them at a too good price to pass up. You could also take this bundle and offer it as a bonus with your top-selling products. Many business owners find themselves selling products that they wouldn’t normally sell if they didn’t create the bundle.
It doesn’t matter what type of business you’re in; you can always create value for your customers. A good bundle and bonus offer can incite on-lookers who wouldn’t have normally bought your products.
So now, let’s talk about how to put together a marketing strategy for your business. The absolute immediate thing you will want to do is focus more of your marketing efforts on your current customers and clients. This is called backend selling. Backend selling simply means that you’re selling to your existing clients and that you don’t have to incur a customer acquisition cost when marketing to these groups of people.
If you’re not selling more of your products to your existing customers, you’re making a huge mistake. 80% of your business profits will come from sales from this group of people. Eventually, you want to become so good in your business that you’ll want to know how much each new customer is worth to you.
I know of some marketers whose lifetime customer value is somewhere in the $5,000 range. So if on average, a typical customer is worth $5,000 to you, you can afford to go negative on the initial sale because this one customer can potentially be worth thousands of dollars to you. So I always make it a point to focus on selling to my existing customers, and I suggest you do the same.
Hopefully, you’re using various marketing and selling techniques to get the word out about your business. If you’re not, then I think you’re making a mistake. Let your ads and other marketing pieces run on autopilot. Instead, focus more on getting referrals from your customers and be there for help if they need you. This is your profit center, so treat this group of people like gold.