7 Profitable Business Models…and How to Decide Which One is Right for You
Over the past 10 years, I’ve tried my hand at several different business models. Most of them have been successful, but there have been some struggles and failures along the way. And from these successes and failures, I’ve learned some valuable lessons that I’d like to share with you. I hope these lessons help you focus your thinking on what the best business models are for you.
The great thing about all of these business models is that you can choose virtually any market, and use the Ask Method with ANY of these business models successfully. More about how to do that in just a moment.
All of these models WORK. They’re all proven models, with many many examples of success stories for each and every one. The key here is to choose the models that fit with you and your business: your strengths, your personality, and your team.
If you’re adding a new division to your current business, wondering if the model you’re in right now is the best one for you, or looking to escape your day job and come up with a plan, then reading this will help you weigh the pros and cons of each model.
Because not every every business model is one that you should pursue. Just because you could launch a continuity program or an agency…doesn’t mean that you should.
Before you try a new business model, consider your personality type, what your strengths are, and what you naturally enjoy. If you’ve taken the KOLBE assessment or the StrengthsFinder test, you’ll have a pretty good idea of what these are. Use them to guide your decision-making process.
So without further ado, let’s get into the different business models right now.
Business Model #1: Creating Information Products
Why Choose this Model?
The profit margins: Creating and selling information products, online courses, ebooks, and other education/information products have very high profit margins.
You create something once, and if it’s a digital product then you have no need to stock inventory, and you can deliver it automatically to any volume of people at once.
While a physical product that you sell for $100 but costs you $15 leaves $85 in your pocket, an online information product that you sell for the same price will leave $100 in your pocket.
Creating a digital information product is a low-cost way to get something started, and very easy to scale up from there.
3 Lessons Learned:
1. Not everyone enjoys the creative process. If you choose this model, you should really enjoy what goes into creating a product.
2. When you’re thinking about your market, be sure that you choose evergreen topics as much as possible, so that you don’t have to update your product as frequently. For example, the orchid market vs. something like Google Adwords, where the rules are constantly changing.
3. Be sure that the support for your product is either a separate product, or priced accordingly in the program, otherwise you’ll enter the “black hole of customer service” with endless time-consuming emails.
Business Model #2: Promoting Affiliate Offers
Why Choose this Model?
Promoting products as an affiliate means that you don’t have to actually create the products that you promote…all you have to do is focus on selling.
Sounds easy, right?
The crucial thing with this business model is choosing the right markets to find the right products that are proven to sell.
Being an affiliate allows you to leverage the credibility and the authority of the product owners by association (if you choose right).
For example, we partner with JV affiliates to promote our flagship product, the Ask Method Masterclass.
3 Lessons Learned:
1. While it’s convenient not to have to worry about creating products, it’s actually VERY difficult to build a business without at least one core product. Ideally, a combination of your own products as well as affiliates’ will give you the best of both worlds.
2. As an affiliate, you don’t control the payment timing, which means that you can often find yourself in the money chasing business.
Look for things like a 7 day fast pay of 75% with 25% paid after refund period, which is a good indication that you can expect reliable payments. But you still need to trust whoever’s paying you. I know this from experience after being burned a few times, which is why we ALWAYS pay on time.
3. When choosing affiliate offers, you always want to make them relevant to WHY people follow you in the first place. For example, we did a promotion with Jonathan Mizel, who teaches how to get traffic using rented email lists.
This strategy is ideal for people who want to run a Deep Dive Survey but have no list…so we set up a trial campaign using Jonathan’s method and ran a Deep Dive Survey, and then showed the case study during the promotion.
This ended up being one of our most successful promotions to date, and a lot of it had to do with the fact that the offer was a great fit, and directly relevant to what I teach.
Business Model #3: Selling Software
Why Choose this Model?
Software is great because it’s got a huge potential for recurring revenue. Once people start using a certain software they tend to stay with it, because it’s a lot of work to switch everything over, which gives you a high stick rate.
3 Lessons Learned:
1. My first software business was a WordPress plugin for Survey Funnels. With WordPress, you have multiple versions, plugin conflicts, and you have to constantly update to keep up with changes to WordPress.
2. While it’s relatively easy to build something like a WordPress plugin, if you want steady revenue coming from your software you should fully control the environment and development so that you can adapt and make changes as needed.
3. There are always going to be customer service issues with software. If you’re working with someone else, then those customer service issues are outside your control.
As I develop a new software to implement the Ask Method, I understand more and more how important it is to have full control over the process and the environment.
Business Model #4: Launching a Continuity Program
Why Choose this Model?
A continuity program gives you predictable, recurring revenue. It’s a very reliable form of income, and allows you to plan and manage your business expenses based on that. Unlike a launch, which gives you a fast influx of cash, with continuity programs you can anticipate growth and decline, and plan accordingly.
3 Lessons Learned:
1. Continuity programs aren’t right for every market. For “enthusiast” markets, like gardening, or my own Next Level Group Mastermind for business owners, it’s a great fit, assuming that you have…
2. Never ending content creation. With a membership program, you should constantly be adding resources and content, so that your members are always getting something new, and additional value, for the same price.
3. People are naturally less willing to sign up for open-ended continuity. While that might work for some markets, for others you may be better off with a fixed-term program, such as a 6 or 12 month membership…or positioning the open-ended continuity as a “VIP” option.
Business Model #5: Hosting Paid Live Events
Why Choose this Model?
There’s nothing like a live event. The atmosphere, the vibe, whatever you want to call it is totally different from anything online. A live event lets you deliver transformation, and it also gives you the perfect opportunity to upsell people into a longer commitment to working with you, whether it’s coaching or a higher-level mastermind.
Live events are also GREAT for capturing testimonials, because people are there, you already have the video crew, and the energy from the event means that people will say great things about you.
3 Lessons Learned:
1. Putting on live events is not as easy as it looks. It’s actually pretty time consuming, especially if you want to deliver a premium experience. Plan for the fact that planning live events is a lot of work
2. When you put a lot of thought into the experience that people are getting at the event, it shows. The first few events I did, we just went with the hotel menu, nothing special. And we got NO compliments on the food. But when we sat down with the executive chef and hand-picked every menu element ourselves, everyone commented.
The gifts that you give at the event will mean a lot to people, so choose wisely. The goal at a live event is to make people feel special and to deliver lots of value not just with the content of the event, but with the overall experience.
3. While it can be tempting to want to change venues and cities and keep things exciting, you want to stick to the same location as much as possible. This way, you already know the staff, you have more leverage to get what you want, and you have a relationship with the managers and vendors, rather than starting from scratch every time.
Business Model #6: Private Consulting (With or Without Revenue Share)
Why Choose this Model?
When you do coaching or consulting, people are paying a premium for your time and expertise. Working with someone one-on-one is the best way to get them results. And happy clients mean more referrals and testimonials.
Not only is consulting a great way to build your reputation before launching something else, it’s also the perfect opportunity for rev share/royalty deals.
When I started as a consultant, walking people through how to build Survey Funnels, every deal I made included a revenue share, so that they knew that I had skin in the game, and wanted to make their funnel a home run.
And if you know the Ask Method, you can do the same thing.
3 Lessons Learned:
1. Protect your time. When I take on a new client, it’s with a monthly retainer and an agreement setting the boundaries of our relationship.
2. Here are the rules for working with me: all discussions are by phone (not email), and 48 hours before our call you should be sending me a one-page document with what we’re talking about so that I can review, be prepared, and make the most of that time. Not only does this make me a more effective coach, it also helps the client nail down their priorities and get more done.
3. When setting up royalty agreements, define the boundaries clearly: for specific funnel(s) only. Also be sure to use an automatic payment system like Stripe or Clickbank to get paid.
Business Model #7: Done for You Agency Services
Why Choose this Model?
This is what people want! Come on, who doesn’t want a done for you service? It’s super easy to sell, and there’s a ton of demand right now for DFY (done for you) agency services.
3 Lessons Learned:
1. Get deposits in advance to build a pipeline of people who have already committed to work with you.
2. Know how long it will take you to complete each project. Put a team in place that you can rely on, led by someone who can manage all aspects of the project.
3. Agency services, depending on what they are, tend to have a higher cost than information publishing or consulting. While that means you can charge a higher premium, it also means doing a careful cost-benefit analysis to see if this is the best model for you.
When I made the decision to stop offering agency services, despite a huge demand, I shifted my focus to becoming a world class education business instead, teaching people to execute the Ask Method through the Ask Method Masterclass.
Now it’s your turn to sound off: what business model(s) do you use? Which ones work best for you, which ones didn’t work, and why?
Let me know by leaving a comment below.
All my best,
Ryan 🙂
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