How to Choose the Right Business Model
- A temporary pivot to online working
- A push to finally do something they’ve been putting off
- A realisation that their current business model puts them at risk
This is where your business model becomes particularly relevant, and so I’m sharing an adaptation of an article I wrote last year where I talked about something that I actually got wrong myself in my first few years of business… and that’s your business model.
Watch the video below or scroll down to read more.
Here are those 3 motivations again:
1. A temporary pivot to online working
One of the things I talked about during a live session for my members yesterday evening is why it’s important not to make the mistake of believing that working from home automatically has to equate to creating an “online business” with online programmes and online marketing. For many business owners in my community, when this period is over they will return to their highly successful fully offline businesses – so they don’t need to become online marketers or create online programmes to survive this period – they just need to shift the activity they’ve been doing offline, and do it from their computer and phone for a period of time.
2. A push to do something they’ve been putting off
An example of this is a client who has wanted to create an online programme and membership for ages, and is likely to be hugely successful in this because she’s got a great niche in a very large global market. Yet her offline 1-2-1 work has kept her so busy she hasn’t been able to give much attention to developing this online business. So for her this situation represents the perfect opportunity to knuckle down and get her online presence in place, and create and launch her first online course!
3. A realisation that their business model puts them at risk
I’m hugely fortunate in the current situation that I have a “recurring revenue” business model. This isn’t because of any grand or sensible plan to protect myself from a global pandemic – it’s simply because 3 years ago I followed my heart and decided to give up a highly profitable business model to create a low monthly investment membership. I talked about my decision to do that in this blog. Many small business owners had a big scare when their revenue dried up completely in the first couple of weeks of “lockdown”, and even though most are seeing things stabilise again now that we are settled into our “new normal” it was enough to make them realise that their business model put them at risk of the “unpredictable”.
Now of course even a recurring revenue model is not immune to economic downturns – I’ve definitely had a few more cancellation requests than normal in the past few weeks. And an online business would have been no protection at all if it had been a computer virus and not a human one that knocked us all for six!
But there IS a certain amount of protection from a recurring revenue model, because even if some customers decide to tighten their belts and cancel their payments, if you are offering something of genuine value most won’t – and if you have a low-cost membership you might even find that more people than ever join you in order to get your help and support in a more affordable way.
Here’s the article I wrote about business models last year. In that context I talked about the importance of creating a business you love – not just one that the gurus tell you you “should” create – but it’s just as relevant in the current situation.
Understanding business models
Not many people who are teaching business talk about choosing the right business model for you. Most are pitching their own model and teaching the one that worked for them. That’s fine – we’d rather people teach us what they know – but the thing is, what’s right for one person isn’t necessarily right for everyone. So you can end up with a business model you think you should have rather than what’s best for you.
You could find yourself building a business that’s actually really successful on paper but that you don’t enjoy running as much as you thought you would.
That’s exactly what happened to me.
When I first started in business it just so happened that my first three major role models – who included my first two business mentors – ran what I would call a “live event model” combined with a “high-ticket” model. This meant that they mainly used live events to get their clients and they used those events to sell people into their main programme, which was usually priced between £5,000 – £25,000 per person.
At that time I had an online programme – Get More Clients Saying Yes! – that got great results and I was really passionate about delivering. I desperately wanted to reach more people with this course, but my mentors told me that if I actually wanted to make any money in my business, then I had to have a high end offering.
So of course that’s what I did. Very early on I introduced a mentoring programme that I ran for four years, which people could join for £5,000-£10,000.
And those mentors were absolutely right – I made money and I very quickly had a six-figure business.
But they were also wrong. Because much as I loved the wonderful people I worked with in that high-ticket programme, something felt off. Part of what felt off was that I was putting off my bigger dream and passion of getting my online programme out much more widely in order to do what I was told “works.”
It was only later that I came across a different set of role models – this time in the online space. people like Amy Porterfield, Marie Forleo and Denise Duffield-Thomas. Women just like me, selling online programmes just like mine – but in their case turning over millions of dollars a year doing it!
I realised that I could have done it this way after all. If I’d just understood the different business models and found the right people to teach me.
Maybe you’ve got caught up in all the noise online and have come to believe that the only way for your business to be successful is to create an online programme, so you are making yourself miserable creating modules and growing your social media platform. But actually all you really want to do, and what really makes you happy and fulfilled, is working with clients one-to-one, maybe even in person or at your own clinic or therapy room?
Or maybe you’ve been told that the only way to make your business work is to do live events, or to get your clients from live speaking? But live events exhaust and drain you, and you are never happier than when you are curled up in your pyjamas at home interacting with people all over the world online.
Because the thing is that all the business models work!
And they all don’t work.
You see, the one that will work for you is the one that you absolutely love to run, that lights you up, where you feel in flow, where you rarely feel drained or ask yourself how much longer you can keep this up.
And a business you can fall in love and stay in love with for 5, 10 or 15 years doing what you love is far more valuable than a few peak successes that you can’t maintain.
So, what other sort of business models are there?
Well, this isn’t a definitive guide, but here are some examples:
This is where you will choose to work one-to-one with clients, intensively, using your gifts and talents. It might be coaching, it might be consulting type work, it might be transformational therapy. This is a 100% viable business model, and don’t ever let anyone tell you it’s not. If that’s what you feel called to do, just get help from somebody who knows what they’re doing who can help you structure it and get it working for you. And unless the work you do is fully hands-on e.g. acupuncture or massage, you can choose to work with people one-to-one offline in person, or online over zoom or skype.
The next level would be to take that and move into what I call high-end or high-ticket group programmes. This could be masterminds, mentoring, or year-long transformational programmes. It might involve high numbers but the beauty of this model is that you don’t need high numbers to really make this work. When I ran mine, I would do above six figures and above just from having about 20 people a year in that programme. In my case my “high-ticket” had a lot of live “in the room” masterclasses included, but a high-ticket offer can also be fully online.
A similar model is the retreat model. Maybe you would love to run retreats and take people to exotic locations away from their everyday lives and do some really intensive work. A retreat model might involve you selling a programme that includes say three or four retreats a year, and in between there are online elements to keep people connected. A retreat model is generally an offline model – but some people run “virtual retreats” perfectly successfully – it’s just different!
A typical version of the live event model would be selling a one day training or event at a very accessible price, but using that one day event to sell something like a three-day training at a much higher price point, or even a series of live trainings. Or you might use that live event to sell your high-end group programme. As we are seeing during the current pandemic, many people with live event models are successfully taking these events and running them online. Of course it’s not quite the same, but an event model can be online.
In the early stages of business when you haven’t yet built up your following, you might not be able to fill a really large event, so a workshop model will feel easier. With a workshop model you’re not talking about filling the Alexandra Palace, you just need a few people to come to your workshops and use those workshops to sell your next step, which might well be your one-to-one service or programme. When you’ve mastered the art of making an offer for the next step you don’t need more than a handful of people at each workshop for it to be profitbable. Again, your workshops can take place offline – or online.
Online Courses and Programmes
A typical online programme, is a group programme, where you deliver your training modules, and then you offer interactive elements like group coaching calls, or Q&A calls, and very often a Facebook group, to support people as they work through your programme and help them get results.
It sounds glamorous. You can reach a lot of people at the same time all over the world, and a lot of people feel really called to that – myself included. It’s also scalable in that you can work with large numbers of people at one time. But it can also be lonely and isolating and it doesn’t suit everybody. If you’re a real people person, and you like to be around people, you might find that a fully online model, where you’re spending a lot of time at home predominantly working through your computer in the way that I do, might not be a model that really makes you happy.
Digital Products and Courses
Then we’ve got things like digital products and courses but this time where you sell the course on it’s own, without any extra support and people follow it as a home study. This model is often touted as the holy grail of the passive income: have a digital product, and you don’t ever have to do any work again, you can just sit back and sip your cocktail and watch the money pop in (it’s actually not quite as easy as that because you still have to do the marketing!).
I did this for a year and I sold my programme as home study only. For me personally, it was not a fulfilling way to run a business. I really missed having the connection with my students. I really missed being able to speak to them and answer their questions, and guide and help them to get the support they wanted, so I realised very quickly that a business model without contact with my customers is not for me.
Then you’ve the got the Membership Model. There are lots of different ways of setting up a membership, but what they have in common is that they are typically designed to be accessible for large numbers of people at once, but at a low monthly investment (though high-priced memberships are a “thing” too). It’s normally a monthly fee, although you can have annual memberships as well. The advantage of a membership is that you can have lots of people benefit from your work at the same time, and the price point makes it accessible for more people to join you.
Another advantage of a membership model is it’s that it gives you recurring income. Because your members are paying you monthly it means you have a predictable income coming in month. So it’s really powerful if you feel like you want to get off the income roller coaster, because even if you’re selling an online programme, which is what I’ve always done, you can find that your income comes in peaks, just a couple of times a year, and there’s not much in between while you’re focused on your marketing. As it turns out, recurring revenue is also a great safety net during a global pandemic!
Training and Consulting
Those of you who might be selling to the corporate market or organisations, might follow a training and consulting model where you go into a company, deliver some training for a team. Then off the back of that you can do some one-to-one executive coaching with some of the senior members of the team. You might even put together a six or a nine month programme to support that team to include regular one day trainings with some group coaching in between.
This type of work has traditionally taken place offline, but I think we will see a big shift to companies being a lot more open to doing this type of work fully online once the pandemic is over now they’ve experienced how effective it can be.
Franchising and Licensing
Maybe you’ve created your own unique methodology or system that you take clients through, and now you want to be able to expand, but you don’t want it to be you that actually does the work with the clients. In this case you could set up a franchise model, or licensing model where you’re training other people to deliver your programme and taking a license or franchise fee.
Combining Business Models
There are so many more business models, these are just a few examples to give you an idea.
You might also have a combination. So in the first five and a half years I was in business, my business model was an online programme that I launched once a year. Then the people who did that course would come to a one day live event, and at the live event I would sell a 12-month business mentoring programme at the high ticket price point. So I had a combination of online programme, live event, and high ticket models.
Like I said earlier on, it worked financially and on paper my business was successful, but it wasn’t – somehow – as fulfilling for me as I had imagined it would be. In the past couple of years I’ve had a complete switch in business model.
My Current Business Model
I still run the online programme, Get More Clients Saying Yes! once a year. It gets people great results, I love running it, and I’m really passionate about reaching people with it. But the next step beyond that, instead of being a high ticket programme that starts at £5,000, is a monthly, very low investment Membership programme, where I provide all the same support that I used to provide for £5,000 but this time it’s designed to be accessible even for people who are in the very early stages of business, many of whom wouldn’t otherwise be able to afford to get that sort of support with their business.
This works beautifully for me, because I know that I’m able to reach many more people, and that anyone who values my approach and wants to get advice and help from me can afford to do that. So it sits well with my values and with my desire to make my training and mentoring more accessible.
Want to learn more about the Membership Model?
And if you’re curious to know if the Membership Model specifically could be right for you too, then my own mentor Stu McLaren has put together a free guide to getting started with a Membership. If you download the guide Stu will also be providing a lot of valuable fee information over the next few weeks, in the lead up to the annual opening of his membership course – Tribe (this is the course that I took before I launched my membership).
You can download the Membership Guide here: www.catherinewatkin.com/membership-guide.
*This is an affiliate link. If you download Stu’s guide through my link and later buy his course I may receive a payment.
With Love & Gratitude,