I asked people the other day who they modeled their business after. The answers were interesting. Some said their dad. Others said they made businesses for their children. In most cases, I wasn’t sure that I’d asked the question the right way, or that it had been interpreted the way I meant to ask it. My question was: your business isn’t a beautiful and unique snowflake, so what kind of model are you following?
It can be tricky, but it definitely is something to answer, if you want to feel like you’re following a path towards success.
A Few of My Business Models
For example, here are a few business models that I’m currently executing against to make business for myself:
- New Marketing Labs is a marketing consulting company. It follows the service model. Charge clients for services and deliver against the promises made in the contract. The basics of the model are to charge companies for service, to pay employees to execute the service, and make small profits off the margin.
- [chrisbrogan.com] is a media platform. It makes some money via affiliate ads like my support of Thesis (affiliate link), but more so, it’s a media hub that lets me point towards projects and ideas I think are interesting. It’s lead generation for my professional speaking. It’s lead generation for NML. So, the site isn’t the business model, exactly, but it’s part of other models.
- Professional speaker – I make money off speaking professionally to companies about marketing, online media, community, sales, lead generation, and topics like that. It’s a simple model, where you make money for intellectual property, but it’s a tricky model in that you have to be there to earn the money. It’s an “active income” model.
- Third Tribe Marketing is a media model as well. Build an active community, give it useful information, provide it lots of resources, and make money off the membership dues. This is a bit more passive (I’m on there daily for 1-2 hours a day), but it’s a little easier than flying all over the world speaking, so it’s a great business line to add to what else I’m doing.
- Books and other media. You don’t get rich selling books. But they’re great lead generators for other business.
So, those are just some of my own business models. In there, I didn’t mention events, which can be a good model for earning money. I didn’t talk about informational products, which can be lucrative. I didn’t talk about a lot of ways one can make money.
Find Models and Mentors
One of the best things you can do for yourself, should you want to improve your own business, is figure out models and/or find passive mentors. For instance, when I read Business Stripped Bare, by Sir Richard Branson, I felt like I’d found a kindred spirit in how he likes to organize his companies. I thought, “Wow, I’m not crazy.” It’s not like I spent any time across a table with Sir Richard. I simply read his book, took scores of notes, and then tried applying bits of his ideas to my own work, and found out what worked.
I do this with as many business books as I can get my hands on. I look for the bits I can apply. I also do that with blogs, and I do it with videos (you do watch TED, don’t you?).
Figuring out models is tons of fun, too. For instance, I had a great talk with John Jantsch of Duct Tape Marketing for some content I was building for Third Tribe, and John was talking about how he built out his training package, how he built a network of people to refer business into, and some of the other facets of his business. It’s all very replicable, all without ripping off John, and all something you could build towards growing out another niche.
I had a great talk the other night with Joe Sorge (I’ve talked about Joe’s business before), where I riffed some of my new business ideas off him, and he gave me his experiences back. It was immediately apparent that Joe was far more than a guy who sold hamburgers. The more we talked, the more I realized that he had a lot of experience in picking apart business models and finding inspiration to make them succeed.
Modeling Your Own Business
Ray Kroc used to quiz MBA students as to what business he was in. Everyone thought he was in the hamburger business. When I heard this, I thought, “A-ha. No. He’s in the franchising business.” But no, I was wrong, too. Ray was in the real estate business. McDonalds owns more real estate (more PRIME real estate, by the way) than even the Catholic Church. When you look at a business, the model isn’t always immediately apparent.
What’s your business’s model? How are you looking to make money? What is the longer-term vision behind your company? Have you modeled it?
Here’s a hint, by the way: in doing this, in taking out a piece of paper and writing down what you think your business is, if you can’t describe it in just a few words, it might not be a very successful model. Further, if you don’t work on ways to emulate some of the more successful models that are out there, you might be missing the opportunity to learn and piggy-back off the success of other pioneers.
Ted Turner turned billboard profits into a media company by having the vision to see that he wasn’t in the billboard business. What business are you in? How wide can you cast your vision, while still keeping the model simple?
The Internet has given us simple means to create businesses out of nothing. But to sustain them, we need solid models. What’s yours?
Pingback: Small Business News: What’s Your Business Plan? | Small Business Trends
Pingback: wrapping up growth week – creating a plan for growth « craftMBA.com – business thinking for designers & makers
Pingback: business buzz 4-23-10 « craftMBA.com – business thinking for designers & makers
Pingback: Daily Digest for April 24th | Jorge Barba 'Innovation Insurgent'
Pingback: Qual é o seu plano? | ResultsON