When you’re considering starting a service-based business or growing an existing one, it’s important to understand the different types of business models you can use. Understanding what each one is for and how they best operate will help you to determine how to choose what’s best for you and your business. The five in this article are the primary foundation models. There are other models, but upon close review, any other models are merely a hybrid of these five. The five covered here are: One-on-One Service Model, Coaching/Consulting Service Model, Information Products Service Model, Licensing/Franchising Service Model, and the Membership/Continuity Program Service Model.
The first foundation business model is the One on One Service Model. In this model you deliver your service or services to clients on an individual basis. This is a very broad model and this is where almost everyone starts out and there’s a good reason for that. Some examples of professionals where you see this business model are insurance and financial professionals, real estate agents, plumbers, electricians, landscapers, wellness professionals, designers, entertainers, physicians, attorneys, etc. Each of these provide a service to their customer. This is a great model to start with because it requires little or no inventory. It is generally a fast start up with little capital required and you don’t generally need much staff, if any, to provide the service. On the flip side, this can be a very time intensive model and one where you are trading hours for dollars.
The next model is the Coaching or Consulting Service Model. You might think that this is the same as the one-on-one model and yes, there are some similarities. In this model, however, you are providing service as a consultant or coach to clients on an individual and/or a group basis. For this model, your expertise in your field IS your service. You might be a medical professional where you see patients and that would be a one-on-one business model. Now, you could also be a medical professional that consults other medical professionals how to provide their service, structure their practice, build their business, etc. And, as I mentioned a moment ago, you can provide this service in either a one-on-one situation or a group setting. Common examples of this model are life coaches and business coaches, business development consultants, strategy consultants, and trainers.
The Information Products service model. With this model, you leverage your knowledge and expertise into product form. Many people tend to think of information products as the CDs or digital downloads but in reality, information products include e-books, audios as CD’s or mp3’s, teleseminars and webinars, transcripts, multimedia courses, workshops, and events. In other words, information products cover a lot of ground. When you integrate info products into your business you can add multiple income streams, create recurring revenue opportunities as well as passive income opportunities and your leverage abilities go through the roof.
The fourth business model is the Licensing & Franchising service model. This is where you train others to do what you do and generate revenue by allowing others to duplicate your business. Sometimes you’ll hear this referred to as the “Train the Trainer” model. This can include a certification program which can be live in person or online. It might include monthly usage fees-for example, certification maintenance fees. There might be back-end commissions on products and programs. This is also almost always a feeder model for your highest level one-on-one coaching.
The final model is the Membership Program or Continuity Program service model. In this model, you create a program where members access exclusive content. This can be delivered in a monthly training program, a subscription plan, a retainer program, a maintenance program or perhaps you develop a premium content feed. This is a fun business model to have and it’s relatively easy to sell and easy to set up with the right team and tools in place. You can create passive income for yourself and this has the potential for a huge 1 to many payoff. However, be aware that large numbers are generally required to achieve significant payoff. You’ll also need to constantly have fresh content and on a regular schedule. Lastly, retention can be a little tricky-you’ll need to be prepared to invest time and energy to continually build and maintain your program. There are multiple factors to consider when choosing the right business model but the first step is to understand how each one operates. From there, you’ll want to consider the time, resources, and support required to fully and properly execute each one.