Which business model is right for you?
When it comes to choosing the way you want to run your business, it's all too easy to look at other people's businesses. “She’s really successful. I want a business like hers”.
Yet that style of decision making doesn’t take YOU into account. The time you have available, the other commitments you have, your personality and the way you like to work.
There are a number of different business models to choose from. I want to share the three most common models with you.
1. Sole Practitioner Model
This is the business model that most business owners start out with. You’re the face of the business, the sales person and the technician who is doing the core work for the services you offer.
You may have admin support to help you behind the scenes, but the responsibility of delivering to your clients is up to you.
The services you offer within this model could be 1:1, courses, programs or memberships. Anything from a $30 course to a $30,000 VIP program would fit into this model.
Let’s look at the example of a virtual assistant (VA) who is starting up her business. She’s chosen this business model as she enjoys working directly with clients and wants to improve her knowledge about the different types of technology that her ideal clients use.
She’s going to be responsible for every aspect of her business to begin with, although she is planning to hire a bookkeeper to make sure that her finances are taken care of.
2. Agency Model
With the agency model you are the still the chief salesperson, but you are no longer the only person doing the core work. You now have other “technicians” helping you to deliver the work to your clients.
Because you now have a team helping you to complete the client work, your role has expanded to include quality control so that you know that all of your clients are getting the same great level of service.
This is a leveraged model as you are able to employ more technicians to do the core work.
Let’s look at our VA again. Business has been going really well for her, with more clients than she can comfortably manage in the hours that she wants to work. She still loves working directly with her clients, but she wants to hand off some of the tasks that she doesn’t enjoy or that aren’t her strengths.
She moves to an agency model and hires two other VAs to assist with the core work. One VA is a tech whizz, so she’ll be helping clients with any technology related questions. The other VA is a creative genius who will be creating all of the graphics that are needed by clients.
In her own business our VA still has her bookkeeper, and has now hired her own admin VA to help with the behind the scenes of her own business.
3. Service Co-Ordinator Model
With this model you have stepped completely away from doing the core technical work and you are now responsible for co-ordinating other technicians to do the work for clients.
This is another example of a leveraged model.
Let’s consider that our imaginary VA was a different type of person altogether. She discovered that after using a sole practitioner model for a year that she doesn’t actually like working directly with her clients on their admin. She found that she really enjoyed organising projects and launches for them so decided to take those skills and move to a service co-ordinator model.
She no longer does any VA tasks, now she has a team of VAs who are doing all of the technical work for her clients. She’s using her organisation skills to match the needs of her clients with the VAs on her books.
As you can see, the type of business model you choose isn’t simply a case of replicating what someone else is doing. Your ideal model needs to take into account who you are, the way you like to work, your strengths and weaknesses, the time and energy you want to commit to your business and the income you’d like to earn. Your model can also change over time.
If you’re unsure which is right for you, or you’re thinking of moving to a different model, book in a 20-minute call with me here to discuss how I can support you to make the right decision.