Sarah Lakhani Consulting

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business model

Your Business Needs a Strong Foundation to Grow

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Here’s why… and how to get there.

In today’s online world, where more and more businesses are either expanding to online services, pivoting to become fully online or are launching as an online business from the get-go, having strong business foundations for your online business is key to secure your growth and longevity.  

There are 4 essential building blocks to an online business, and in this article, we’ll dive deep into each of them.

The four building blocks are:

  1. An aligned Business Model
  2. A strategic Offer Suite
  3. Magnetic Marketing
  4. Feel-Good Sales Strategies 

Business Model

Online business models vary – there are many tried-and-tested business models out there that you can use as is or modify in a way that works for you, your business and the lifestyle you desire. The important piece here is to find a business model that resonates with the type of work you want (and like) to do and deliver.  Some things to consider are whether you’re a natural content creator and would prefer to spend your time bringing in new leads and clients, after which the fullfilment of their purchases is highly automated or low-touch, or whether you’re more of a “deep dive into one client/project” person who would prefer to charge higher fees and have less clients. 

1. Subscription-Based Model

This model is usually based on a monthly or annual fee.  

Examples of this in the online expertise-based world are masterminds, miniminds, and memberships.

And you can get creative with this business model by offering subscriptions that give your clients access to paid masterclasses (or a set number of masterclasses per month), access to you or your team (like a retainer) or a combination of these services.  

2. Commission-Based Model

This model is built on taking a percentage of the deal/contract that you help materialize – or a percentage of the eventual revenue or profit that is generated from your services on the project.  

Examples of this in the online expertise-based world are kick-backs or referral fees if you generate business for a partner/colleague/other business, structuring a program at a low(ish) fee and adding on a percentage of the revenue or profit growth due to the expertise you provided in your service.

You can get creative with this business model by incorporating it into your 1:1 coaching, consulting or DFY services, by structuring the price as a base price + percentage of revenue/profit growth.

3. Freemium Model

This model is built on offering a free version of your product/service with an option to upgrade to a paid version for more access.

Examples of this in the online expertise-based world are offering a free lesson from an online course so your potential clients can get a feel for your course and teaching style before making a full purchase of your course.

And you can get creative with this business model by incorporating it into DFY (done for you) services by offering a free audit or assessment, with the option to then purchase your full program or services to bridge the gap between the client’s desired goals and the audit/assessment findings.

4. Agency Model

This model is for DFY (done for you) services, where a client pays you to have something created specifically for them.

Examples of this in the online expertise-based world are in areas such as social media marketing and other digital services such as website development or systems set-up.  It’s also used by consultants who offer DFY services such as taking on and completing projects end-to-end.

You can get creative with this business model by creating a team of freelancers, other businesses or service providers to offer a larger array of services to your clients, as a one-stop stop.

5. Value-Add Model

This model can be added onto any of the other models simply by providing additional add-ons that your client can choose from and add onto purchased services.

Examples of this in the online expertise-based world are having a “menu” of add-ons that you offer clients such as additional 1:1 time, access to paid-for resources or additional time on a retainer or program (e.g. extending the support timeline).

You can get creative with this business model by providing an additional support upsell within a group program or self-study course or offering on-going support for a set duration e.g. 3 months after the closure of a group program or 1:1 package.  

Offer Suite

Whichever business model you choose, the next step is to ensure you have a strategic offer suite.  This means choosing an offer suite that works best for your strategy.  

Typically this looks like having 3-5 offers that clients can “move through” as a customer journey within your business services.  The offers are priced at different price points, in alignment with the work/content provided and the transformation or results delivered.

This allows clients to make repeat purchases, increasing your customer lifetime value (i.e. allowing you to make more revenue per client) because once they’ve purchased one of your services/programs/offers and had a great experience with it, they’re likely to then make another purchase for another one of your services/programs/offers. 

What’s most important here is to make sure your offers don’t canibalize off of each other.  This is a common mistake in offer suite development, and results in potential clients not being able to easily decide which offer is right for them – which ends in them not making a purchase at all.  

Marketing

Most people don’t enjoy marketing.  I personally have a love-and-hate relationship with it myself.  However, if there’s one thing that’s the most important thing when it comes to creating consistent growth in your revenue, it’s marketing.  

So, how can you make marketing fun – or at least more tolerable?  

The first thing is to change the way you look at marketing.  Marketing doesn’t have to be showy at all.  It’s allowing your potential clients to see how you can help them by guiding them to change their perspective on what they’re currently stuck on, sharing a new perspective with them (i.e. what you do and how you do it) and taking them behind the scenes to see how this works, and what results you’ve been able to generate for others.  

Marketing is more about connection.  It’s not necessarily sales, although the two get blended a lot in the online space.  Marketing is about sharing your business and services with your audience, but making it about them – not about you.  

Your goal is to get people to see themselves in your marketing, to help them build a connection with you, see you as an authority and begin to trust you.  

Most of the time, people get stuck on marketing because they don’t know what to share or talk about.  This is where content pillars and filters makes marketing much easier.  By having topics you consistently talk about, and ways in which you talk about them, you can easily create content for 2 weeks, a month, or more in advance.  

So think about what you offer, what the key pillars are, and the different angles in which you can talk about these topics.  Create a table with pillars down the rows and filters (angles) across the columns, and spend an hour or two popping in ideas.  Not only does this simplify marketing for you, but it also helps you maintain a cohesive set of topics that you regularly talk about, making it easy for new potential clients to easily understand what you do, who you do it for, and what your take in your industry is.

Sales

Lastly, we have sales.  There is no business without sales.  If you’re struggling to make sales, it’s time to change what you’re doing on the sales front because your business needs to make money to survive – and ideally from there, to thrive.

Like marketing, many people dislike sales.  But sales doesn’t have to feel “sales-y” or “icky”.  Sales is actually a service to your ideal clients.  By reframing the way you look at sales, from it being a “I’ve got to try to get a client” mindset to “I have something that I can provide that someone else really needs” mindset, you’ll eventually come to realize that not doing any sales activity is actually selfish! Your potential clients need what you offer.  There is something they are struggling with, and you have the solution for it – whether it’s coaching, consulting or DFY services.  

When it comes to sales in the online space, there are two main categories of sales strategies – live launches and evergreen funnels.  I always recommend having both set up.  A live launch allows you to show up fully, take your audience on a deep dive of your current offer/service/program and get them excited about it and ready to buy!  On the other hand, an evergreen funnel allows your sales system to be fully automated, typically detonating from a freebie through to a series of emails that ends in a pitch for one of your offers/services/programs.  Having both these sales strategies in your business allows you to continue to make sales even when you’re not live launching (i.e. through the evergreen funnel) and also allows you to reap the excitement of a large revenue influx (i.e. through the live launches). 

So when it comes to sales, you’ll have a situation where your marketing tees up demand, with a live launch then taking your audience through the full sales experience, or you’ll have a situation where your marketing has CTAs (calls-to-action) to grab your freebie, which then denotates the evergreen funnel.  

Choosing one over the other is a matter of preference, and there are many business owners who skew one way vs doing both, but I implore you to consider having both in your business.

Want to Work on Your Business Foundations?

If you’ve recently launched your business and are looking to have the foundational business elements in place in a strategic way, check out Business LaunchPad.  This program covers all the above topics, in a 3-month timeframe so that you can develop the powerful and strategic foundations for an online business that thrives! 

Using Business Model Innovation to Create a Unique Business

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If you’re building a business, you need a business model.  It’s really that simple.  It’s not negotiable, you can’t “sort of” put a business model together.  You’re either in or you’re not.  And I’m hoping you choose the former.  Because a business model is not just necessary, it can literally take your business to completely new levels of success.  And when you do that, it’s usually through Business Model Innovation.  

What is a business model?

Let’s first get through the basics.  What is a business model?  The best definition I’ve come across describes a business model as the the logic of the business.  It describes how the business operates and how it creates value for its customers.  

In other words, a business model describes how your business intends to function.  

That means there are a few things that need to be articulated when talking about your business model.    

Surprisingly, there isn’t a standard definition of what those things are.  Some definitions say you need 3 things and others say you need 9 things as part of your business model.  So I’ve put together my own definition which I think is the most useful (I might be biased)! 

A business model should cover or answer the following:

  • Who is your customer? 
  • What are your customer’s needs? 
  • What is your value proposition, and how will it fulfill the customer need?
  • How will you deliver the value proposition (including any requirements for people/skills/teams, technology, processes etc)?
  • How will you make money? This is sometimes looked at in term of revenue, and at other times, in terms of profit.  To keep things simple, I prefer to use revenue, and then apply an average profit margin to the numbers.  

How to create a strong business model

Your business model should align with your business goals.  If you create it in this way, you will create reinforcing flows within your business model.  What this means is that value across your business model circles around and continues to create increasing amounts of value.  

Let’s use my business and business model as an example.  

Business Vision: My business goal is to create value for entrepreneurs to do what they love and in turn deliver high value and benefits to people and societies (through their products/services and through any charitable/non-profit “pillars” within their businesses).  

Customer: Frustrated entrepreneurs looking to build or scale their businesses.

Customer needs: Clarity on what to do and how to do it.  

My Value Proposition: I run group programs that cover the 4 major areas that entrepreneurs struggle with when building or scaling a business – validating the idea, brand strategy, business strategy and customer strategy.  

Delivery of my Value Proposition: Through group programs, which take place online across 6-8 weeks.

Revenue Model: Revenue is generated through my group programs.  

As I deliver more value to my customers (entrepreneurs), I am able to attract more of them to join my group programs.  This in turn results in more success within their individual businesses, which leads to them delivering more value to their customers and more benefits to give other organizations they support.  But then, as more people become the recipients of either the value provided by my customers or by the organizations they support, more opportunities are created across societies for more people to become entrepreneurs.  And that increases the pool of potential customers who are able to then join my program.  It’s a cycle.  You put more in and more comes around which then allows you to put even more in, and so on.  

What is business model innovation?

Business Model innovation arises from challenging the different parts of your business and designing an ecosystem that gives rise to a new business model.  

New business models arise out of a variety of reasons.  There could be new technology available that you can capitalize on, or perhaps you absolutely must find a way to maintain your market share after new businesses start popping up in your industry or area of specialization.  Perhaps you’ve uncovered some new customer needs or new potential customers to serve.  All of these would require you to look at your business model and figure out new ways to profitably deliver value to solve a problem that your customer is facing.  

When you take the time to do that, you will be looking at business model innovation.  

How do you develop an innovative business model?

The most straightforward way I have come across to do this is to ask the question “How can I/we do [the opposite of what is happening]?”.  

Think of all the innovative businesses (and services) we all know and use these days.  At some point in the design of their business models, they would have had to ask themselves:

“How can customers rent movies without having to pick up a DVD/video?”
“How can customers rent a car without coming into the car rental office?”
“How can customers check into their flight without going to a check-in counter?
“How can people look at their photos without printing them?”

There are many other ways to develop an innovative business model, but this is by far the easiest.  

And it’s important to remember that this same technique leads to great services which don’t have to be ground-breaking innovations, but can make a big difference for your business.  For example:

“How can customers feel like they’re in our restaurant when they’re eating delivery?” has lead to high-end restaurants offering decor, candles, cutlery and more with their food delivery, particularly during COVID-19 lockdown periods, in order to replicate the restaurant ambiance.  

Developing an Innovative Business Model for Your Business 

So let’s go back to my definition of a business model.  How can you challenge different parts of your business model in order to create business model innovation? 

Ask yourself “how” at each stage.

How can you address your customer needs in a different way?
How can you address your customer’s needs at a lower price?
How can you address your customer’s needs without going through an intermediary?How can you deliver more value without charging more?
How can you deliver your product/service without acquiring the person/skill needed?How can you make money without charging your customer?

You can go as deep as you want to.  It is only by asking these questions and exploring options that you’ll be able to find a solution that is different from what is currently available.  And that, in turn will lead to a business model that is different from those available in your industry.  And that’s what we’re all looking for, isn’t it?  

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