Have you ever wondered which of the, what is the best business model for you, small business?
Well, on this episode I'm going to be talking to you on how to use these three business models that we're going to cover today to quickly set up and study of business, getting new clients, and then how to start charging correctly for your skills as well as how to actually take it a step further and charge for your abilities to deliver, rather than just charging for skills.
So join me on this episode of the virtual entrepreneur, I am your host Herbert innocent and this my friends is the go to podcast for small business owners and entrepreneurs who see their business as a vehicle for change, and I am here to bring you the tips, the tricks, and the big secrets, the how tos and the success stories. Success knowledge from entrepreneurs around the globe.
So I go about learning all this stuff and I come here and I report it to you and this is the latest on what I have learned. So in our previous episode first is that we learned on how to essentially look at your business marketing and if you've been wondering what is missing in my market, what am I not doing right, right, we talked about how to get in front of high quality interested prospects, so that you can start, you know, getting a peace of mind in terms of, you have all these clients, so you can get a peace of mind from the freedom that comes with having choice on who you work with.
So if you didn't get a chance to listen to that episode I want you to stop while you're doing, go back to that episode, and listen to you will get a tonne of value, and then you can also get the notes at Herberdmarketinghelp.com
And listen, if you are stuck in terms of getting help with your marketing whether it's lead generation, or just bouncing off some ideas so that you can take it to the next step, feel free to drop me an email at contact at habit marketing help.com with the subject line help and I'll be happy to get back to you and you can see how we take from the end, as I said today on this episode we're gonna be covering three ways three powerful business models that you can use to get started and with just. With that said, let's jump right in.
So the first type of business model is the is the time based business model, and this is when you charge per hour per day, weekly, monthly, and even a retainer business model is really a time based because you're charging a specific amount every month but it's really the same way. It's just means is a reoccurring commission, sorry the reoccurring pricing but it's really the time base, right, and there is good benefits for these and these so not so good benefits for these so if you're charging on the hourly, daily, weekly or monthly.
If you're charging per hour per day per week or per month. One of the things that you've noticed, easily is a ceiling in terms of how much you can actually do. And if you're charging on this pricing. Also, your clients will see you as a commodity because they're charging you per hour. And you are getting the results, they'll see you as a commodity. And this is what I've seen, you are given this perception of a commodity, because the cap is the hour, right, whether you deliver good results or not.
They don't feel it, they just see the hour any, it's just stops him from seeing much further, it's a very limited view. Right. And then if you are charging on a monthly. It's also quite similar, right, it comes down to commodity because to see the value of what you get in a month, considering it's going to be every single month. Just like a lot of businesses. Yeah, that's an awesome truck outside.
Just like a lot of businesses will tend to see a lot of their employees as costs to reduce because they struggle to create structures that show how much value and valuable employees are you any business, if you're providing services and you're charging per weekly per month, or by the hour, that's how your clients will see you.
Right, and ruins come when it's time to cut down cost your services will be one of those things to go, but the benefits of this is that it's a simple and easy method to set up and to get started and you can easily and quickly get clients to start working with you and doing business, you because they understand the model they understand what they're paying for. In most cases, they will see a commodity, but the last time that they need that commodity.
Right, and so for you as a business owner, those are the things that we conscious of that, when you're charging your clients, you can ever look at that and really position you depending on how you approach this.
It can really position you in a limited, because there's no much room there's only so many hours in the day so many days in a month, and so many months in a year. so even if you're charging per hour is only so much room you can increase. Now if you're charging is a reoccurring, that's great, but you're also just usually one person so, or if your businesses, a lot of people. That's great, in terms of how much you're giving per hour, but in this case you're talking about services.
The return on model becomes a little bit trickier in services because there still only so many services you can serve for your small business. So depending on how you structure your services for the recording. If you commoditize your, If you put productize your services, then there's a chance that you can sell a lot more of it. But other than that, most cases, it's a little tricky to get by, but it can be done, it can be done.
Another business model that you can use is the project based business model, and this is a really good business model because it's simply, it's a very simple model, and for a lot of businesses and people with different expertise in industry could hire you for a project because they understand why you are there, that they need a key expertise in this project, and you are there to fulfil that, and so they are charging you're charging for your skills. When the project is done is done, but there's a limit to how fast you can grow with this.
There's also a limit to how much you can make this unless you expertise are so high and you position yourself so high that you're in very high demand, it can be quite difficult to see where to go with this.
And the next part is, but it's a very good model to start with at the beginning, especially if you want to specialise in a very, very specific area. The next business model type will be
essentially if you're going about using a resort based business model or a value-based business model, and this is a business model that I'm seeing a lot of businesses tend to like it a lot of entrepreneurs who are doing really great tend to love this model because in this model you are paying for the results you're getting.
And I don't know about you but when you're paying for the results you're getting there is something unique about it right you're like you know what, if you get the results I pay you if you don't we both. It's like if you win, I win if you lose, So it's very nice resume. Very nice.
It's a very nice model because you're paying for the results you're getting and the best part of this one is also that you can increase how much the results and the more you increase it incentivizes the business, but it also incentivizes you write you're both motivated to get much, much more. Right. And so, there's, there's a commission element to it. So, usually what will happen is you know, you may decide what's the key.
You know the costs that are covered and then from there on that could be a commission-based or it could be just a purely commission base, which is what a lot of online businesses tend to do, but for you as a service provider. This could also be a way of you essentially using a value base model where you're pricing based on return of investment, right, so you're calculating and you're showing them how you can help their business grow in terms of, depending on how much they invest in. So you're talking about things like you know the value that you're bringing to the business.
In terms of revenue. In terms of sales in terms of new leads in terms of repeat business. And so, in terms of client retention in terms of positive reviews. So, all these things, including the cost of inaction, right, so you're showing them how much they're going to get all these values. Right. And then from there on, you're building upon price.
And what ends up happening is, as the business implements this system, the more profit they get you also get that and I think for a lot of business owners this model seems to be one of the good model that they don't implement because it's a little tricky and difficult to implement has its value you need to understand your value and your unique proposition in the marketplace. And that's the powerful thing about this.
So, this will be one of the best model that I'm seeing being recommended, and I'm thinking, and from what I'm seeing, essentially not thinking what I'm seeing, essentially, is for a lot of these service-based businesses that have scaled up to the millions, it's been because of using this kind of model right result based business model, and it seems like anyone who is serious about their business, they'll go and use a resource base. As a result, base business model because when the charging for results. Essentially, it speaks for itself and sells itself right you you know you're saying, I can bring you x in x.
Can you do it yes and this, we're gonna price it based on however much you know, we are making so I remember one of the mentors say, you know, if I implement my systems in your business. I'm gonna charge initially just 15,000 just for implementing the system, and I'm gonna take a commission of about 30% for every single sale that from your business, and that's how powerful and if you think about it.
The only way for someone to make that claim is if they really believe in their skills and their ability to deliver, right, and that's a very trustworthy place to be because you are eliminating the risks, so if a business may end up making millions or two million, you know, your profits have significantly increased from. However much you could have charged initially because if you try to charge, you know, 30% of that, just off the bat, declarative like, Are you out of your mind, right, because they don't see how much value they don't see just how much you could deliver, right, so this is the ability to demonstrate and capture value at the same time and as I say, demonstrate bility is a powerful thing.
And here's how you go about implementing that as a process as a business model in your business. So I'm super excited that to bring you this information that I have learned today, I think you really need, I think through a coup.
And by the way, if you need help with Herbet with marketing lead generation and lead nurturing just God forbid marketing help.com You can find the notes for this episode there, and you can also find my email which is contact at Herbertmarketinghelp.com
So if you want to help with your marketing with whatever you're selling, most services, I'll be happy to get back to you and see how I can be of help. Aside from that, thank you so much for tuning in. In this episode, the virtual entrepreneur.
I hope you would go about implementing these, or maybe even tricking you can even combine two or three of these and see how it goes.
Again, I'll talk to you in our next episode and as always, have a wonderful evening.