As an online entrepreneur, the door is wide open with a myriad of business opportunities presented to you. You can certainly pick and choose according to whatever criteria you feel are most important, but from a financial standpoint, it’s best to be methodical when it comes to choosing a business model.
You’re not looking for a short-term payoff. You want a business model that can provide ongoing profits to you month after month, year after year. That kind of longevity requires some careful analysis and thought.
There are many things to consider when choosing a business model that works best for you. It might be based on how quickly you can earn money or the level of earnings you can soar to.
It also needs to be something that aligns with your skills and interests, and something that fits in well with your lifestyle and time-based needs. Some businesses require more time, effort and money than others.
The Best Business Model Is Based on Your Skills and Interests
Just as you spend time making sure your own skills and interests play a role in your niche selection, you need to do the same whenever you are choosing a business model to pursue.
You don’t want to be forced into a career that doesn’t bring you joy or that causes too much of a learning curve or burden when you are trying to make money online. If you have a passion for writing, then you may want to pursue something like a freelance service provider career or another business model that caters to people with that skill.
This can include everything from selling private label rights to creating your own information products, blogging, affiliate marketing, and more. You also have to think about your expertise when choosing a business model.
If you are not knowledgeable about a niche topic, it might be harder for you to create your own info products that serve as a guide of authority to that particular target audience.
You also have to decide whether or not you want to work directly with your audience, whether that’s customers or clients – or if you prefer to take a behind-the-scenes approach to your online career.
Choosing a Business Model That Caters to Your Niche
If you have already picked out your niche topic, you need to make sure that it aligns nicely with whatever business model you want to try as well. For example, if you have your heart set on being in the toy niche, it wouldn’t make sense for you to choose info product creation as your business model because people are not buying books about which toys to buy.
A better business model for that niche would be affiliate marketing, where you are reviewing and promoting the toys so that parents can buy it for their little one for birthdays, holidays, and just because.
With some niche topics, you’ll find that they fit nicely with many different business models. Take the weight loss niche, for example. Not only can you promote products as an affiliate, but you can write guides for people who need to know how to lose weight.
You can also source products that you can sell as a drop shipper or as an FBA (Fulfilled By Amazon) associate. You could also create printables for this niche, such as weight loss trackers or calorie counters – and depending on your skills, you may even be able to sign people up for a coaching program.
In some cases, such as working as a freelance service provider, it may be your skill that’s in demand and not a specific niche topic. You can work as a ghostwriter, graphic designer or virtual assistant without any niche specification at all.
In What Ways Can You Invest in Your Business Model?
Every business model is going to require something from you. There are basically three things that you’ll have to contribute to a business, regardless of which one you choose. Those are time, money, and insight.
When choosing a business model that works best for you, you have to first consider how much time you want to devote to it. You may only have a couple of hours each week to work on your business, or you may want to pursue it as a full time career.
If you are going to be working for clients who are on a tight deadline and have a massive amount of work that they need you to do, having minimal hours to work might not be the optimal business choice.
However, if you could create dozens of printables to upload to your store on Etsy or Shopify in that span of time, you might find yourself moving in that direction. Not only can the number of hours you can work make an impact on your business selection, but the hours themselves may matter.
If you only work in the wee morning hours, it might be hard for you to work with clients or have coaching calls with customers unless they were on the other side of the globe. And while some things can be done strictly via email, you need to look at all the different communication methods you may need to use before you devote yourself to one business model.
Another aspect you have to think about in terms of time is how long it will take you to become profitable with your business model. Some businesses take off quickly and have an immediate payoff, while others require a longer wait.
For example, you could create an info product and launch it by this evening and start seeing money coming into your PayPal account. But if you were promoting as an affiliate on Amazon, even if you made sales today, you would still have to wait 60 days to receive your first commission check.
Money is not always a requirement to get started in a business. Sometimes, it will be imperative to your success. For example, you can’t embark on an FBA career if you have no money to invest in products that you can have Amazon ship out.
But in some cases, you can use free options until you have the funds ready to reinvest in your business. An example of this would be freelance service providing. You might start off on a platform that allows you a minimal number of bids until you can begin purchasing more options.
Or, if you are designing items for printables, you may have to use free tools and graphics until you can reinvest in your business for premium tools and access to items that will elevate your earnings.
With many business models, such as affiliate marketing and info product sales, the investment will be very minimal. All you will need is a domain name and an expensive hosting account before you can start promoting or marketing products to the general public.
Another thing you need to consider is the insight that you have to provide to the business model. If it’s a steep learning curve, and you are desperate for money, you may not want to select a business model that will require you to learn so much before you get started.
There are some business models that are going to require ongoing learning. An example of this would be if you were choosing to pursue affiliate marketing. You would have to keep learning about your niche topic, finding products to promote, and even mastering search engine optimization, which is an ever-evolving skill that will keep you ranked high in the search engine results pages.
6 of the Most Popular Business Models Explained
Let’s go over some of the most popular business models. These are in no way exhaustive of what you will find online, but these are typically the ones people start with when considering what’s best for them.
The first is to begin selling your own info products. As a newbie, you are likely devouring courses that are teaching you the ropes. But you can sell guides in many different niches, including weight loss, survival, relationships, pets, and more.
The basic premise of an info product creator is that you will create a course based on a specific topic that helps your end user. It can be in text format as an eBook or video modules.
You will create a listing on your site or on a third party platform and have a sales page that is presented to visitors with copy that converts them into buyers. In order to have the most success with this business model, you will want to recruit affiliate marketers who can promote to their list for you.
This is an easy business model to adopt whenever you have knowledge to share with your audience. However, it does require you to network with other individuals and to stick to a deadline so that you can ensure your launch goes live when affiliates are expecting it to.
This is ideal for people who are enthusiastic about a topic, who know how to teach and guide others, and who are adept at giving enough detail so that their audience doesn’t feel lost.
Affiliate marketing is another business model that comes naturally to newcomers in this industry. This is where you sign up on platforms that will provide you with a unique link that is tracked so that whenever you send traffic to a product listing and they purchase with the item, you earn a commission.
This is a great starter business because it doesn’t require you to create anything of your own other than the reviews themselves. However, it does take a little bit of time to get your site ranked ahead of your competitors.
This is ideal for people who have good communication skills and who can thrive in giving recommendations about products. If you are empathetic with your target audience and understand their needs and wants, you can excel an affiliate marketer.
A freelance service provider might be a good business model choice for you. If you have skills such as writing, copywriting, graphic design, or working as an assistant, this can be a good way to get started making money online quickly.
You’ll be able to relieve other marketers of the burdens they are facing with a large to do list. They may need blog content, banner graphics, help with their customer service emails, social marketing management, affiliate marketing recruitment, and other tasks that you can handle for them in exchange for money.
The people who excel with this business model are those who can project to clients that they are the best person to trust in taking over a portion of their business. In order to prove themselves, they have to meet deadlines, over deliver, and step up wherever needed in the business.
Dropshipping and FBA our two business models where you are having items shipped directly to the customer without having a hands on approach. In one instance, you have listings on your own website where you are taking orders and then paying a company a portion of that income in order to ship the product out.
With FBA, you are sourcing products ahead of time and having them shipped directly to Amazon’s warehouse. You will create listings on their site, which has a built in audience of millions, and they will ship the orders to the customer and handle all interaction with them after that.
This is a great business model for people who are adept at sourcing inexpensive items that can sell for much more. If you want to remain behind the scenes and scale your business with listings and you are detail oriented about stock and pricing, this would be the right business model for you.
Another business model that is good for people who have insight to share, such as those who would make good info products creators comment this coaching. But instead of creating a one size fits all product for your audience, you will be interacting one-on-one or in a small group setting with individuals so that you can tailor your approach to their needs.
This is a great business model for people who have an elevated level of expertise in a niche topic. If you want to charge more for your knowledge, coaching allows you to do that in comparison to how much consumers would be willing to pay for a simple eBook.
You may find that your target audience is more narrow, or that the market is saturated with too many coaches in some instances, but you’ll have to conduct an analysis to see what you could bring to the table that can meet the needs of those clients.
And if you like the idea of being creative and selling products of your own, but you don’t want to create entire info products, you might want to take the route of choosing printables as your business model.
These are digital, downloadable files that the buyer can use on their computer or print out at home. They can be edited in some instances. These are items like calendars, home school worksheets, wall art, planners, trackers, and more.
The great thing about this is that you get to use your creative talent to fill your store with items your audience is hungry for. You can even use templates for the main structure of your product and then swap out graphics and wording so that it is more tailored to certain demographics.
The great thing about this business model is that you don’t have to spend a lot of money up front, if any, and it provides you with a passive income stream and an outlet for your creativity.
The best thing you can do if you choose this business model is to find a way to set yourself apart from other printable sellers on Etsy and elsewhere. Instead of looking at who you can copy, look at any gaps in the marketplace and create your printables based on those.
Pivoting from or Scaling Your Business Model
With every business model, you might find yourself in a situation where you realize it’s time to either switch gears and turn to something new, or scale your business even more.
What you don’t want to do is abandon your business model if it doesn’t make money immediately. This is a mindset that many new online entrepreneurs fall prey to because of the hype being bestowed on them by unethical leaders.
Before making a change to pivot in a new direction or scale up, you want to look at your business model and determine whether or not profits are stagnant or even decreasing. If you’re finding it a struggle to grow your income, it might be a signal that the market has become saturated or that the needs of your customer have changed from when you first got started.
Not only can you ask your customers directly what they want from you, but you can engage in some data analysis to see what they are more interested in and what their behaviors are showing you so that you can make your next decision.
When you do realize it’s time to make a change, if you’re going to pivot to something else, don’t go from one topic or business model to another entirely without it being a necessity.
It may be something as simple as shifting your messaging so that instead of targeting one specific demographic, you’re now focused on another one. Or, maybe your customers are hungry for a different type of product or service, and you can change what you are doing to meet those needs.
Sometimes, it’s not what you are doing but how you are pricing it that makes a difference. You may need to increase your pricing to reflect the value or decrease it to be more competitive in the marketplace.
If you don’t want to switch gears, but you want to grow your business more, think about any complementary markets or demographics that you can begin serving. You also might be able to add on to the products and services you are offering to grow your income in that way.
In some instances, you might find a collaboration or partnership is all it takes to give your business an injection of profits without you having to change anything else. You want to do as much research as possible early on so that you’re not leaping into something risky without considering important results.
Combining Business Models Into Multiple Streams of Income
One of the best things about becoming an online entrepreneur is that you don’t have to settle for just one business model. You can start out with a single one, but you can then add on others so that you have a well diversified, multiple streams of income career.
This is not only something that you may enjoy, but it’s a necessity because the online industry can be volatile period you may find your customer base dissipating in one area, or a platform shutting down, which can easily decimate your finances.
You want to mitigate the risk of this happening by having different methods earning for you. Think about what makes the most sense to add on each time you are ready for this challenge.
An example of this would be if you were starting off as a weight loss coach, and you wanted to stop trading time for money and instead have something more passive delivering for you.
In that case, you might want to start your own blog where you are reviewing products as an affiliate marketer. Or, you could create your own info products and sell those to people who may not be able to afford direct coaching from you.
In order to implement your strategy of diversified income streams, you want to make sure that it’s the right time and that you have a plan in place for achieving certain milestones and managing your business for proper growth.
The last thing you want to do is start focusing so much on the new business you are implementing that you begin to let your existing one slip. This is a form of self sabotage that’s unnecessary, if you are outlining your objectives and the tasks that need to occur in order so that you are always moving toward your ultimate goal.
Deciding on the right business model can seem like an overwhelming process. But if you simply take time to carefully analyze what you are capable of and what you most enjoy, and pair that insight with the factor of profitability, you will be setting yourself up for success that lasts many years.