There’s so many things you need to think about when you’re starting your business.  One of the biggest things to figure out fairly quickly is how you’re going to make money.

This sometimes gets dedicated a bit based on WHAT you’re selling, and who your customers are, but it's something we should take some time to mull over so you don’t paint yourselves into a corner.

At its core, I like to think of business models falling into one of two categories:

• 1:1 Sales

• Group Sales

1:1 SALES 

These business models have us working to get 1 person to buy/deliver our product or service to.  This one person gets our product or service delivered to them, and that’s what we consider a SALE. It's just for that one person; no one else.  

For Product-Based Businesses

When you’re selling products 1:1, you’re selling directly to your end customer. This will mean that you need to market and attract every potential customer to your business, and you need to produce every product that they buy.

A lot of the business model decision here comes down to “where” you’re going to sell your product.

Online

When you sell online, you rely on the internet to bring you and your customers together.  Most businesses in the creative space have online stores, regardless if they have other types as well.  It’s almost expected now that businesses will maintain some sort of online store, so it’s basically a given that you’ll need to add this to your to- do list.

Most website platforms have ecommerce features that you can use, or you can build your website on one of the big ecommerce platforms: Shopify or Square.  They’re both pretty comparable, so use what works best for you.

One thing that may help with your decision…if you do in-person sales (like the two options below), Square is the only one of the two to provide a reader to take payments in person.  

I personally like to have ONE system that works for any of my selling, so if you can choose one that will cover you in all situations, go with it! Things can get pretty complicated when you’ve got 3 different sales systems to try to keep track of…not to mention trying to keep tabs on inventory across several platforms!!  Do everything you can to make your life simple!

Brick & Mortar

Do your customers want/need a static place to find you and your products? Maybe a brick and mortar store is right for you!  The good old fashioned “store” is what we traditionally think of when starting a business, but its no longer the status quo. Having a constant physical presence works for many industries so consider what is expected for your business. 

Storefronts can be fantastic marketing tools, and if you can snag great locations, you can often rely on the walking traffic to keep the customer visits high.  Having a store, however, is a HUGE financial commitment.  Leases are often 3-5 years and can often drain your bank account if the hope and promise of customers doesn’t pan out as expected.  You need to make sure you’ve got ready access to cash to help cover those rent payments during the potential slow months in sales.

Local Markets

If you're not quite ready to dive into a lease, slinging your wares at local markets, might be the best compromise.  With markets, you buy a table or space for a specific location or event, and then you work the market as though it's your own mini-store.

Markets can be pop-up / seasonal events, or there are larger, year-round markets in many cities as well.  With the seasonal events, organizers will put out calls for vendors to apply a few months before the market.  If selected, you’ll haul in your products, set up a beautiful display, and sell your heart out!  Some markets are one day, while others might span a weekend (or two).

With more permanent, year-round markets, these are venues that have multiple vendors in more “permanent” stalls….think of it as a low-budget mall.  You need to pay monthly rent to be there, and similar to a brick and mortar store, you need to cover that rent regardless of your sales.

For service based businesses

If you sell services, instead of products, your business options are a little different.  Same idea though - you need to market and attract each client to your business, and every sale requires you to deliver that service to them.  

With service-based businesses I like to think of the business models from the perspective of WHO does the work…

Done For You (DFY) Services

Whether we call it freelancing, contracting, consulting, or pimping yourself out, DFY services are ones where a client needs something done and they pay you to do it.  This can be for one-off projects or for regular, recurring work (FYI - this is what I do in the bookkeeping/tax side of my business).

The recurring subscription type work is my current business model.  It’s been great because it doesn’t require me to find NEW clients every month.  I build up my client base to where I (and in my case, my team) can handle it, and we roll with it from there.  The only way I can grow though, is to hire more employees; I’m limited in how much I can earn based on the qualified people I have on my team to do the work…or if I’m flying solo, based on my time to do the work!

Guided DIY Services

This group of services is where we work 1:1 with clients to teach or show them how to do something on their own.  Whether it's a coaching or training program, we’re helping our clients learn our special skills to apply in their home, family, or business.  

1:1 coaching can be incredibly rewarding to see someone achieve their goals or tackle something they’ve been trying to deal with forever!  

GROUP SALES

In this model, you’re still selling to one person, but what you’re delivering is available to many people.

With group sales, you’re not as limited by your capacity to do the work - whether it's producing products, marketing, or delivering a service,  as one product/service is going to reach multiple end customers.

For product-based businesses

Wholesale Sales

This is the most common business model you’ll see for group product sales.  The reason I consider it “Group” is because while you're making one sale, you’re selling MULTIPLE items to that wholesale customer, that will then turn around and sell it to their customers.

Your wholesale customers will pay a lower price for your products, because they’re buying in bulk, and they have to then hope that your products will sell in their stores. In taking on that extra risk, they get a cheaper price.

The advantage of selling wholesale is that you can move a TON of product without having to spend a bunch of time and money marketing and attracting customers to you directly.  You just focus on those business-to-business (B2B) relationships, and they’ll do that end-customer marketing for you.

Any marketing support you can provide to your vendors, though, will be greatly appreciated, and will help to ensure that your products sell well (and quickly) at their locations…which will help to ensure that they’ll place more orders, more often to you!

Workshops

The other group model that I see with product businesses, especially pre-covid, but slowly starting back now, is the workshop.  Workshops are where you use your product as a jumping off point and offer a workshop to teach how you do it.

In the artisan, hand-made market world, these workshops have been great ways to connect with your customers directly.  I promise that you won’t create some crazy competition; the chances of someone taking your workshop and then starting a business to compete with you are pretty slim.

So many of these customers are enthralled with the hand-made process, and while they’re not looking for a career change, they are looking for a fun night out with their friends…with something to show for it (other than a hangover).

For Service-Based Businesses

The most common way for serviced based businesses to offer group services is through group training or coaching programs.  In these businesses, you offer Guided DIY services based on a system or process that you developed and use with your 1:1 clients.

Group Guided DIY programs can be delivered in person, live online, or recorded online.  The further down that list you go, the more freedom you have in how you spend your time.  You of course need to always be marketing and attracting your potential clients to these programs, but instead of spending an hour with each client, like in your 1:1 work, you’re spending an hour with 5, 10, 100 clients at once!  It definitely allows you to impact and support more people with your expertise.

Choosing the Best Model for You

Let me just start by saying that what business model you choose today, does NOT need to be the same one 3 years from now.  These things change as your business and clients evolve. Here’s some things I would consider:

1. What capacity do you have? 

2. How much money do you need to make to cover your expenses, AND LIVE?

3. Do you like “seeing” people or would you rather work in the background?

4. Are you a teacher or a doer? (You can be both too)

5. How much time (and money) do you want to spend marketing and finding your customers? (not a real dollar amount…more philosophical)

6. What do your customers expect?

Remember, nothing is set in stone.  Start small and test out your money-making plan before you fully commit and sign away your first born.