It’s time to look at sideline business models – you’re almost done! You’ve thought about what you want from the business and what the business will want from you. Now it is time to choose a business model. Don’t panic – this isn’t as complicated as the term might make it sound. A business model is just how you plan to operate the business.
Sideline Business Models Simplified
The questions you must answer are the same questions you would answer when planning a party – see, this isn’t hard!
Who do you want to sell to? Businesses or individuals? Availability plays a big part here. If your full-time job is during the day (like mine) it is difficult to sell to businesses because you simply aren’t available at the times they would want to talk to you. You could focus on providing services to other part-time entrepreneurs who are working after hours as you are. That solves your timing issue, but be sure you are able to grow your revenue independently of how much time your are working. Otherwise, you are self-employed, no a business owner.
Every business basically sells one of four things – products, services, information, or experiences. Hotels sell experiences. Apple sells products. Authors, coaches, and marketing gurus sell information (and sometimes they also sell products, services, and experiences). Tony Robbins and Disney sell experiences. Consultants and designers sell services.
This is one of the areas where business models can get tricky. Diversification of revenue streams (a fancy way to say “having more than one way to make money”) is important. Many sideline business models involve selling more than one of the four things!
We touched on this back in part one – do you want a local business? Or do you want your business based online? Even if it is local, your business still may or may not have a physical location.
This relates back somewhat to “who”. If your business is local, when will it be open? Is it year-round or seasonal?
“How”is the heart of the business model.
Just looking at online business models, there are many variations, and new ones being created all the time.
Let’s say you decide to start a blog. That doesn’t describe a business model on its own. Will you make money through advertising? Promote affiliate offers (commission sales)? Sell your own products (back to information, products, or services)? Create a membership site?
Will it be niche site or an authority site? Will you be the only author or will you accept guests posts or hire article writers to create the content?
Maybe you decide you want to sell products. You could sell them online through one of the marketplace sites like Etsy or Zazzle. You could create your own site and buy ads on Facebook to get people to it. You could sell at a local flea market on weekends. Or you could find a network marketing company and sell through a party plan. Of all the sideline business models, this is probably the one that is most designed especially to be a sideline.
This cycles back to your desires and resources. How much will you have to invest to get your business going. Whether online or in the physical world, you can start many businesses VERY inexpensively. Chris Guillebeau’s The $100 Startup (yes, it’s another affiliate link – if you click it and buy something I’ll make some money – it’s part of my business model) highlights many inspirational entrepreneurs who started with very little money and built successful businesses.
I can’t remember the exact quote or even who said it, but I remember reading where some famous entrepreneur said that having a lot of startup money is actually a hindrance because you aren’t as creative when you have money to throw at a problem. All of us want to have that problem, right?
Finally, we circle back to your values again. Every time you make a decision about your business model, you make it because you are choosing between values. Why sell information rather than products? Why focus on the needs of millennials instead of retirees? Why decide to start a network marketing venture rather than develop your own products?
Every time you say yes to one value, you are likely saying no to a different one. That’s why we started with your values and goals. If you were starting a corporation, you would have to answer to shareholders, but this is YOUR company and you only have to answer to yourself, so take your time and design it the way YOU want it (while making sure it will be profitable, of course).
Are You Still Here?
Great! I hope you’ve gotten some value out of this series. As a reward for your diligence, I’ve put together a cheat sheet with all the big questions to ask yourself when you examine sideline business models.