Some Thoughts On Business Models...What's YOUR Opinion?

22 replies
There are a number of viable business models out there.

Off the top of my head:

Copywriter
Software Maker
Affiliate Marketer
Content Freelancer
Ebook Creator
Service Provider
Coaching Classes

And the list goes on and on.

If you look at each of these (and I'm sure the many that you could add)
you can see that they all can make a lot money. I don't think there's
any argument there.

But...is there a business model that YOU would say is the most efficient
and least efficient?

Here's what I mean.

Take copywriting. And when I say copywriting, I mean copywriting without
adding any little extras to it. Just writing copy.

With the exception of hiring other up and coming copywriters to work
for you (yes, you can do this) you're essentially on your own and ONLY
make money when you're writing. There is no residual income coming in
unless you make special deals with your clients that you get X% of the
sales coming in. Those kind of deals don't come at the beginning of your
career. So at least at the start, you're working a job.

On the other hand, with ebook creation, your very first ebook, with a little
smart marketing and getting a good affiliate base, you can make a fortune
right off the bat and not have to keep working to make your money.

So in MY opinion, this model is more EFFICIENT than being a copywriter,
graphic designer, content provider or any freelance job where you have
to keep writing or designing in order to keep earning.

I am not saying that the one is any better than the other (especially if
you just love to write and don't care how much you work) but I am
saying that one is more efficient than the other.

What are your thoughts?

Agree?

And if so, does it even matter?

If somebody loves doing what they're doing, does efficiency matter?

I say it only matters IF you are solely concerned with how much money
you make and nothing else.

In other words, if you're money motivated and not "I have to love what I
do" motivated, then efficiency matters very much.

Again, agree or disagree?

But more importantly, and here's where you can really put your brain to
work and maybe help out those who don't know WHAT to do...

What would be YOUR ideal business model IF skill wasn't a consideration?

In other words, anybody can do anything at all if they want to.

Any and all thoughts are welcome.
#business #modelswhat #opinion #thoughts
  • Profile picture of the author mlord10
    I don't think it is any secret to anyone that knows me that I enjoy affiliate marketing, and think that it is a very efficient business model. You do not have to create products, deal with refunds, or anything of the nature.

    Once you have an affiliate campaign setup, and you are actively building a targeted email list then you can make money without being very involved. Of course you want to continue to generate traffic, but once you know basics of traffic generation that is actually fairly easy.

    Promoting residual income programs is great, because you get paid over and over for a single sale. I think promoting residual affiliate programs is one of the most efficient business models around.

    Efficiency matters to me, because I like doing other things than just internet marketing. I know from reading your stuff Steven that you enjoy music, and I for one enjoy playing a lot of golf.

    I have other passions besides internet marketing, and the more efficient my business model the more time I can use to pursue all the things life has to offer.
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  • Profile picture of the author Matt Bard
    Just a quick off the top of my head response would be Software Maker would give the highest returns (we are assuming that the people performing each of the listed are competent) and the Content Freelancer the least.

    The Freelancer is trading time for money, while the Software Maker creates once and gets paid over and over again.

    I realize that there are others on the list like ebook Creator that also make it over and over but I believe that a good piece of software should be sold at a much higher price.

    Also, if the software does not become blatantly obsolete, then it has the capacity to keep earning at the high profit margin for a good long time.

    So out of the "time for money" category, I think the Freelancer makes the least and the Copywriter the most.

    I already stated that I believe the Software Maker would be more profitable than the ebook Creator.

    But if someone loves what they are doing and happy with the returns they are making, then by all means keep being happy.

    I do what I do for the lifestyle.

    Matt
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  • Profile picture of the author John Lenaghan
    Originally Posted by Steven Wagenheim View Post

    But...is there a business model that YOU would say is the most efficient and least efficient?
    From a pure efficiency point of view, I suppose that a residual model is ultimately more efficient than anything that pays you based on the time you put in, since it can continue to produce revenue with little or no additional work.

    But it may not be efficient for someone to get it up and running in the first place. For example, you said:

    On the other hand, with ebook creation, your very first ebook, with a little smart marketing and getting a good affiliate base, you can make a fortune right off the bat and not have to keep working to make your money.
    For someone who doesn't know how to market very well, or doesn't know how to generate a decent amount of traffic, this might be highly INefficient, since they're not going to make many sales without traffic and a decent offer. They might be better spending their time writing for someone else, and getting paid for that writing one time.

    Originally Posted by Steven Wagenheim View Post

    If somebody loves doing what they're doing, does efficiency matter?
    Yes, but within the context of what they enjoy doing. Being more efficient at what you like gives you more of an upside, but it might theoretically be less efficient compared to other things that they could spend time on (but may hate).

    Originally Posted by Steven Wagenheim View Post

    What would be YOUR ideal business model IF skill wasn't a consideration?
    My ideal business model is a combination of residual income (various specifics - Adsense, affiliate offers, my own products, etc.) and trading time for money income.

    Residual income is much more efficient but the tradeoff, in my experience at least, is that it tends to have a higher risk. Most residual income models rely on some other entity to do part of the work. eg. SEO traffic, PPC traffic, affiliates, etc.

    If the other entities decide to change what they're doing - Google changes something and your site rank drops, for example - it can have a big effect on your results.

    Trading time for money, on the other hand, tends to be less risky because you don't have to rely on someone else to the same degree. But of course, there's a limit to how much time you have, which in turn limits your revenue potential.

    Doing a bit of both tends to protect you from the ups and downs from either model.

    John
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    • Profile picture of the author Chris W. Sutton
      But...is there a business model that YOU would say is the most efficient and least efficient?
      The business model that I have found that works well is the one where you pick a business platform and stick with it until you get it right!

      In other words, anybody can do anything at all if they want to.
      I can anyway because you're not the boss of me... at least I don't think you are... are you?
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      • Profile picture of the author Steven Wagenheim
        Originally Posted by Chris W. Sutton View Post

        The business model that I have found that works well is the one where you pick a business platform and stick with it until you get it right!

        I can anyway because you're not the boss of me... at least I don't think you are... are you?
        No Chris I'm not.

        Did I suggest I was? :confused:
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  • Profile picture of the author Dennis Gaskill
    I think efficiency and inefficiency are byproducts of your natural talent and learned skills. Different models will suit different people.
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    Just when you think you've got it all figured out, someone changes the rules.

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  • Profile picture of the author MichaelHiles
    Steve, I don't know if you factor this into your definition of "efficient" but any business model that involves the direct selling of one's time carries an automatic cap on how much they can theoretically earn.

    I would take this into strong consideration because such a business model typically means that if I stop selling my time, I also stop earning.

    When one's time is used to establish a business system that eventually runs external to my own, direct efforts -- well, I would consider that to be more efficient than one that requires my constant input.
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    • Profile picture of the author Steven Wagenheim
      Originally Posted by MichaelHiles View Post

      Steve, I don't know if you factor this into your definition of "efficient" but any business model that involves the direct selling of one's time carries an automatic cap on how much they can theoretically earn.

      I would take this into strong consideration because such a business model typically means that if I stop selling my time, I also stop earning.

      When one's time is used to establish a business system that eventually runs external to my own, direct efforts -- well, I would consider that to be more efficient than one that requires my constant input.
      Excellent points. Thank you Michael.
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    • Profile picture of the author Dennis Gaskill
      [DELETED]
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      • Profile picture of the author Chris W. Sutton
        No Chris I'm not.

        Did I suggest I was? :confused:
        Actually, Steven I was just making a funny! I don't want you thinking that you have offended me because of what I said! As you well know, I MAY have a serious bone in my body but it is VERY difficult to find. Actually, I think you might be suffering from "shell shock!" Take care!
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        • Profile picture of the author Steven Wagenheim
          Originally Posted by Chris W. Sutton View Post

          Actually, Steven I was just making a funny! I don't want you thinking that you have offended me because of what I said! As you well know, I MAY have a serious bone in my body but it is VERY difficult to find. Actually, I think you might be suffering from "shell shock!" Take care!
          I keep forgettin about you hillbilly's sense of humor.

          We Yankees just don't git it.

          (walks away scratching head) :confused:
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          • Profile picture of the author Chris W. Sutton
            I keep forgettin about you hillbilly's sense of humor. We Yankees just don't git it.

            (walks away scratching head) :confused:
            Hillbilly's sense of humor? Yankees don't "git" it?
            (walks away scratching butt):confused:
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          • Profile picture of the author GuruGazette
            I like royalty income models, and see them as a cross between residual affiliate programs and product creation. Stock photography for example: Do the work involved with setting up the shoot, taking the pictures, editing, processing, keywording and so on, then you upload them to your distributer sites and they take care of everything from there.

            Amazon Kindle books are the same. Once the book is finished and published, you just enjoy the bank deposits. If someone has a download problem or needs tech support for their Kindle they talk to Amazon, not me. So like affiliate programs, I have no support, payment or delivery issues to deal with.

            Unlike affiliate programs though, I can keep going if one distribution point goes away. Since I own all rights to the products, I can have them selling through many outlets, and I have plenty of options if one closes down or changes their terms to something unacceptable.

            Software and copywriting are profitable, but not as efficient
            My few cents,
            Kathy
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  • Profile picture of the author SageSound
    I think you need to distinguish between the people who produce the content and those who market it.

    If you're skilled enough to be able to both create and effectively market your own content, then it can be argued that is the most efficient business model.

    Then again, if you're a great marketer, you should be able to market ANYBODY's content and do well. Which makes affiliate marketing and direct sales of third-party stuff the most efficient for you.

    The least efficient would be those who create some content and sell it to one person. THAT tends to be trading time for money. Software often falls in that category. So does writing books and ebooks, copywriting, and so forth.

    Personally speaking, what I've run into is the ability to create nice generic software products, but I'm not good at writing the sales copy or the marketing, nor at getting affiliates. So I make relatively few sales.

    Also, I ran a WSO for something this past week and all the follow-up posts I got were questions about the product. Even though I made several sales, only one guy posted anything about the product, which was positive. The point is, some folks have a knack for generating tons of testimonials, which helps create a feedback loop that generates more sales.

    So there are lots of smaller skill sets that work together to make a product's success greater than the sum of the parts.

    There are folks who could take a 5-page PDF and turn it into tens of thousands of dollars of revenues.

    And there are folks who can create stuff worth tens of thousands and not break a grand in sales.

    -David
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  • The best business model is to go for multiple streams of income. E-book content, DVDs, software can become obsolete the older they are. Affiliate products wax and wane in terms of popularity...

    If you have a good mix of different projects built up over time (for goodness sake don't go trying to do all of these things at once! Build up one, then move onto the other!), means that there's always a source of income coming into the bank.

    Andrea, The English Webmistress
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    The-English-Webmistress is really Andrea, who went backpacking the world, accidentally landed in Panama, Central America, and never left. (Beaches! Mountains! Hot latin music! Piña Coladas!) She doesn't miss the London commute AT ALL...
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  • Profile picture of the author gjabiz
    MANY people love what they do and have been trained for...doctors, lawyers and teachers are a few examples.

    But as for a CASH flow model, I like the Harvey Brody TOLL POSITION model and the Sam Carpenter SYSTEMS model.

    Consider that Harvey has been selling the same product to his "list" of about 125 customers for over 5 decades, with sales around 70 million units, and he gets a KA ching on every unit sold...for not much more than sending a few faxes a month. And with a stable of products, his model is producing millions of dollars a year as he operates a one man show with NO employees and a little help from his wife and daughter as he needs it.

    Hard to beat a MODEL with a 50 year track record.

    Sam Carpenter is relatively new on the scene, his bestseller Work the System is an excellent part of the "efficient" group of work like the Four Hour Week and some of Seth Godin's stuff.

    Sam operates a successful business "working" on it just a few hours a week, this frees up his time to pursue other interests.

    Steven, you have worked very hard to get to your level and now you are enjoying the fruits of your labor.

    I just wish there were a "class" a newbie could take which shows ALL the models and offers guidance in picking and choosing the one which may be of most interest. As an Information Product developer, I agree with you about the ebook and having information at work for you 24/7 once you get it set up.

    My OPINION, as asked, is getting CONTROL of a product/service and then setting up automated "systems" which require minimum time and effort to keep the cash flow...flowing..is one of the most efficient uses of time and brain power.

    gjabiz

    PS. Any activity which develops ASSETS, which have long term value, is a good use of time also.
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  • Profile picture of the author Matt Bard
    gjabiz, Angelfire? Love it

    I still have a Tripod site but lost my Angelfires.

    Proof that simplicity can still do wonders.
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    • Profile picture of the author gjabiz
      Originally Posted by Matt M View Post

      gjabiz, Angelfire? Love it

      I still have a Tripod site but lost my Angelfires.

      Proof that simplicity can still do wonders.
      I've had (have) many other sites, such as my current blog at doomgloombliss.com BUT, this simple FREE web site at angelfire (bought by Lycos) has produced tens of thousands of dollars for me.

      For my "Fly Low and Collect the Dough" model, it still works great for me.

      Thanks for noticing.

      gjabiz
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      • Profile picture of the author Neil V
        Steve

        Since you ask here is my thought on the most efficient model. I have been thinking a lot about this lately and decided to focus on this.

        I call this my pre test method and is doing so well so far

        Every market i enter into i spend no more than $50. This could be $50 for ppc or $50 for article writing, etc.

        Instead of picking a niche i find a hot product (something that is already selling well and is a proven winner)

        My goal is to break even. If i make about the same money that i invested in the first month then i have winner because i can optomize later on


        Bottom line i have gone into full testing mode and even hired outsourced staff who tests products for me all day.

        And you know what it actually works.

        It may not be that efficient as testing takes research and a few weeks and then pretty much the entire system is on autopilot. I like waking up and making sales every day.


        So for me my most efficient is focusing 80% of my time on testing and outsourcing the rest to get the blog done articles and traffic
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      • Profile picture of the author Sandra Martinez
        For me, the most efficient business model is the one that maximizes the LTV.

        If you only sells ebooks, it is not necessarily true that it will be bringing you money on autopilot. The day you stop promoting is the day that ebook stops bringing revenue. There is also a matter of maturity and "spoiling" of information, specially in the IM industry that changes so fast.

        I have different funnels in place, and they all include a blend of different products. It is a lot of work, as I do them custom for each client.

        for example, I have a client I did a website for.

        Then they contracted me to upload the main products (it was a store),

        then I gave them coaching in website administration and SEO (so they could put their own people to update the website),

        prepared for them one info product about how to blend their website in their general marketing strategy

        and it is 3 years they are paying for hosting and technical support. I only touch that website a couple of hours every 3 months or so. As the backups are automatic.

        Now, that information I developed for them, I reused it for other clients...

        And this creates a sort of snowball.

        I do work a lot. But it works for me, as I prefer to deal with a smaller database of clients with longer LTV than a whole bunch of people. I over extend easily and you just can't help everyone...

        But, that is just me, of course...

        Sandra
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  • Profile picture of the author InternetM39482
    Hi Steven,

    I've been flipping sites, and although I think it's not the most efficient model out there, it certainly works for me.

    I've got a few employees working for me who create the sites, do all the grunt work and thus, my time involvement is minimal. I can hire more people, get them through my training system and scale up as and when I want so, in the context of your post, I certainly consider it an efficient model.

    Cheers,
    Swastik
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  • Profile picture of the author Colin Theriot
    I agree in general with the first post, because as a copywriter, I'm starting to move away from doing work for others and working on my own products, lists and blogs for the same reasons you cite.

    However, I did want to add that it's certainly possible to create a residual income strictly as a copywriter by switching to a royalty/commission model and arranging that you remain the copyright holder on your material which they are licensing from you.

    Personally, that's not something I want to pursue myself, although primarily, I intend to be an affiliate who promotes to my lists, which I intend to build through writing copy.

    That's essentially a purely copywriting business, and as long as I build it intelligently and use automation and autoresponders and all that, I could end up with a hands-off business where I don't have to keep writing to keep earning.

    It's about building it for passivity, and I think you can potentially do that with any business model with proper planning and modifications. Good post.
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    Fair warning: It's possible I'm arguing with you because I have nothing better to do.
    Join my free copywriting group on Facebook: http://CultOfCopy.com

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  • Profile picture of the author mlord10
    I agree that it is very much possible to create residual income from copywriting for others, but since I don't really do much of that I can't speak on the subject with any authority.

    However, as I stated above I think that affiliate marketing is one of the most efficient business models, simply because after setting up a winning system your business can largely run itself.

    Of course their are other ways of doing it, but for anyone who is struggling to find an efficient business model I would suggest build a list and promote quality affiliate offers.
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