Your business model sucks.
As important, your business model sucks, you don’t even know it.
You read that right.
I’ll say it one more time.
Your business model sucks.
Yes, you’re the smartest and most talented person around. You have customers and employees that depend on your company.
Let me be the first to share that having a business model that sucks is not a personal reflection on you.
And the great news is that you can change the game and create a business model can disrupt your industry.
I should know. I started my EdTech company, Embanet, right out of school with no money, experience, or team. Thirteen years later I experienced a 9-figure exit.
How did I create a 9-figure exit?
We’ll talk about that later on. Right now, know this.
When I created my first business model, I looked around and did what everyone else did.
And yes, my business model sucked. Big time.
In the early years, there were no profits. And when the profits came, there was a mismatch between effort and results.
In other words, the gigantic effort did not reflect the small amount of profit. I knew there had to be a better way.
For a decade I failed my way forward on refining the business model.
Each failure brought me closer to success. And finally, it happened.
It became clear as day. There are two specific things every entrepreneur must do to go from “zero” to “hero.”
What are these two things?
Why Your Business Model Sucks
No one ever made a difference by being like everyone else – PT Barnum
If you’re like most entrepreneurs, your business model sucks.
A typical business charges a fee to a customer for a good or service provided.
When I started my EdTech, I copied everyone else and followed this model.
What’s the problem?
Where do I begin!
To start, this is a one-time transaction. You have no predictability for repeat business. Customers may return. Or instead, customers may never come back.
You guess is as good as mine.
There’s no predictability on cash flow, let alone the future of your business.
The future of your business depends on innovation and planning.
But how can you spend precious time and money to innovate and plan when you have no idea about your future?
Most entrepreneur’s don’t.
And this is the problem.
Your business model sucks, and you want to change it. What do you do?
There is a better way.
Interested to know how you can predict repeat business and cash flow month-over-month?
Keep reading as this is the topic of the next section.
Your Business Model Sucks Until You Do This One Thing
Predictability brings about security – Magda Gerber
Your business model sucks until you have predictability.
Predictability of what, you ask?
Predictability on repeat business and cash flow.
For most people, predictability is boring and can even threaten survival. Maybe.
In business, predictability is the engine for your business to survive and prosper.
Your business model sucks, and always will until you build in predictability.
The first step to dominating your industry and bottom line is a subscription model.
A subscription is a commitment for a customer to pay you each week, month, quarter, or year.
In my EdTeach, as an example, I started with a quarterly subscription.
This resulted in schools paying a per-student fee each semester. It was a great first step.
I leveled the playing field when I change the business model to mirror the schools.
Students pay the school for each course taken. I changed things up so that schools paid me for each course a student takes.
Small change but a big difference for profits.
And the irony is that I was already doing the same amount of work. In other words, revenues doubled or tripled for the same amount of work.
A subscription business model was the first step in helping to line up my 9-figure exit.
But it wasn’t enough.
Before talking about the second, you must take, let’s look at the power of subscriptions.
The Power And Elegance Of Subscription Based Revenue Models
Don’t be afraid to give up the good to go for the great – John D. Rockefeller
Your business model sucks until it doesn’t.
In the previous section, I shared how a subscription-based revenue model is the first step you must take.
Before moving forward, let’s look at a few examples of brilliant subscription models.
At the time of this writing, Amazon has over 100 million Prime members paying $119 per year. Costco isn’t far behind at 90 million members who are paying $60 per year. The music service Spotify clocks in at 75 million subscribers paying $99 per year.
You do the math. My calculator ran out of zeroes.
The power of a subscription-based model is staggering.
Porsche and BMW now offer you the ability to pay a monthly fee to drive your favorite model. Drive the same car for a year or change models every week, you choose.
And if you think subscription-based services are a fad, think again.
But let’s not look to the future. Let’s look to the past, a mere ten years ago.
Ten years ago the notion that you’d rent your music instead of owning it was absurd.
Fast forward to today, most people rent their music thanks to the likes of Spotify, Apple, and Pandora.
With access to millions of songs across your many devices, online or offline, the verdict is in. Renting beats owning.
Are you hooked on a subscription-based model?
You should be.
But just when you thought things are good, there’s one more thing you need to do to make things great.
I did this for my 9-figure exit.
And you should too.
Read the next section to find out.
Revenue Sharing: The Kingpin of Business Models (And Your Wealth)
Fortune sides with him who dares. – Virgil
Your business model sucks until you start revenue sharing with your customers.
Earlier, I revealed that you must do two things to go from “zero” to “hero.”
Firs, morph your business model into a subscription.
I did this, but this is not what catapulted my business (and profits) into a 9-figure exit.
What is the second action that I took that help me capture my 9-figure exit?
The kingpin of business models is revenue sharing.
The obvious answer is that revenue sharing with your customers has profits increase. A lot.
The not-so-obvious answer is this.
Your customers will not revenue share with you unless you have a compelling offering.
My EdTech was only a position to revenue share once I solved a painful problem I was passionate to solve. The problem was so painful that my customers were happy to pay me to remove the pain,
My solution did two things. First, fill the seats with students for my customers. Second, my customers were profitable from the first student onwards.
In other words, I removed the risk for my customers
It was only when I understand the pain of my customers was I able to solve the problem, help them, and help myself.
In the process, I also disrupted the industry.
It was revenue sharing that put my EdTech on the map for an eventual acquisition. What will put you over the top is when you do both revenue sharing and having your company run without you.
Students, my customers, and my company (in that order) were all better off with my solution than without it.
Want to know how to stop having your business model suck?
Have a business model that is BOTH subscription based and revenue sharing.
Master Your Business Model And You Master Your Destiny
Control your own destiny or someone else will – Jack Welch
Want to control your destiny and retire rich and happy?
When your business model sucks, your destiny is on hold.
The best way to run your business is to assume you’ll keep it forever AND sell it tomorrow.
Is this possible?
I ran my EdTech using this dichotomy to create an industry disruption.
The higher the value of your business the brighter your financial future.
When the above happens, you have options.
Having a business model that is both a subscription and revenue sharing creates a highly profitable business.
If you decide never to sell, your profits take care of your company and you. This assumes you’ve prepared to sell your company.
If you decide to sell, you do so at a maximum value.
Assuming you keep your company forever has you make decisions for the long-term. This is essential for your business and customers.
But stagnation and laziness often set in with long-term thinking.
Assuming you sell your company tomorrow has you walk the fine line of long-term and short-term planning.
Dominate your destiny when you master the art of both long-term and short-term planning.Click to tweet
The process of morphing into a subscription-based model with revenue sharing forces you to follow this approach.
The days of having your business model suck come to an end.
Yes, you can have it all. Be that fabulous person you are who has a winning business model.
Your business model sucks, and you don’t even know it.
It’s not your fault. After all, you’re doing what everyone else is doing. But you’re also getting the same results that everyone else gets.
There’s a better way.
Wouldn’t you rather put in the same amount of work, or less, but dominate your industry and have higher profits?
You can do this if you do two specific things.
When I did these two things, I transformed my EdTech and created a 9-figure exit.
What are these two things?
First, change your model into a subscription service.
Second, set-up revenue sharing with your customers.
Easier said than done.
Figure this out, however, and you will both disrupt your industry and lock in your financial future.
Having doubts that you can do this?
Remember me. I was the kid right out of school with no money, team, or experience,
Despite the odds, I figured it out and created a 9-figure exit.
If I can do it, so can you.
I know you can.
And the great news is that you already have everything you need, right now within you.
So what are you waiting for?
Here’s to you and your success!
Your BIGGEST Raving Fan,