5 Business Model Changes that Can Generate More Revenues
I tell Black women founders in coaching sessions all the time: your business needs more than just a good idea; it needs a sustainable and profitable business model to thrive. Many great concepts fail not because the idea was flawed but because the business model—the structure for delivering value and generating revenue—was off. Whether it’s the pricing, delivery methods, messaging, or customer targeting, getting it right is essential. Here are seven actionable ways to tweak your business model and set your venture on the path to sustainable growth.
1. Segment Your Clients and Tailor Your Messaging
If your customers share similar stories, challenges, and needs, a single marketing strategy might work. However, for businesses with diverse audiences, segmentation is essential to maximize revenue.
Example: Suppose you run a fitness coaching business. Some of your clients want weight loss, while others focus on muscle building. By creating two separate segments, you can design tailored programs and marketing campaigns. For weight-loss clients, emphasize fat-burning meal plans; for muscle builders, highlight strength-training guides.
How-to Steps:
- Group your clients based on shared characteristics like demographics, buying behavior, or needs.
- Create detailed profiles or avatars for each segment.
- Adjust your messaging, pitch, and even product features to match each segment’s needs.
Pro Tip: Businesses that personalize their marketing see an average revenue increase of 10-15%. Need help? Check out tools like HubSpot or access my Ideal Client Avatar Kit, available exclusively in the Sistahbiz Suite—our member platform. Not a member yet? Sign up for a 14-day free trial to explore this and other game-changing resources.
2. Launch an Affiliate Program
An affiliate program incentivizes others to sell for you by offering them a percentage or fixed commission for every sale they generate. It’s a budget-friendly way to build a sales force and expand your reach.
Example: Think about Amazon. Their affiliate program lets website owners earn commissions by linking to Amazon products. This expands Amazon’s reach into niche markets without heavy advertising costs.
Why It Works:
- Tap into existing networks of influencers, customers, or partners.
- Gain broader brand visibility with minimal upfront costs.
Stat: Businesses that use affiliate marketing earn an average ROI of 12:1, making it one of the most cost-effective marketing strategies.
3. Shift Toward Passive Income Models
Delivering products and services manually can cap your growth. Automating or creating self-service models can scale your business and free up your time.
Example: Uber and Airbnb use customer-driven models. Uber doesn’t own vehicles, and Airbnb doesn’t own property. They act as platforms connecting users to providers, creating scalable passive income streams.
How to Apply:
- Explore how your product or service can be delivered digitally. For instance, instead of live coaching, consider pre-recorded video courses.
- Use tools like Kajabi or Teachable to build and sell online content.
Why It Matters: Passive income models allow you to grow without increasing your workload.
4. Add a Complementary or Consumable Product
Bundle your core offering with a complementary product or service that generates recurring revenue.
Example: Printer companies sell printers at a low price but charge premium prices for ink cartridges. This razor/razorblade model ensures a steady revenue stream.
Your Turn:
- If you run a hair salon, consider selling a subscription box with hair care products.
- Offer monthly maintenance packages if you’re in the tech space, like software updates or hosting services.
Stat: Businesses using subscription models grew revenue 5-8 times faster than traditional businesses in the past decade.
5. License Your Products or Services
Licensing allows others to use your intellectual property (IP) or product for a fee, giving you a scalable revenue stream without the heavy lifting of direct delivery.
Example: If you’ve developed a proprietary curriculum for coaching Black women entrepreneurs, license it to other coaches or consultants. They pay you for the right to use it, expanding your reach and boosting revenue.
Steps to Get Started:
- Identify your unique product or service.
- Secure copyrights, trademarks, or patents to protect your IP.
- Create a licensing agreement outlining usage rights, fees, and restrictions.
Stat: The global licensing market is worth over $280 billion annually, making it a lucrative avenue for scaling your business.
6. Create a Two-Sided Model or Marketplace
A two-sided model connects buyers and sellers, with your business as the platform facilitating the transactions.
Example: Think Etsy, which connects handmade goods creators with buyers, or TaskRabbit, linking service providers with customers.
Your Opportunity:
- If you’re a Black-owned beauty brand, create a marketplace connecting customers with other Black-owned beauty products or services.
- As a coach, build a platform connecting clients with specialists like financial advisors, web developers, or branding experts.
Why It Works:
- Revenue streams include transaction fees, subscriptions, or advertising.
- Builds community and leverages network effects for growth.
Stat: Two-sided marketplaces are expected to grow to a $40 billion industry by 2030, thanks to their scalability and versatility.
Changes like the ones in this post can transform your business from a struggling operation to a thriving, revenue-generating powerhouse. As the CEO, it’s your job to design a business model that not only works but thrives.
Ready to elevate your business model and strategy? Let a Sistahbiz coach help you create a customized game plan.