As most of you would know, a successful online business really takes planning and strategy. When I was starting out, I tried selling e-books first. I tried to DIY everything and copy what other bloggers do. But at the rate things were going with my business at that time, there was no way I would be able to quit my job…
I didn’t realise that there are other types of online businesses that which would give me a far better income more quickly.
Choosing an online business model can get really overwhelming if you have don’t know what’s best for you. So today, I want to give you an overview of a few of the most popular online business models; their advantages and disadvantages.
e-books are very popular because they are so quick and easy to create. Since they come at a low price, they are a little easier to sell. No need for huge funnels or sales calls – people should buy pretty quickly.
However, the conversation rate of the people who buy vs how many people see your offer is not going to be massively different from more expensive products. You might get a 2% conversion on a $1,000 course, but a maybe a 10% conversion on your $10 e-book – and that’s pretty high.
Because the price of the book is so low, you need to have a massive audience to make a livable income. It will take much longer to grow your sales to a decent rate. When I first started selling my own ebooks, I barely hit the $100 mark for 8 months – I couldn’t quit my corporate job with that kind of salary! In fact, the unit price of an ebook is so low it may not even recoup the costs of advertising per sale.
If you are, let’s say, a professional accountant, providing monthly services can give you a recurring, continuous income.
Another example of a monthly service is a membership site. You can create a membership site in almost any niche. You then update it with new content on a weekly or monthly basis.
The drawback is membership site fees can be very low depending on your niche – usually $10 – $100 a month. You will need to get many recurring clients to be able to reach your current salary level.
Again, it will take time to build your audience, and maintain it – the average retention on a membership site is just 3 months. On top of that, you will need to take time to update your content regularly.
Online courses are a great way to earn passive income! Once you’ve recorded all the lessons, you don’t necessarily need to give more time per client.
The disadvantage is that to be able to create a great quality course, you need to already know your audience very well. Writing your whole curriculum takes lots of research. To ensure your course gets results, you may need to change the curriculum frequently until you know what works.That’s the biggest barrier to creating online courses!
Online courses are usually anywhere from $100 – $2,000 depending on their length and the value of the results they will bring the clients. You will need to market continuously to build your audience and make continuous sales. Even though the content delivery is passive, the sale rarely is!
1:1 services are things like coaching, mentoring, teaching, tutoring or consulting. This is where you work with one client only per session. You can charge premium prices since you are giving your clients a bespoke experience.
1:1 services are the best way to start in online business. They don’t require a massive tech build like a membership site, or an automated sales funnel, and you will need only a couple clients a month to be able to replace your salary.
On the downside, you do need to give your time per client (though usually you only require around 4-12 client hours a week to hit your income goal). As the price tends to be higher, you may need a longer sales process including a sales call.
Group programmes offer you the higher value pricing of live services like 1:1, but you can leverage your fee per hour. Instead of someone paying say $200 an hour to work with you 1:1, 10 people will pay $100 an hour, so you are effectively earning $1,000!
On the flip side, group programmes require a set curriculum. They are almost a hybrid between the live client interaction of 1:1, and the structure of an online course. It’s better to launch a group programme after having worked with 1:1 clients.
On top, group programmes require work to sell. You need many people to buy at the same time, which usually means a big launch. You’ll need an existing audience; at least a month of full-time marketing, and a proper tech set up.
In the past, my launches have required me to work 60-80 hours a week for 2 months, before I actually start the marketing! Launching is not for the faint of heart, and it doesn’t feel like a Freedom Business when I do it. It’s one of the reasons I don’t currently teach launches as part of my strategy.
If you are just starting in business, I only recommend getting into 1:1 services first. Not only will you get to replace your corporate salary in a shorter period of time, but working with these clients will give you an idea of where to go next into your business. It’s almost like getting paid to do really in-depth market research!
Your 1:1 work will teach you what group programme or online course curriculum you should create down the line. It will also fund your business investment to grow your audience and create the tech set up and team support required for a larger business later on.
YOUR NEXT STEP
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- How to price your services
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