Is your business model broken?

A business model is the framework that shapes your business and, to a very large extent, determines whether it's successful. Your business needs a sustainable business model in order to fulfill it's purpose, which at the most basic level is to find, keep and grow customers profitably.

OK, I know that last sentence might stir up a debate, especially among coaches who have a much loftier purpose in mind for their business, like making a difference in the world, etc.

But unless you're independently wealthy and can afford to run your coaching business as a hobby, your business MUST find, keep and grow customers. Profitably.

Because if it doesn't, it will eventually stop being a business, and then you're going to have to find some other way to make a difference, most likely by working for somebody who's figured out how to find, keep and grow customers profitably.

Which brings me back to my point, which is that if you want YOUR business to succeed, you'd best pay attention to the business model that's shaping it. Because not all business models are created equal.

In fact, the business model that coaches typically start out with has a built-in bottleneck that limits the number of clients you can work with, puts a kink your profits and takes all the oomph out of your marketing.

Doesn't sound too healthy,does it?

How can you tell if your business model is broken?

See if any of this sounds familiar:

1. Your marketing strategy is persuasion-based. Your objective is to get people to give coaching a try so they can experience the benefits first-hand. Giving away free sessions is a primary tactic, and your marketing materials are centered around explaining what coaching is and how it works.

2. You're trying to create a market for your coaching, rather than finding a viable market first and tailoring your products and services for them. You don't know much about your competition or why a customer might choose you over them or vice verse.

3. You're careful not to be too specific or too targeted in your marketing because you don't want to exclude anyone who might be a potential customer.

4. Your client base is diverse; the only thing they seem to have in common (other than working with you) is that they have nothing in common. They don't all share a single interest or a specific struggle, which makes it difficult to create a common solution or approach. You're not in a good position to promise specific results.

5. You'd like to generate some passive income through products, but it's difficult to come up with something that appeals to everyone.  Your product funnel is pretty simple; basically, there's free stuff at one end and a high-ticket coaching package at the other.

6. You offer the standard coaching package, which looks like a clone of every other coach's standard coaching package. There's very little to distinguish your approach and packaging, aside from your logo.

7. You get paid for your time, rather than for your expertise, and the only time that brings in revenue is the time you spend coaching.

8. Your profits are driven by how many clients you can work with at once. To increase profits, you must either increase your client load or raise your rates.

9. When your client load goes up, your productivity in other areas goes down. And when you shift focus to other areas, such as research and development, administration or marketing, you feel like there's not enough time to take on new clients.

10. You have a hard time justifying your rates to yourself, much less your clients.

If some of this sounds familiar, don't worry -- you've got plenty of company. This is exactly the type of business model that many coaches start their business with; unfortunately, a good number of them go out of business with it, too. At best, you'll have to work exceptionally hard to produce even moderate results; at worst, you'll burn yourself out  trying.

And that's no way to get the best of yourself in business!

You need to shift to a business model that increases your cash flow and profits, expands your capacity to take on new business with ease and attracts better-qualified clients.

More about THAT next time! Until then, I leave you to ponder this question:

What's your business model done for you lately?

P.S. Read the follow-up article to this post here.

Comments

[Anne Maybus]

What a great post. I have just found your blog (Pink Apple is to thank for that) and I love it. This article is well worth reading for everyone in business.

[Kathy Mallary]

Thanks, Anne!

And by the way, I was poking around YOUR blog and found Confidence in a Box -- I love it! Will definitely tag a couple of folks with that one.