Prefer to listen rather than to read? This essay is also on the podcast here.
Crafting your business model (building block #3) is based on what you uncovered in building blocks 1 and 2. You can go back and listen to those episodes or read those essays from previous weeks if you missed them.
Once you understand what your business needs to earn based on its expenses and what you need to pay yourself, and you understand what your clients’ true needs are and what your own strengths are, you can take that raw material and move on to building block 3: Figure out your best business model.
Since “business model” can be a vague and jargon-y term, let’s define it: a business model is simply the way your business creates and delivers value and brings in revenue based on that value. It is the container of how you serve your clients. (The revenue piece is key, because you can create and deliver value in all kinds of ways that don't have a monetary exchange, but a business creates revenue).
When people start thinking about business models I’ve seen one of two things happen, either they constrain themselves to “how things have to be done” and don’t realize that there are vastly more options available to them, or they get so excited about the gajillions of possibilities that they get into analysis paralysis and can’t commit to one and move forward.
Something that helps people at both ends of that spectrum is remembering that businesses are always evolving. You will not find any business that has been around for a while which is still doing things exactly as they had planned to on day 1. (If you do find that business, they might be shuttered by now!)
Instead of falling into grooves around one-size-fits-all or analysis paralysis- or I would add- grass-is-greener-itis (in this case the grass is always greener in a different business model) from the magnitude of options, remind yourself that every business has its own path. You’ll try something out, see how it goes, learn, and iterate from there.
Deciding on a business model is a place to start. It does not need to be perfect, and you can’t fully know how it will go until you put it out there. How a model interacts with the clients’ needs, your strengths, and the revenue needs your business has will only become truly apparent by doing the thing.
Here are some examples to give you an idea of what I mean about how building blocks 1 (the true revenue needs of your business) and 2 (your clients’ true needs and your strengths) then get plugged into determining your business model:
Let’s say someone is an occupational therapist who works with children and adolescents with learning disabilities.
In this case, a private practice is a common business model: The way this therapist creates and delivers value to their clients is by meeting with them one-on-one for therapy sessions. Clients pay to receive a session of therapy.
If this therapist has strengths in relating, empathy, and working one-on-one that’s a great choice. They would then just need to do the math and make sure that the number of people they can see in a week (without burning out), and what they can charge per session works for their particular financial goals.
And I want to just note here, that many of you probably do have a private practice model. Sometimes, when listening to information about crafting business models, it can seem like the straightforward private practice model is being pooh-poohed a little bit. So I want to be clear- I think this is a GREAT model. Just because there are a ton of options for how you deliver your services does not mean you need to fix something that isn’t broken.
If private practice works great for you and your clients- as it often does in service providing businesses- fantastic! You can focus on other things, like how you make the numbers work for you with the right amount of downtime. Or you can focus on how you onboard new clients, or how you deliver sessions; Little fine tuning within the model of one-on-one private practice sessions.
Going back to my occupational therapist example: If that therapist is looking for a change from delivering one-on-one sessions as their model, and they have more strengths in leadership and are more suited to a CEO-type role (they love creating a company vision and managing people to do their best work) they might consider starting a therapy group and focus less on delivering therapeutic sessions, and more on growing a team of therapists, and growing a brand which is well known in this niche.
Financially, this changes the math. How much do you need to bring in in order to pay employees? How do you pay the other therapists well, while also meeting the salary you know you need to pay yourself? What additional costs are there now for the brick and mortar space?
Same example, different model: If the occupational therapist has more strengths in being influential via public speaking and teaching, perhaps they are on track to teach online courses, write a book, and go on public speaking tours. Financially, the math changes again in this one-to-many model. How many leads need to know about your online courses, book, and public speaking events in order for you to pay yourself the salary you need? The volume of attention- aka leads- your business will need in this model is much larger, but if you have strengths in marketing and shining your authority in your field, the rewards can be larger too.
One service, many options, many variables.
Let’s take a different service-providing business: say a nutritionist and personal chef. Their strengths make them more of a craftsman who likes to get “in the zone” when cooking and they don’t love the relational piece with clients. In this case, maybe they work in people’s homes while they are out at work, getting paid to prep meals for the week in the client’s kitchen and leaving them in the fridge for when they get home.
Or they could start a productized service and get their own professional kitchen, posting a menu for the week that people can order from on Wednesday and pick up their week’s worth of meals every Monday.
If instead they are a nutritionist and personal chef who loves to connect with clients by helping them with their relationship to food, they might choose a private practice model, or teach a signature online course, or host an online community so that they can lean into their strengths of relating and educating. (And of course, the type of relating is going to be quite different within a one-on-one private practice, versus an online course, versus an online community…)
Again, in the case of this nutritionist and chef, once the business model ideas are flowing, they would then need to then get grounded in the math and make sure the numbers work. In order to bring in the revenue they know they will need from building block number 1, does this idea work? Or does it mean they need to start getting into fantasy numbers, like cooking for one thousand clients per week? (No thank you!)
I hope glimpsing the myriad of business model options has you thinking creatively and enjoying playing in the possibilities. Remember you want a business you love, which is meeting a true need your clients have, and which produces the revenue it needs. This is how building blocks 1, 2, and 3 fit together to form the foundation of what you do.
Building block #3: action steps:
There is plenty to learn about what types of business models are available to you. If you're like me, and you've been in other spaces where you can be learning about loads of business models, or you're familiar with people who are teaching you one kind of business model as if it will be the answer to everyone's prayers, (which obviously, full disclosure, I don't believe that there's a singular one-size-fits-all perfect business model for all people, which is why I teach this in a figure-it-out-for-ourselves way).
Point being, there's a lot of information out there and there are a lot of models. It's more than I can cover in a single podcast episode. So I'm not going to list every option that exists, though I do intend to do a series of interviews with people who are business model experts- so stay tuned for that for more granular information on models.
However, you can begin sorting out what is and isn't a good fit for you through some really honest, stream-of-consciousness writing.
Regarding all the things related to your business, and all potential things you think you should do, or potential things you want to do but can't find a route towards, make a list. Think about all the tasks that you have to do in your business in a regular work week and work month. Also think about all the potential things that are always there in the back of your mind which you think you should be doing, or that you really want to do, but you can't find the time or you can't find a route towards them.
Start with the list. It does not have to be perfect and exhaustive.
Then I'm going to give you a couple more prompts to use with that list.
Before I do, the world is not this binary. So I'm not suggesting that we have to live or think in a super rigid black and white way. In fact, I would disagree with that. But these prompts are deliberately strongly worded to give you permission to write what you really feel. This writing is just between you and you, so go nuts! Be totally honest.
Look at your list that you've made for yourself about the things that you do in your business and the things that you think you should do and want to do. Then, going through each of item with stream of consciousness writing, write: I love...
This can be just a bullet point list or you can explain why. What are the things on that list that you love to do? It can be something broad, like "I love working with my clients in a session". Or it could be something more refined than that. Go through the list and tell yourself everything that you love about your work and everything that you love about what you might want to do, but haven't found the time or you're working on the skill level.
Then you're going to do the opposite: I hate...
We all have things in our work that we hate. So be honest about them!
I'm not saying that we need to pretend that there is a nirvana of self-employed life. I also don't think that's true. There's always going to be some part or parts of our jobs that- I wouldn't say that we have to hate them- but things that are probably monotonous, or are not our favorite... the stuff that needs to get done. So it's not that we're trying to be rigid and cut off anything that isn't absolute, utter joy and perfection. But if you make your list of, "I hate...", and just let yourself be honest, this is also where it's helpful for you to describe in a little more detail.
Why do you hate that? That's where you're probably going to see where there's places for refinement. To give an example from my Rolfing practice, I hate the amount of laundry I have to do. It's so silly. It's so simple, but honestly, I just hate all of the lugging of sheets. That doesn't mean I don't give people clean sheets (obviously), and it doesn't automatically mean that I drop off the laundry at a laundry service, but that is one option... Another option could be tinkering with my systems and processes around the laundry.
In your case. Notice the themes that pop up and then brainstorm from there how you might tweak your model to better fit your needs. How do you get to lean into more of what you love, and also just appreciate more of what you love? How do you prune or change what you hate? How do you do that in a way that where you're still meeting the needs of your clients?
Ask questions like:
What can you emphasize?
What can you pare down?
What can you get rid of altogether?
What can you delegate or outsource?
And if you choose to delegate or outsource, are you at a place financially where you can do that now?
Because that costs something, right? Or is that something that you just start adding into your financial planning for your business? If you want to delegate and outsource some piece, and it's going to cost a certain amount to hire someone else to do it. then the revenue goal needs change. But that's how you slowly, thoughtfully tweak and craft a business that you love more and more over time, rather than tolerating burnout.