Let's get to it -
What business model are you choosing for your business?
Business books stress 'You Must Have a Business Plan' when you start your business. The problem with this idea is it's made to appear this should be some big thick 300 page cracker you'll do once and that's that.
Of course they miss the most important part: Finding out if there's enough people interested in what you want to sell! Believe me, I know about the 'perfect business plan' and diving head first into a lousy market!
Starting a business, solo or otherwise requires more than an idea with 25 PowerPoint slides and "historical" sales projections. Recently while writing a business overview guide, I came across a few examples of working business models.
If you have no idea what a business model is and why you would want one, here's an explanation (about time?!) I found on the Digital Enterprise website:
A business model is the method of doing business by which a company can sustain itself -- that is, generate revenue. The business model spells-out how a company makes money by specifying where it is positioned in the value chain.
What??! It's how your business will make money consistently for a very long time. Picking a model is where it gets a bit more complicated.
It takes effort to start and operate a profitable business. As a solo entrepreneur you know it takes more than getting a business license or throwing up a website to create a profit making business.
Robert Ringer shares one type of business model that I see many new to how a business works start. One look around the Internet and you'll see plenty of these - Hiccup Business Models. Here's what Robert had to say about this model:
What makes a company qualify as a hiccup business is a flawed business model. It’s a model that requires selling a product or service to the masses at artificially low prices in order to maintain unrealistically high sales and razor thin profit margins.
GS: A quick example would be selling a $7 product. Keeping it simple with $1,000 a month overhead (living indoors, eating food, etc) on a monthly budget of $1012, you need to sell 145 products a month and with absolutely, positively No Returns! Miss one or two sales a month and your business model falls apart. Sounds too much like a "Maalox Moment' to me!
Another example comes from Michael Masterson and describes the preferred method of many solo entrepreneurs who are working full time jobs - Chicken Business Model.
A person who somehow manages to start and grow a successful business but who is unwilling to take any risk. I call such people chicken entrepreneurs because they are so extremely risk averse.
If you're reading this blog, you are looking at an example of a chicken entrepreneur. Debt is not my idea of a good time and solo entrepreneurs who have had "brick and mortar" businesses feel the same way.
For those of you wondering about online business models? Here's a jiffy quick video that shows one business model others are using and that are working online. You'll need to give your email address to access the others, and they are marketing a membership for access to other products they sell but it is worth a look: Free Business Model
No matter which model feels right to you, it still comes down to good old elbow grease, spit and Duct tape. You pick what is going to get you where you want to go, roll-up your sleeves and get busy.
Subscription Newsletter Update
This is weird but understandable. I received an email asking why there will be a paid version of the Solo Gazette instead of letting everyone have the information free on the blog?
Here's my answer (and yes it's long winded - so sue me!): Because a paid newsletter appears to be the best model to help solo entrepreneurs committed in creating a lifestyle business survive during their critical first year.
According to the US Census and Fortune magazine, the odds of surviving that critical first year for many who start out creating a home based business are really low.
How low? Out of 100 solo home based businesses that start this year, only 38 will make it to their first year anniversary?
Calvin, I hope that answered your question.
Resources You Can Use
One resource I have for you is available for immediate download that you will want to print and read with a pen in your hand. It's a freebie but don't let that stop you. Sometimes the worth you get from something is what you put into it, not the price.
You know I have a thing for Seth Godin (bald, smart and a solo entrepreneur! What's not to like?!)...the Bootstrappers Bible can help you focus and take a bit of the shine off your rose colored glasses.
These links will give you a different take on becoming a solo entrepreneur and if you've started, help you keep going.
Small Business Forum
Up and Running Entrepreneur
Home Office Voice
Small Business CEO
As always, take what you can use and leave the rest.
That's it for today and I leave you with this:
"Don't wait for extraordinary opportunities. Seize common occasions and make them great. Weak men/women wait for opportunities; strong men/women make them." ~ Orison
Swett Marden
