A few years ago, I went to a meet up for new entrepreneurs in LA, and we each went around the table introducing ourselves and our businesses.
“I’m Amy, and I help women use their passions to make a difference, usually through starting purposeful businesses, and I do it all through a feminist lens.” (If this is your first time here, hi!)
The woman across the table from me said, “I’m Allison, and my business is travel.”
I love to travel, so I was intrigued. “Oh, like a travel agency?” I asked.
She blinked at me, insulted that I hadn’t adequately understood her brilliance. “Travel,” she repeated slowly. “I do travel. Like on Instagram?”
It was my turn to blink. The words she was saying made sense, but not in the order in which they were arranged. My mind was racing. I didn’t want to seem stupid or inexperienced, but my strategic brain couldn’t quite put the pieces together, so I blurted out:
“Yeah, but how does that make money?”
Turns out I wasn’t the weird one—she hadn’t figured that part out either.
We talked a bit more, and I found out that she had a deep passion for helping people expand their consciousness by seeing different cultures and environments, so she had started an Instagram account devoted to showcasing photos of people getting out of their comfort zones while traveling.
She was deeply creative, passionate, and had a huge impact to make on the world….and no idea how to monetize it.
Just like Allison, most creatives have the passion, the talent, the big ideas…and no idea how to make it a career. Though I didn’t know it at the time of that meet up, transforming passion and purpose into an actual job is kind of my super power.
In this post, I’m going to share exactly what you need to think about if you want to turn your passion into profit.
So let’s talk about one of the most important—and most overlooked—aspects of starting a sustainable business that does good in the world: making money.
As a conscious person, I have a weird relationship with capitalism, and chances are, you do too. The work I do feels way more like a calling than a job, so it can feel strange to ask people to pay me for my gifts.
If you have any money weirdness, I hear you, but you gotta eat. Think about how many more people you can reach with your brilliance if you’re not struggling financially. If they need your gifts and your message, it’s your job to get over your money blocks so you can actually be of service.
If you want to start a business that both helps people AND fills your bank account, you need to have two big things on lock: your business plan and your business model.
What’s a business plan?
A business plan is basically a document that describes what your business is, what it does, what your goals are, and how you’re going accomplish them, along with any legal and financial stuff needed for the specific business in question. It's the framework for your entire business and a great place to start or revisit every few years. For an in-depth tutorial on how to write a creative business plan (and a free template), click here.
What’s a business model? How is it different from a business plan?
A business plan is just that: a plan. It gives a general overview of your specific creative business, coaching business, purposeful business, etc + where you're going, and how you plan to get there.
A business model is a proven strategy for how the business makes money.
While you are certainly welcome to make up your own creative business model from scratch, it is way quicker and easier to get started with an already-proven business model and then customize as you go.
Why do you need a proven business model for your creative business, coaching business, or heart-centered business?
What if I told you that building a successful business isn’t actually that hard?
Yes, you may have to learn how to network or confront some fears, but it's actually ways easier than people make it out to be. There’s this huge fear among new entrepreneurs that leaving your job to start a business is just too risky. “Most businesses fail in the first year,” they’ll shake their heads and say. This is true, but it’s not because building a business is hard…it’s because people don’t make a plan that’s proven to work. A business model is basically just a plan that’s proven to work.
Because without a plan for how you’ll make money in your business, you’re going to spend a long time in the “throwing spaghetti at the wall and see what sticks” phase.
This phase is important, and often, a necessary stop on the path….but you can seriously shorten the time you spend flailing around by putting a smart plan in place.
A business model is just your plan of how you’ll make money from what you love. It’s okay if you have no clue how at this moment. Lots of other brave people have come before you and made maps. Instead of reinventing the wheel, let’s use one of the maps that other people have pioneered.
What are the best business models for creatives, coaches, and other helper-types?
The top three business models are offering services, products, and information. Let’s break down the advantages and disadvantages of each.
Business Model #1: Offering Services
You probably know this model really well. This is your hairdresser, graphic designer, massage therapist, doctor, tarot card reader, life coach, etc. They have a skill that you need, so you give them money to perform a service for you.
Let's look at my business model, for example. When I was first starting my coaching business, I knew I wanted to empower women somehow, but I didn't know how "empowering women" made money, so I sat down with a coach and sorted through my skills. Turns out, I have a teaching degree, a professional coaching certification, and lots of experience helping women wrangle their ideas into action, so I decided to offer coaching as a service and work with people one on one. People give me money, and I give them coaching in return. I teach courses as well, but when I was first starting out, I specialized in services only.
It's really easy to get started and make money fast because you don't need a giant audience or infrastructure in place—just a few people who want the service you have to offer.
Referrals: when you provide someone with an amazing service, they usually recommend you to their friends, so as long as you're doing good work, it's easy for your network to grow via word of mouth.
You're effectively trading dollars for hours. In the example of my business, I'm meeting with clients over Skype, and since I only have so many hours in the day, I can only take on so many clients at a time...which means only so much money. While you can up the price of your service offerings, your income will still be limited by time. (That's why I've branched out, but more on that later)
How to Get Started:
Figure out what skill you have that someone will pay you to do (ie coach them, teach yoga, cut their lawn, perform Reiki, etc) and figure out how to communicate the value of that skill. Begin to build out packages for your services and share them with people. (I can help you with this)
Business Model #2: Offering Products
This is another really common option, and it's what most people think of when they think "business." Think about your favorite grocery store, bookshop, or clothing retailer. They have some product you want, so you give them money and they give you the product.
In the example earlier, I shared that I wanted to empower women, so I chose the coaching route, which is service-based. I could have just as easily chosen the product route and thought, "I want to sell products. I'm going to start an ethical fashion line and sell jewelry made by artisans in developing countries." I would still be using my passion of empowering women, but I'd be doing it by selling a product.
It's really, really simple to explain what you do. With some of the other business models, education can be a learning curve. For example, I have to make sure prospective clients understand what coaching is before they want to hire me. When you sell products, it's easy to point to the product and say, "I'm selling this. Do you want to buy it?" With most products, customers are already of aware of the product's existence and even their desire of own it, so the sales process can be easier than other models.
The logistics can be intimidating. You have to deal with stuff...like literal, physical stuff. In the example of the jewelry line, you'd have to actually get the materials for the jewelry, lead the team of artisans, store things in a warehouse, get a storefront (or online storefront), and ship orders to people. Plus, there's often a cost to manufacturing your products, which can cut into your bottom line.
How to Get Started:
Make or procure several of the products you want to sell and host a pop-up shop, either online or IRL and see if people buy what you're selling. Test and tweak where needed and then create a plan or system for the logistics piece.
Business Model #3: Offering Information
You've probably experienced this business model without even knowing it. In this model, you sell information, education, entertainment, inspiration, or some other intangible thing that people want.
A long time ago, before the internet was a thing, you could only learn new stuff by reading books or going to school. Now, tons of people have careers where they sell their knowledge or experience online.
An excellent example of this is the blogger who sells online courses. Let's go back to my idea of empowering women...I really love fashion and helping women dress in a way that makes them feel confident. I could create an online course or ebook where I teach women how to shop for clothes that make them feel like the best version of themselves. Or, I could get an agent and become a motivational speaker, selling my informational and inspiring talks on fashion and self-love.
Remember our friend Allison from the beginning of this post? She ended up monetizing her business by teaching an online course on how to travel on a tiny budget. She made money by teaching people and offering her knowledge in an easily digestible way.
Hallelujah for passive income! Theoretically, you can create a course or talk or book one time and then sell it or teach it again and again and again. While the promotion process isn't passive, it is possible to create one thing that you sell to tons of people rather than trading time for dollars.
The ramp-up process is slow unless you already have a big audience. A great example of this is Danielle Laporte, a coach who teaches the concept of Core Desired Feelings (one of my favorite things ever). She speaks, writes, and sells her meditation bundles online for around $30 each. This works for her because she has a HUGE audience, so $30 X lots of people = lots of money. If you go this route, you'll need to lay the foundation for a big audience before you'll start seeing the moolah.
How to Get Started:
Get your business plan tight and start building your audience. Have a crystal clear idea of what information you're selling and what form you want it to take (like a course, book, etc) so that you can become the go-to person for that topic. Then, get out there and build a following, either on social media, via an email list, etc. The big idea here is: make sure your brand foundation is solid and then get in front of lots of people.
When I'm starting a business, how do I know which business model to choose?
All options are valid. The trick is picking a monetization method that 1. you enjoy delivering and 2. your Ideal Customers need or want. Finding that intersection is the most important part of monetizing your magic. Basically, for a business model to “fit” what you want to create, it’s gotta fit you, it's gotta fit the people you’re trying to help, and it’s gotta get results (ie make money).
To find your proven business model, consider the following:
- Who's my business role model? Who do I want to be like?
- How do other people with similar businesses monetize their work?
- How will I validate my ideas, i. e. see what works and what doesn't?
Once you've found the intersection of what you love to offer AND what your customers/clients love to buy, you now get to test it out and validate your ideas. You may think you love offering a certain type of product or service, but you won't know for sure until you try it out and see. Same thing with what your clients need. At some point, you've got to put it out there and test and tweak till you find the right intersection for you.
What if I want to combine these business models and do more than one?
Of course you do, you overachiever, you! And it’s really natural to want to branch out and expand your business model in order to get the best pieces of each. If you’re already rocking one model, go on with your bad self and add another to the mix. If you’re brand new, start with one so you can gain traction (and dollars) right away.
When it comes to business models, what should I really pay attention to?
Testing and tweaking. Make the right choice for your life right now, and build as you go. Bottom line here: building a successful, sustainable business that truly makes an impact? It takes time and strategy, but you can get there much faster if you use a proven business model. All of these models are extremely effective when you put in the time and effort, so pick the right one for you.