The. Breakthrough. Guide to Building a Profitable. Online Business Model. By: Kayla M. Butler ivorymix.com
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1 The Breakthrough Guide to Building a Profitable Online Business Model $ By: Kayla M. Butler ivorymix.com
2 to Building a Profitable Online Business Model About Hey there future business owner! Thanks for downloading this breakthrough guide. Prepare yourself! You re going to have some Ahah moments about building a profitable business model. So what is a business model and what do you need to know before you get started? A business model is the map for turning your business idea into products and services, finding clients, and making money. When going through this breakthrough guide, you will need a calculator because we re going to do some financial planning. I know, sounds fun right? Seriously though, in order to even consider creating a profitable online business, you should be comfortable with calculating financial data. You do not need to be a math whiz though. I will explain how to do each step in a very easy way! One of the first things we will determine is how much money you need to earn in order to make this business your full time gig. This may seem backwards and you may be asking shouldn t I be thinking of some products or services first? Trust me, we ll get to build your products and services in a few pages. We re doing this first because people often forget to pencil out if their business model is even feasible before they even start. Don t fall into the trap of gimmicks and pretty blogs. People can get so focused on their ideas and their products that they forget to determine how many sales they need to be successful and really make it. Here is the order we re going to build your business model: 1. Determine your Necessary Business Earnings. 2. What potential products and services you can sell? 3. How much can you sell your products and services for? 4. Will those pricing structures work in the market and will they meet your business financial needs? 5. Who is your customer? 6. Where can you start making contact with your customer?
3 to Building a Profitable Online Business Model Determine Your Necessary Business Earnings On each line below, write in how much money you believe you need in order to quit your current job and become a full time business owner. This is going to tell you the minimum amount of money you need to make every year, every month, and every week heck, even every hour in order to be a full time business owner. #1. How much do you need to make annually? (On the line above, fill in exactly how much you think that you would need to make every year in order to pay your bills, eat, and have a little extra for savings and to grow your new business) #2. That means you would make an average of every month. (Divide the annual number from line #1 by 12 months and put that on the line above) #3. That means you would make an average of every week. (Divide the annual number from line #1 by 52 weeks and put that number on the line above) #4. Your hourly rate would be (Divide the number from line #3 by 40 hours and put that number on the line above) CONGRAT S! You now know how much you can charge for hourly service work which is great for freelancers and creators! This list should be your first Aha moment, and you know what? You can use this very simple method every year from here on out. As your business grows, so will your expenses. So, make sure you keep a running list of expenses and bills so you can properly update your necessary business earnings.
4 to Building a Profitable Online Business Model Products and Services Services are usually charged by a business s hourly rate, plus the cost of material, and a little mark-up included. A mark-up is when a business owner adds a small profit on the cost of material used for a project. This could range greatly, but could typically be anywhere between 12% and 50%. This is done so that you get paid for your time and that your expenses get covered. Expenses include more than just material for a project. They can include things like business insurance, office rent, and computer equipment. You wouldn t charge one client for all of your business expenses, but you would average out your costs across all of your sales. Product pricing can vary greatly depending on supply and demand and are not always determined based upon the hours that it took to create it. For instance, a product you could sell might be an Ebook. It may take you 70 hours to create but it is very unlikely that anyone will pay you 70 hours of your hourly rate for one book. So, how do you price a product? You can start with how much it cost you to make it, but you ll also want to consider how many people might buy it. If you made that 70 hour Ebook and charged $10 for it, but only marketed and sold it to 1 person, then you just lost a bunch of your time and made no real money. Or, you can price it at $10 and have 1000 people buy it because you shared it via twitter, Pinterest, and Instagram over a 2 month period of time. Sounds much better right? You see, having an idea of how many times you can sell your product will help you determine how much to charge for it. If your product is digital, charging a little less is easier knowing you can potentially sell it forever. A crafted handmade product is different. You will definitely want to consider charging for your time and material. With both products and services, I always recommend that checking out the competition and starting there. Once you have a good idea for the quality of product and how much they are selling it for compared to your awesome stuff, you should start to have a better understanding of what to charge. So, let s get started.
5 Describe your potential customer, where they shop, hang out, and what they like: Describe your Service #1: How much does it cost to make? Where will people buy it? Who s my competition? What do they charge? Is my service better and should it be priced more or less? Considering all of the above, how much could I charge for Service #1? Describe your Service #2: How much does it cost to make? Where will people buy it? Who s my competition? What do they charge? Is my service better and should it be priced more or less? Considering all of the above, how much could I charge for Service #2?
6 Describe your Product #1: How much does it cost to make? Where will people buy it? Who s my competition? What do they charge? Is my product better and should it be priced more or less? Can the cost to make this product be divided among multiple purchases because this product is digital like an Ebook? Considering all of the above, how much could I charge for Product #1? Describe your Product #2: How much does it cost to make? Where will people buy it? Who s my competition? What do they charge? Is my product better and should it be priced more or less? Can the cost to make this product be divided among multiple purchases because this product is digital like an Ebook? Considering all of the above, how much could I charge for Product #2?
7 to Building a Profitable Online Business Model Sales Forecasting You re really making headway! Now that you have a list of potential products, services, and how much you might charge, you are able to determine how many sales of each you will need to make during the weeks, months, and during the years that you are in business. Let me illustrate this in example: Based on the previous exercise, my product #1 will be sold for $100 and I also previously determined that my weekly sales goal needs to be $1000 a week in order to make my necessary annual business earnings. Using those two figures, I can see that I need to make 10 sales of my $100 product #1 every week in order to reach my sales goal of $1000 a week. ($1000 divided by $100 each = 10 items to be sold) Now that you potentially have 2 products and 2 services, you could sell a little of everything all week. The question is, do you have the time and resources to sell that much of these items? Let s check it out: Product #1: Step 1 How much will you charge for it? Step 2 To make your weekly sales goal, how many do you need to sell? (Divide the total from Step 1 by your weekly sales goal) Step 3 Do you have enough hours each week to sell the quantity from Step 2? Yes or No If you answered no, then you may need to limit your quantity available for sale so you don t over commit yourself to clients OR you may need to raise the price so you don t have to sell as many to make your weekly sales goal.
8 Product #2: Step 1 How much will you charge for it? Step 2 To make your weekly sales goal, how many do you need to sell? (Divide the total from Step 1 by your weekly sales goal) Step 3 Do you have enough hours each week to sell the quantity from Step 2? Yes or No If you answered no, then you may need to limit your quantity available for sale so you don t over commit yourself to clients OR you may need to raise the price so you don t have to sell as many to make your weekly sales goal. Service #1: Step 1 How much will you charge for it? Step 2 To make your weekly sales goal, how many do you need to sell? (Divide the total from Step 1 by your weekly sales goal) Step 3 Do you have enough hours each week to sell the quantity from Step 2? Yes or No If you answered no, then you may need to limit your quantity available for sale so you don t over commit yourself to clients OR you may need to raise the price so you don t have to sell as many to make your weekly sales goal.
9 Service #2: Step 1 How much will you charge for it? Step 2 To make your weekly sales goal, how many do you need to sell? (Divide the total from Step 1 by your weekly sales goal) Step 3 Do you have enough hours each week to sell the quantity from Step 2? Yes or No If you answered no, then you may need to limit your quantity available for sale so you don t over commit yourself to clients OR you may need to raise the price so you don t have to sell as many to make your weekly sales goal. Final Review Look at what you ve accomplished! You ve determined how much you re business needs to make each year, month, and week. You ve outlined what your clients and customers look like. You ve established some potential products or services you can sell. You ve even determined how much you might sell them for. You ve also looked at exactly how many of each you might need to sell each week in order to keep your business going and growing! YOU JUST CREATED A BUSINESS MODEL. You are amazing and I am so proud of you for getting all the way through this brainstorming session for your creative online business idea. It can seem overwhelming at times, but I promise that with the right amount of work, the right attitude, and the right services and products, that you can make your business come true. I believe in you!
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