What are the best business models for creators? If you're dreaming about starting your own business, you'll want to make sure you find the right business model that will help you achieve success. Selling a physical product for money is a valid and popular business model, but it's just one of several different types of business models out there. In this article, we're going to share all the information you need to understand what a business model is, the components that go into a business model, an overview of the best business models for creators right now, and how you can build an effective business model that will work for you.
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What Is a Business Model?
A business model is a strategy a business uses to make a profit. Simple enough, right? It includes things like how your business plans to deliver value to your clients at a price they're going to be willing to pay, which products or services you're going to sell, who you're going to sell them to, and what costs you'll incur during the course of running your business.
No matter what your business, or how large, you'll need to develop a business model and review and update it regularly. This helps you stay on top of trends and address concerns before they become problems for your business. A solid business model is also important if you're planning to court investors and want to convince them of your business's viability.
Business models typically break down into three parts:
- Production: raw materials, design, manufacturing, and labor
- Sales: marketing, sales processing, distribution, and service delivery
- Payments: pricing strategy, cash flow, payment methods, and timing
What Does a Strong Business Model Need?
A complete business model is built on a strong value proposition. A value proposition is a summary of what you do and why a customer would choose to buy your product or service. It clearly communicates the benefit to customers of doing business from your specific business and purchasing your specific products and services. This is where you touch on your customers' challenges and pain points that your products and services can resolve better than any of your competitors.
Beyond that, you'll need to include important information about possible partnerships and opportunities with existing businesses. And, as we mentioned earlier, you'll need to consider the cost of launching your company, how it will be financed, who you're targeting, and how you'll reach them.
Best Online Business Models for Creators
Now that you have a better understanding of what a business model is, it's time to explore the best online business models for creators in 2021.
As you can probably guess, the COVID-19 pandemic had a huge impact on how businesses were doing business. Companies that weren't online had to get online quickly in order to stay profitable and companies that were already online had to figure out even more ways to set themselves apart from the influx of competitors. What we found out is that there's nothing quite like a global pandemic to digitize industries.
While in-person business isn't going anywhere, it's important for creators to embrace the path of least resistance when it comes to starting and growing a business. That means doing it online. And while eCommerce may be the first business model that comes to mind when you think of online business, it's nowhere near the only option creators have. We'll talk about starting an eCommerce store in a bit, but for now, let's take a look at some of the other best business models for creators in 2021.
If you enjoy writing, and you're good at it, you can become a paid freelance blogger for any number of businesses. The investment required to get started with the blogging business model is really low, but you'll definitely be spending a lot of time writing and pitching content. Blogging also requires networking and building relationships, so consider the time you'll be spending on that, too.
If you don't want to blog full-time for other people, you can always combine blogging with any other business model we cover here to grow your earnings exponentially. For example, blogger Adam Enfroy uses his blog combined with affiliate marketing to bring in tens of thousands of dollars every month.
2. Membership Sites
Membership sites are a business model for creators who are interested in building a community. Membership sites are easy to scale and work well for creators with small to larger followings. Members come to these sites to get access to exclusive and valuable information and promotions. Investment-wise, membership sites are pricier than blogging, but still not a huge investment. Time-wise, you'll be spending a lot of time creating exclusive content and value for your members. They also have great potential as a recurring income stream.
More and more creators are turning to podcasting as a business model, and with good reason. According to Edison Research and Triton Digital:
- The number of podcast listeners has grown 29.5% since 2018.
- 56% of all Americans, aged 12–34, listen to at least one podcast per month.
- There are 10 million more weekly podcast listeners than Netflix account owners in the U.S.
You're probably thinking that podcasting is expensive to get started, but it really isn't! You don't need state-of-the-art equipment to create a high-quality podcast. For the longest time, fitness influencer Chalene Johnson started her podcast on her iPhone. These days, she has a nice podcasting setup, but her podcast sounded great from the start.
Podcasts are also another business model that scales well. No matter how many listeners you have, you're creating the same episode for all of them. If you want to, you can even combine podcasting with a membership or subscription-based business. That might mean creating additional, exclusive content that's just for your paying subscribers. Sites like Patreon, Buy Me A Coffee, and others make this really easy.
4. Online Courses
Online courses can be quite a profitable business model for creators. Like podcasts and membership sites, you're going to be spending time creating the content, so they can be labor-intensive. However, once you have your course created, you only have to worry about updates. This makes them a great option for a recurring income stream. Like most of the best business models for creators, online courses can be combined with a number of other business models to create a powerful business with multiple income streams.
There are several online learning management systems you can use to make creating your course a breeze. For additional support, check out our guide to creating and marketing your online course.
5. Productized Services
If you've never heard the term "productized services" before, you're in for a treat. Productized services are services packaged and marketed to a specific target customer. They're intended to focus on a single problem for a specific audience and offer standardized elements that help you provide the services as quickly and easily as possible for a set price. So, instead of getting a custom quote for services, a customer can buy a pre-packaged service from you, just as they would a product. Since you're not offering individualized services, this business model helps you generate revenue easier. Of course, you're still going to have a time investment to create the end result.
6. Coaching or Consulting
In a coaching or consulting business model, creators make money by offering guidance to others. You can turn just about anything into a coaching or consulting business. If you're a great copywriter, for example, you can offer coaching to other copywriters who might not be as skilled or experienced as you.
It's easy to get started with coaching or consulting, but coaching individual customers is time-consuming. That means that this particular business model doesn't have quite the scalability as others on our list. You only have a certain number of hours in each day, after all, so you're limited in the number of customers you take on. To combat this, you might consider offering group coaching so you can provide services to many customers at the same time.
7. Affiliate Marketing
Affiliate marketing can be one of the most profitable ways to generate income from your blog. We've already talked about Adam Enfroy who makes tens of thousands of dollars every month from affiliate marketing on his blog. Pro Blogger is another site that brings in more than $100,000/year. And there are countless others.
This business model is simple to understand. You, the affiliate marketer, sell products on behalf of a brand and earn a commission for each sale. You'll use a number of marketing channels to promote products to your audience, from your blog and website to social media platforms. Many influencers earn income from affiliate marketing and it's a great way to use the audience they already have.
Join an affiliate network to find the products and brands you want to promote!
8. eCommerce Stores
The last business model we're going to cover here is establishing an eCommerce store. No matter your industry or niche, getting started in eCommerce is easy and relatively inexpensive. Within this business model, there are several sub-models. For instance, you could start a dropshipping business if you don't want to worry about storing inventory or order fulfillment. There are quite a few things to consider with this business model, so be sure to check out our guide to starting an eCommerce business.
We recommend using an eCommerce platform to build your online store. There are several eCommerce platforms that make it easy to build and promote your eCommerce business with drag-and-drop page builders, email marketing integration, abandoned cart recovery tools, and more.
How to Develop an Effective Business Model as a Creator
Now that you have a better idea about a few of the business models you can use as a content creator, it's time to dive into developing an effective business model of your very own. Your business model is unique to your business and will provide you a long-term guide to growing your business. Here, we're going to walk you through six steps to building your business model as a creator. It's important to remember that your business plan is a living document—you'll be revisiting it regularly and making updates and changes as needed to ensure continued growth.
Identify Your Target Audience
The most important step in the process of creating a business model is to identify your target audience. This helps you focus on the potential customers who both need and want your products and services. While it might seem counterintuitive to make your audience smaller, a focused target audience ensures that your marketing messages are targeted and hit the mark. When defining your target audience, you'll want to consider the solution you offer, the pain points your products or services solve, your target demographic, and more.
Choose How You'll Operate
What type of business will you have? Are you going to be selling physical products, providing online coaching services, selling courses, or digital products? Make a list of your fundamental business activities.
Create a Powerful Value Proposition
A value proposition tells potential customers why they should do business with you. The best value propositions will let your audience know why your business is better poised to solve their pain points than your competitors. You absolutely must know, and be able to convey, what sets you apart from your competitors. It can help to come up with a list of values and link those to your products or services so you can figure out how you can provide the best value to your customers.
Build a Growth Strategy
You could have the best business model ever conceived but if you don't have a plan to generate demand, market, and grow your business, you're not going to succeed. When creating your growth strategy, consider how customers are going to discover your business. Once they know about you, what do you want them to do next? Your growth strategy will provide a customer journey that you can then use to create paid and organic content to bring customers in and get them to convert.
Identify Key Business Partners
Another important step in building a strong business model as a creator is to identify and leverage key business partnerships. This could be suppliers, advertisers, influencers, and complementary businesses whose audience overlaps with yours. The purpose of developing business partnerships is to provide more value to your customers, expand your reach, and increase brand awareness.
Track Company Resources
The last step in building a business model as a creator is to consider what you need every day to run your business, from finding new clients to carrying out your core business activities. Company resources will be different for you depending on the business model you're using but it can include things like business capital, intellectual property, your client list, and more.
Using the Best Business Models for Creators to Grow Your Business
By now you probably have a few ideas of how you want to adopt and adapt the business models we've shared here to create your own unique business. It's important to do your research into each model and compare them to what it is you want to achieve with your business. And don't be afraid to test things out! The wonderful thing about online business models is that it's easy to shift gears if something is working the way you want it to. While it's best to find the right business model or models and stick with it, it's not going to be the end of the world if you decide that affiliate marketing isn't for you and instead pivot to focus on creating and selling online courses.