This guide is written for digital content creators. It analyses how things work regarding online businesses and the multiple business models a content creator can leverage to generate income.
What is a business model
So, first of all, we are about to explain what a “business model” is to ensure everyone is on the same page. A business model is one of the keystones of a specific business and is closely related to who the customers of this particular business are, the types of products it offers, and its pricing policy.
Harvard Business Review quotes a passage of M. Lewis as the simplest of definitions:
The business model is how a company (or an individual) generates revenue, and you can think of a business model as a business blueprint or a combination of business blueprints. It answers the questions of who your target audience is and how you monetize it. To define the business model of a company, we often use categories like:
eBusiness. When a business’ operations and transactions with its customers take place mainly online. For example, an eCommerce store or a blog that makes money from ad placements.
B2B. Business to Business, meaning a company whose primary customers are other businesses.
B2C. Business to Consumer, meaning a company that mainly makes transactions directly with consumers.
Services. A company whose primary offerings are services.
Subscription-Based. A company that offers products/services for a subscription paid for a specific period (recurring).
High Ticket. A company whose products/services have high costs or require high accuracy. For example, a company that sells cars and the average deal size is significantly higher than everyday products. This term is also used as a synonym of “premium” when comparing similar products with a significant price difference.
To better understand this, let’s take a look at a few basic examples:
For example, when describing the business model of an online apparel brand, we could say that it’s a B2C eBusiness (or eCommerce) company selling clothing products.
Another example would be a pet supplies store, sending their products each month to subscribed individuals. So, in this case, we have a B2C pet supplies company using the subscription-based model.
And the last one would be a company that sells mesh-welding machines to manufacturing companies. In this case, we have a B2B company that sells high-ticket products to a particular niche of factory owners.
When you define a company’s business model, you’re trying to describe the business blueprint they follow in a few key phrases, their category, their offerings (products/services in conjunction with their pricing model), and their audience.
e-Business: How it works
To have a business running, you need two things. An offering(s) and the ability to receive money — from a legal perspective. For the latter, you will need to form a company under the law of your country or the state in which you are considered a legal resident.
For example, if you are a US resident, you can form your company in the State you reside or in another State. Law is not the field of our expertise though, so you will need to consult your lawyer or accountant.
Regarding your offering, this is where the meaning of your business’ existence lives in. It is the foundation on top of which your entire business and later your business’ brand will be built. It answers what you provide to society, how you can help others with their problems, and what you ask for in return.
Your business offering is one of the most critical factors to determine whether or not your business will be successful and its potential in terms of revenue.
As an example, looking at the primary offering of a clothing company, on the one hand, we have:
While on the other hand, there is price.
The same logic applies when it comes to building an eBusiness. Your offering will be the main factor to determine its success. Besides that, to launch and grow your business, you need to do marketing. And, according to AMA marketing by definition is:
Starting An e-Business
So to start a business — in its most simplified form — you create an offering (products/services), build an audience that is interested in your offering, and “pull” this audience into a place where the transaction can happen.
Finally, a percentage of this audience will eventually become your customers. The rate of your visitors that will eventually become your customers depends on factors like how appealing your offering is, how effectively you communicate it with your audience, and how engaged your audience is with your brand.
In the online world, this place is a website. It either belongs to you or to third-party companies that will allow you to sell your products/services, making a commission for each sale (i.e., Amazon for products, Fiverr for services, etc.).
So the simplified process would look like this:
1) You create an offering (it could be a really simple product or service at the beginning)
2) You communicate this offering to people that might be interested in buying it (marketing)
3) People visit your store, and a percentage of the visitors buy your products
In your case, you already have built an audience efficient enough to start with and further grow it with time.
When it comes to revenue generation, the way we look at things is that you need the primary income source on which you will allocate the most of your time and resources, and which will bring in the most of your revenue.
Still, you also need smaller income streams that will require less time and effort and will be adding small amounts of money, resulting in a respectful one collectively.
You first build your main business, and when this becomes stable, you start creating new ones.
The same logic applies to the offerings of your primary business (or the offerings of one of your businesses); you could start with a single but good offering and, over time, add more.
As an example of starting with a single offering, you can consider single-product stores, where the entire business turns around selling a single product.
Business Models for creators
The businesses, and the business models someone can follow or combine to generate revenue, are countless. Their success depends on the experience, budget, connections, and the overall ability of their founder to make it a success.
This section will explain the three most basic ways a creator can leverage their audience to generate income. Those can be combined under one business roof or implemented on multiple businesses (separating one from the others — different brands).
This is probably the easiest way for a content creator to start a business since the primary offering is the content. The concept behind a blogging business is the creation of — valuable to the reader content — offered for free.
The logic behind the monetization model is to attract an audience interested in a topic or a set of relevant between them topics and selling ad space (media space) to other companies. It requires nothing more than a blog website and the writer’s expertise on the topic. Once the blog has an efficient number of users, its monetization can happen instantly (for example, using GDN).
GDN - Banner Ads
The first way to monetize your blog is by displaying other companies’ ads (mainly) in the form of banners. The easiest way to do this is to use Google Display Network or use another similar platform or communicate directly with companies interested in the audience that reads your blog posts or a combination of both.
Native Blog Post Advertorials - Guest Posts
In addition to banner ads, another way to monetize your blog is by creating and publishing advertorial content (blog posts) for other companies or by allowing guest posts (the company produces the blog post, and you publish it on your blog).
This way of monetization would bring in most of the revenue that your blog will eventually generate (except for some cases where affiliate marketing wins this competition).
Depending on the niche (the very specific piece of the market) of your blog, companies may offer a particular amount of money (usually a percentage) for each sale that you assist.
For example, let’s say that your blog is in the beauty market with an audience of women age 25-45. Then let’s say that there is a beauty products brand that offers you 15% of every sale made on their online store if your blog referred the customer.
Depending on the market that your blog is in, this could be by far the most profitable source of income.
Considering that you’ve already built your personal brand, you already have an audience of fans that like and engage with you and your content, and that you can influence others buying decisions (besides that, other companies are considering you as an influencer), starting a business and offering your products to your audience, could be really profitable.
The budget needed for this type of eBusiness could be significantly higher than a blogging business, but the potential in terms of revenue is much higher as well.
Your starting costs would be your website, your products (if you decide to sell physical products and create stock), and your marketing budget (if you choose to run marketing campaigns in addition to your personal promotion efforts).
When it comes to creating your offering(s), it’s crucial to be able able to validate the demand for each. You must have a cost-effective strategy to test what type of products your audience likes (to buy from you specifically) and what is the price range they consider logical for these products. Feedback is your most valuable asset at the launch phase, and the best feedback you can get is sales and happy customers.
When deciding between product types within your niche, you have two main options:
If you decide to offer physical products, you can start small. It’s not necessary to create stock. You could choose to start with the drop-shipping business model, and after validating that you have enough orders in a certain period and that the demand is stable, you could proceed by creating your own stock.
If you have expertise on a topic and your audience is used to buying digital products, you could sell your expertise in the form of courses, guides, and ebooks.
The main benefits of offering digital products are zero or minimal cost of production, and thus, high margins (depending on the products, your expertise, and your niche). Also, you have absolute control over them, meaning that you can design and build your products to be as perfect as you want.
Brand Promotions On Your Social Media
This is a B2B business model since it implies that you sell your services and media space on your social channels, to other companies for promoting their products. It is one of the simplest ways of monetizing your audience since, in most cases, you are not required to provide an invoice for the services offered, and that you won’t necessarily need a website.
Although this might be a straightforward way to monetize your audience, the revenue potential depends on the number of inquiries you get and the number of them that will lead to a closed deal.
Our guide explains in detail what brands want from influencers and what you should do to get more inquiries in the first place and close more deals.
Suppose you are considered an expert in your field. In that case, you could sell your services online or use your website as the central platform to attract your potential customers and deliver your services in a physical location.
As an example, a personal trainer could serve their clients online by offering an online training program on their website. To name some of the benefits, those would be the reduced costs in terms of transportation expenses and time, on-time payments, and the extended audience they could serve since there are no location limits.
As an alternative, they could use their website as a lead magnet to attract interested people (by offering free training-related articles or dieting tips as an example), and capture inquiries.
Additionally, they could also sell digital products (for example, courses or guides) or physical products (for example, t-shirts or gym equipment).
As we mentioned earlier, there are no limitations in terms of the ways you could build your business and make money, especially when you’ve already built an audience to start with and grow it with time.
You could create a business that offers a single product or build multiple companies or a business that offers a combination of digital or physical products, services, B2B, B2C, or both, and so on.
For example, you could start with a blog, and later on, create a digital product, or physical products, or both. You could also sell services, make affiliations with other companies to promote their products and create passive income streams.
The key takeaway of this guide, though, should be: