It’s an important question to be able to answer. Simply put, your business model is how you intend to generate sufficient revenue to meet expenses and earn a profit. If your mission-driven enterprise is going to be sustainable, it needs to have clearly defined income streams that will be sufficient to fuel your mission, cover your expenses, support you and your family, and provide for the future. That can be a tall order.

Unfortunately, many entrepreneurs on a mission don’t actually have a profit-making plan. And some of those who think they have one are relying more on guesswork than they are on analysis.

There are a wide variety of established business models available. Most service professionals use the billable hours model and request payment for each hour they work. When your enterprise includes not just service, but products, programs, and processes, you expand the possibilities for the type of model, or combination of models, you can use.

Here are some examples of business models used by many of my clients that you can draw from:

Fee for Service Models

Day Rate — Instead of charging by the hour, you can charge by the day or half-day. This imposes a minimum on your clients, avoiding short appointments that fragment your work schedule. Examples:

• Environmental market researcher conducting focus groups
• Massage therapist providing on-site massage for organizations

Project Fee — Charging a flat fee for each project allows you to bill for time you spend planning, researching, or just thinking about your client’s issues. Clients often prefer flat fees because they can budget their funds more accurately. Examples:

• Sustainability consulting firm advising clients on implementing responsible practices
• Psychologist offering psychological testing and assessment

Monthly Retainer — When you ask clients to pay by the month in advance, you can charge for your availability, not just service delivered. Your retainer can guarantee you a fixed number of hours. If the client uses less, you still get paid. If they use more, you can charge extra. Examples:

• Recovery coach offering as-needed calls and e-mails in between sessions
• Political consultant providing ongoing campaign management and advice

Subcontractors/Employees — You can hire or contract with other professionals and have them deliver services on behalf of your company. These may be people who come to you with appropriate skills and experience already, or people you train to use your approach. Clients pay your company for these services and you keep a percentage for yourself. Examples:

• Learning center with multiple teachers on staff
• Diversity training firm with trainers in multiple locations

Product- or Process-Based Models

Flat Fee — A wide variety of items can be sold for a flat fee to increase revenue for your enterprise.”Products” can also include services delivered in a defined package. Your buyers may be either existing clients, or others who can’t afford to hire you individually. Examples:

• Cause marketing consultant packaging her wisdom in a do-it-yourself kit
• Mediator offering public conflict resolution seminars

Subscription/Membership — Providing products or services by subscription, or memberships in your community, can provide a steady source of income and reduce marketing time. A sale made only once can continue to provide revenue. Examples:

• Youth leadership trainer selling an educational CD series by monthly subscription
• Nurse consultant hosting an online community for people with chronic illness

Back-End Sales — Also called the “bait and hook” or “razor and blades” model, where you sell a product or service that requires periodic updates at an additional cost. Examples:

• Vegan weight loss expert offering frozen packaged meals delivered monthly
• Database of sustainable ingredients for cosmetics requiring quarterly updates

Licensing/Franchising — Packaging your approach so that others can replicate it with their own clients or in different locations. Your licensees or franchisees pay you a start-up fee to acquire your package, which may also include training. You may also offer them ongoing training and support in return for an annual renewal fee or a percentage of their earnings. Examples:

• Social enterprise employing homeless workers offers their model to other cities
• Trauma recovery therapist certifies other therapists in his/her approach

Any one of these models can be used to build an entire business, or you can combine different models together. For example, a consultant could charge a flat fee for assessments, then a day rate to deliver services. A coach could charge a subscription fee for group clients and a monthly retainer for clients worked with individually.

As you can see, a sustainable business model can make it possible for your brilliant ideas for changing the world to also provide you with a good living.

Here are some coaching questions to ask yourself to design a better business model:

• How far do you want your mission to reach? Will you be satisfied with the number of clients you can serve yourself, or will you need to expand in order to make the impact you seek?
• How much do you want or need to earn in order to further your mission, cover your business expenses, support you and your family, and provide for your future and that of your enterprise? Is it realistic to expect that level of earnings with your current business model?
• What’s your vision of how you most like to spend your time? Serving clients? Creating new work? Working alone? Participating on a team? Learning and experimenting? Organizing and planning? Hanging out online? Speaking or teaching? Traveling? Hosting others in a place of your own?
• When you read the examples of business models above, which ones sparked your interest? Can you see yourself in any of these models? Which seemed to speak most to your skills, talents, and preferred work style?

I hope you’ve found these ideas valuable. Watch for Part #3 of this series: “Overcome Fear, Procrastination, and Self-Doubt.”

But if you can’t define your mission clearly, you stand the risk of others defining it for you. Ideally, your entrepreneurial mission should help you determine what you want to accomplish. So when your mission remains foggy, your actions aren’t always on target.

A clear mission helps you make decisions about what you do and don’t want to do much more quickly. It acts like a lighthouse beacon, guiding you to find the navigable channel and avoid the rocks. This leads to higher productivity, better satisfaction, less frustration, and ultimately, making more of an impact.

A powerful entrepreneurial mission typically has three components:

1. Who you want to serve.
2. What you want for them as a result.
3. The wider impact or higher purpose of your actions.

Here are examples of clear missions from some of my coaching clients:

• Help people with life-threatening illnesses get the medical care they deserve, transforming a broken health care system into one that works.
• Guide teenagers to develop their leadership skills so they can build stronger communities.
• Advise corporate executives on how to make their companies more socially responsible, increasing corporate social contribution worldwide.

And here are some examples, also from my coaching clients, of entrepreneurial missions that needed improvement:

• Advise small communities on how to keep their downtowns vital. (Who exactly is being served here? If you’re not sure, you may not know who will hire you.)
• Train high-school students and teachers about sexual harrassment. (What do you want for them as a result? When you can’t express this, it’s hard to sell it to anyone.)
• Sell energy conservation devices to conscious consumers online. (What’s your purpose for doing this? Do you just want to make passive income or are you trying to make a social impact? When you aren’t clear on this, it’s hard to make strategic decisions or attract partners and supporters.)

When your mission is clearly defined, it shines its light on everything you do. It allows you to set worthwhile goals, design effective plans, evaluate new opportunities, and determine what’s the most important thing to accomplish today.

Here are some coaching questions to ask yourself to get a clearer picture of your mission:

• Who do you truly want to serve? Whose goals and problems do you care about? Who do you enjoy reading about, hearing from, or spending time with? When you feel your blood boiling, whose situation has made you angry? Who do you feel deeply connected to, even when you don’t know them?
• What result do you want to produce for those people? What do they need, want, and value? What unique contribution can you make to their situation? How can your gifts best be put to work?
• What is the wider impact or higher purpose of this work? Why do you want to do it? Why does it need to be done? How will the world be a better place if more of this work is in it? What legacy do you want to create for your life?

I hope you’ve found these suggestions valuable. Watch for Part #2 of this series: “What’s Your Business Model?”

But what if the economy doesn’t improve any time soon? What if the conditions we are experiencing now are the new conditions for the foreseeable future? What might that suggest about how you should be marketing your business?

At the close of 2007, the U.S. and many other countries began experiencing recessionary conditions. According to the economists, the U.S. recession ended in 2009. But it seems that no one has noticed. And why should they? Unemployment is high, consumer confidence is low, home values have not recovered, and national debt now exceeds GDP in numerous countries, the U.S. included.

If a set of conditions persists for years, at what point do you simply accept them as the way things are? Perhaps that point should be right now. Instead of waiting for an economic recovery to turn your business around, you could begin to turn it around yourself. Here are some thoughts on how to get started.

1. Set sales goals and make a plan to reach them. This sounds simple, but I’m always surprised by how many professionals set a goal without making a plan, make a plan without setting a goal, or neglect both.

Establishing a goal is the only way to know what sort of plan you need. When you don’t declare the level of sales you want to reach, your marketing can stray off track. Spending time online to sell a $29 ebook, for example, instead of pursuing leads for a $10,000 contract, because you keep hearing that “companies aren’t buying.”

When you err in the other direction, and set a goal without building a realistic plan, it’s too easy to be deterred from going after what you want by thoughts like “I’ll work toward that after the economy picks up.” A slower economy indicates you should plan smarter and sooner, not later.

2. Sell got-to-haves instead of nice-to-haves. In lean times, people and organizations spend only to get what they need, rather than on what they want. To make sales, you have to sell what people are buying.

This doesn’t necessarily mean you need to change what you sell, but you may need to change how you sell it. Get specific about the results you produce or value you provide. Help your prospects see how what you offer can help them earn more, spend less, or overcome their current challenges more readily.

An unemployed manager will hire a coach to improve interview skills when she wouldn’t pay for coaching to build confidence. A downsized company will bring in an expert to increase efficiency when they wouldn’t consider hiring someone to improve job satisfaction. In both these examples, the person being hired ‒ and the work being done ‒ may be exactly the same, but the client believes interview skills or efficiency are needs, while confidence or satisfaction are merely wants.

3. Take action on facts, not on fear. The next time someone tells you “no one is paying for marketing help right now,” ask them how they know that. (A survey released by Doremus last month indicates global corporate spending on marketing was up 10% in 2011, and 29% of companies plan to increase their spending on marketing in 2012.)

Or if you hear that “people don’t have money for alternative medicine these days,” request to know the source for this claim. (A recent Deloitte study shows that U.S. families spent $28 billion on alternative medicine practitioners in 2009, in the middle of the recession.)

If 9% of the workforce is unemployed, then 91% of workers still have jobs. Corporate spending may be lower than before, but that doesn’t mean it’s nonexistent. Do your own research on who is hiring and spending, and take your guidance from data, not doomsayers. Then target the people and organizations who can pay.

4. Eliminate blame from your vocabulary. The state of the economy may indeed be someone else’s fault, but spending time blaming politicians or bankers or real estate speculators can stop you from taking responsibility for your own success. It doesn’t matter to your business who else may be at fault for the way things are. What matters is what you plan to do about the situation at hand.

In Nov 2008, I wrote: In the depths of the Great Depression, Franklin D. Roosevelt declared in his inaugural speech, “The only thing we have to fear is fear itself.” He described that fear as the “nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.” FDR’s message was that the real danger was not the economic conditions themselves, but the prospect that we would become immobilized by our fear of them.

Is it possible that your own fear of failure or rejection, or blame of conditions you can’t control, or resentment of the people responsible for this mess, has in some ways immobilized you?

It’s time to let all of that go. Take charge of your marketing, find out who is buying, determine what they need, set a clear goal, and make a plan to get there. The sooner you do this, the sooner your own economy will improve.

Copyright © 2012, C.J. Hayden. All rights reserved.

This article was first published in the January 2012 issue of the Get Clients Now! E-Letter, and has not appeared in any print publication. If you would like to reprint it, please contact me for permission.

But what is the reality? A recent study reported by eMarketer shows that only 42% of small business owners who use social media marketing are receiving sales leads from Facebook, 36% from LinkedIn, and 16% from Twitter. That’s a pretty poor showing from a marketing channel that’s being touted as so effective.

The study doesn’t indicate the quantity of leads these businesses are getting, or what percentage they’ve been able to convert into paying customers. But it does report how much these leads are costing them. More than 70% of the small businesses surveyed say they are either losing money or no more than breaking even on their investment in social media. Ouch! What small business can afford that?

How is it that so many small business owners are being misled about the value of social media for their marketing? Let’s consider this question for independent professionals, the small business owners I know best.

First of all, social media is not a marketing strategy or even a set of tactics. It’s a platform for marketing that can be used in a wide variety of ways, like the telephone, email, or the Internet itself. You can use social media to execute any of the six strategies that independent professionals typically employ: direct contact and follow-up, networking and referral-building, public speaking, writing and publicity, promotional events, or advertising.

Ranked from most effective to least effective, the strategies above are listed in order. For an independent professional seeking clients, the least effective marketing strategy is advertising. But this is exactly how self-employed professionals are most often using social media. They are hosting company pages and posting status updates that consist primarily of sales messages about their services, products, and programs. No wonder they’re not getting the results they expect.

The best use of social media for independent professionals is to execute the most effective strategies rather than the least. That means using it for direct contact and follow-up, and networking and referral-building.

Social media is no different in this respect from any other marketing channel for professionals. Phoning someone you already know to have a conversation is much more effective than having a robot deliver voice mails to strangers. A personal email to share helpful resources with an existing contact works much better than sending promotional email broadcasts to people who never heard of you.

What social media is best for is actually what it was originally designed for. Remember when we called it social networking? For the independent professional, that is still this platform’s best use — networking with people you already know in order to stay in touch and deepen your relationship.

There are many nuances to the effective use of social media I don’t have space to detail in this article. For example, the awareness that networking must be reciprocal rather than self-centered. You can’t just keep putting out your own information and never read or respond to what others have to say. Or the need to balance promotional items with healthy doses of useful, entertaining, or inspiring posts if you want people to keep following you.

Or recognizing that a significant number of the people who choose to follow you are doing so just so you will follow them back, and will never read anything you post. Or admitting that your attraction to social media may be that it allows you to stay in your office and never have to speak with strangers, thereby avoiding rejection.

But the overriding issue for any independent professional to resolve about social media is this. What is the role it should play in your overall marketing plan?

For businesses in general, social media can be a useful tool for creating brand awareness and market visibility. But small businesses can rarely afford that type of visibility marketing, and independent professionals even less so.

The smaller the business and more personal the service being delivered, the more important it becomes to focus your marketing plan specifically on client acquisition. That is, identifying prospects who might become clients and following up with them until you close the sale.

Looking through that narrow lens, the most fitting uses of social media for independent professionals are not brand awareness, market visibility, or even attracting new prospects (as the study quoted above shows). Instead, its best uses are one avenue (among others) to network with your existing contacts, and to follow up with prospects you attract in other ways.

In other words, social media can play a part — and perhaps a small part — in your marketing plan. It can’t carry the whole plan. You need to use other strategies to attract prospects in the first place, and other channels to follow up with them after you do.

Is social media marketing a boondoggle? Not necessarily. Social media, like any marketing channel, has its uses. But neither is it the ultimate boon to small business marketers that many are claiming.

There is still no “silver bullet” solution for marketing your professional services at zero cost in your spare time. You still have to invest time and money to identify likely prospects, follow up with them to deepen relationships, and have sales conversations that expose you to rejection. And that will be true no matter what new technology for marketing is invented next month or next year.

Copyright © 2010, C.J. Hayden. All rights reserved.

This article was first published in the November 2010 issue of the Get Clients Now! E-Letter, and has not appeared in any print publication. If you would like to reprint it, please contact me for permission.