The Business Model of the Future?
Contributor Opinion & Editorial
Today, small businesses are steadily in the hunt for business models that provide the ability to serve as many clients as possible. Ok, I know. That’s a no-brainer! The challenge most businesses face when it comes to achieving this goal is scalability. The question becomes “How can I get an occasional client to become a consistent client?” Large companies have found a solution that most small businesses have never considered.
So what makes this business model so special?
Back in 2013, I noticed an amazing trend in the online business world. I noticed certain businesses trading occasional high dollar sales for consistent monthly payments. The monthly payments would range anywhere from $5 to $40 per month. I was intrigued, to say the least. To be totally honest, I was BLOWN away by the idea! Let’s take a look at what this means. The customer was receiving an enormous amount of value for a small fee. The business was gaining a consistent client every month. I knew I was witnessing a business model that could change the way we do business forever. As always, the early adopters would profit the most from this new business shift.
So what makes this business model so special? I call this a new business shift, but this business model has been tried several times before. If you are a millennial, you probably don’t remember Columbia House or BMG. These companies would send you CDs or Cassettes (I know. I’m letting my age show) for a monthly fee. But, these companies faced, even more, challenges than business do today. Collections were a nightmare due to the lack of technological advancements such as recurring payments and this little thing we call the internet. With these advancements, this is a go-to model for small business trying to establish a consistent client base and consistent monthly income.
This model is so powerful that as you are reading this you will probably recognize that you are paying 1 or 2 subscriptions or memberships each month. Let me use myself as an example. I currently subscribe to several memberships and subscriptions such as Netflix, Apple Music, Amazon Prime, Kindle Unlimited, YouTube Red, MyEcon, and LegalShield. Ok, I know I am overloaded, but all of these services provide incredible value for a nominal fee.
My prediction is that the subscriptions and memberships business model will disrupt the professional services world. The luxury lifestyle will finally be available to all. Businesses that stray from the dollar-per-hour or cost-per-night model to subscription models will enable more predictable revenue and offer luxury goods and services to a larger demographic.
If you are a small business owner and would like to explore adding memberships or subscriptions to your current business model I would like to schedule a consultation with you.
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