Guide #6: Business models ranked by how fast they make money
“Get rich quick” is a myth
“Get rich quick” is a myth. Whilst there are always some opportunities that crop up where people can make fortunes in a short period of time, these are usually short-lived and are often not sustainable long-term businesses. I’ve launched many businesses now and the ones that work best are the ones that I dedicate myself to for prolonged periods. So a certain level of ongoing dedication is definitely required. In saying this, using no-code and the other techniques of the Tiny Empire method, it’s possible to get a business to positive revenue very quickly, with minimal investment. Rather than “Get rich quick”, I think this more as “Get moderately wealthy, relatively quickly”. In today’s post, I’ll share the business models which allow you to reach your revenue goals fastest, and the drawbacks of these models too.
By understanding the speed to monetization and the other considerations of each business model, you can choose one that will work for you in the long term, and lead to long term revenue, not just a one-off spike.
Unfortunately, many people focus on immediate revenue, without considering other implications of their business model and end up jumping from one revenue stream to another in a desperate attempt to keep money coming in.
Think short term AND long term
If you don’t think about immediate revenue and long term revenue, you can end up:
Chasing the dollar and prioritizing revenue over what’s best for your business
Following every trend as you have no long term vision
Switching revenue stream every few months
Eventually hitting a point where your revenue streams have ran out
But don’t worry, by taking a step back and thinking about the different business models in more detail, you can find a business that has the perfect blend of fast monetization and giving you the life you want for yourself in the long term.
I’ve grouped these business models into 4 buckets. Let’s start with the fastest bucket:
1. Transactional businesses
The fastest option
These are any businesses where you charge a fixed amount for a product or your time. A few examples of these are:
Service (freelancer, consultant etc)
Education
Ecommerce
The reason these types of businesses make money faster is that you can charge immediately in most cases, meaning you can start selling your offering as soon as you have it ready. If you have a skill you can sell to businesses as a consultant, you can start charging $100/hour and immediately make $16k per month (assuming you can find interested clients).
The drawback? In most of these cases, your revenue is closely linked to your time. You need to keep working the same number of hours to retain your monthly revenue. With the other models we’ll look at, your time involvement reduces as the business develops.
2. Subscription
2nd fastest option
This is any business where you charge a recurring rate. A few examples of these are:
Software-as-a-service
Professional communities
Paid newsletters
Again, with these companies, you can sell your service straight away, but typically the amount you charge will be a monthly or yearly rate, meaning you don’t make as much straight away as you’re not charging lump sums. You need to build up your number of customers over a longer period. The advantage however, is that once you reach a certain number of customers, you then have recurring revenue and just need to focus on keeping those customers, or at least replacing customers that cancel. With this approach, it’s much easier to reduce your time investment as the business grows.
3. Advertising
3rd fastest option
This is any business where you charge businesses to advertise to an audience that you have acquired. A few examples of these are:
Media
Marketplace
Communities with sponsorship model
This is a slower route to monetization as you first need to build an audience before you can sell sponsorships, which may take you 1-2 years. This is a great option for a side-project however whilst you’re working full time. Once your audience gets to a good size, you then have value that you’re able to sell to potential advertisers. The larger the audience grows, the higher the rate you can charge. For this reason, advertising based businesses also have good ongoing monetization options once you reach a certain scale, and your time involvement can be reduced massively. A tip is to focus on niche markets that have a high disposable income (think professionals).
4. Affiliate
Slowest option
This is any business where you take a commission for referring users to other products. This is very similar to the advertising model. In fact, the types of businesses that support an affiliate model are exactly the same:
Media
Marketplace
Communities with sponsorship model
Again you need to build an audience, before you can effectively monetize these businesses. The only difference here is that you don’t charge an upfront rate, but instead take percentages of any successful referrals to the products you recommend. This is a slower route to monetization than advertising as the payments are often small and it takes a lot of successful referrals to reach your revenue goals. Normally this only works for very large audiences. For this reason, it’s not a model I would recommend, but I prefer to think of it as an additional revenue stream to compliment another main one.
To sum up
Consider the models that appeal to you most, that avoid the 4 mistakes and fit with your preferences. Then try to find a balance between monetization and your long term vision. Perhaps you can start with a service based business and slowly build a recurring revenue stream at the same time. It’s perfectly possible to have 2 or 3 revenue streams running simultaneously, but ideally try to keep them all in the same sector so that the work that you’re doing grows all of them at the same time.
That’s all for this week. Subscribe to get another guide in your inbox next week.
If you’re looking for more help, there are a few ways I can help:
Course - Tiny Empires: Build a 6-figure business with no funding and no staff: This is very different to most business courses which are geared towards growth at all costs. The Tiny Empires approach focuses on building a sustainable 1-person business by understanding the business models and strategies that work for small businesses and optimizing them using tools and systems. By the end of this course, you should have a clear step-by-step path from idea to revenue, to allow you to build a business which works around your life. Pre-order (use code TINYNEWSLETTER for $50 off)
Course - Sales for Introverts (and people who don't like selling): This is not your average sales course. I don't use any salesmanship or sleazy tactics or endless unsolicited follow ups. Instead I focus on honesty, simplicity, human psychology and productive systems. By the end of this course, sales should no longer be a dreaded task and you will have actionable steps to become a sales master (even if you're shy). Pre-order (use code TINYNEWSLETTER for $50 off)
Book a 1:1 call: Your space to ask any questions you have if you're looking to launch a highly profitable small business that works around your life. Book here
Hire me to build and launch your business for you. Need help getting started? I can help you define your idea into a workable Tiny Empire, then build your project for you with optimization built in from day 1. Finally I create a go-to market strategy so that you can focus on specific areas that are likely to work. Starts from $10k Drop me an email