Design Your Business Model

Welcome to Episode 83

Hey there, and welcome to episode 83 of your fun and profitable online business. This is the podcast that helps you build a business that feels as good as it looks.

I’m Wendy Muzzy, and I help women entrepreneurs create fun and profitable businesses by intentionally designing businesses that support the lives they actually want to live.

What does a $150,000 business actually look like?

So let me make you an offer. What if I told you I could give you $150,000 a year business? Sounds pretty good, right?

But I’m not going to tell you anything else about it. Maybe it requires 40 client calls a week. Maybe you have six employees. Maybe you have to post on TikTok twice a day. Or maybe you’re selling $7 products to 21,249 people.

Do you still want it?

Because $150,000 tells us how much money the business makes. But it doesn’t tell us anything about the business and the actual day-to-day of it. And that’s what I want to talk about today.

A couple of episodes ago in episode 81, we talked about making your business yours. I asked you to think about what you actually want your business and your life to look like.

Today, we’re taking that idea one step further. Because once you know what you want, you have to build the business capable of creating it. And that requires choices. Because you don’t discover the perfect business model, you actually design it.

All right, let’s get to it.

Two entrepreneurs with the same revenue goal

Let’s start by meeting two entrepreneurs. They both won $150,000 a year in revenue.

Entrepreneur One loves people. She’s an extrovert. She thrives on Zoom calls. She gets off a client call feeling absolutely energized. And she loves knowing her clients deeply, working with them over time and watching their progress.

Give this woman 15 amazing clients and a calendar full of conversations and she is beyond thrilled.

Then we have entrepreneur number two. She would rather lick a public handrail than have 15 client calls a week. She likes quiet. She likes creating. She wants long stretches of uninterrupted time. She would much rather write one email that reaches a thousand people than have 10 individualized conversations.

Now, they both have the same revenue goal, but those two women probably shouldn’t have the same business.

Entrepreneur One might create high-touch services for her clients. She might get most of her clients through referrals and relationships. Her revenue might depend on a relatively small number of people paying her a relatively large amount of money.

Now, Entrepreneur Two might create a couple of high-ticket offers alongside some digital products. She might build an email list and focus heavy on SEO. out. She might create asynchronous ways for her clients to work with her.

The math is going to math

But here’s where it gets interesting. Entrepreneur Two doesn’t get to say, I don’t want client calls. I don’t want to build an audience. I don’t want to sell. I don’t want to be visible. I don’t want to manage anyone. I don’t want to spend money on ads. And I want all of this and still make $150,000.

I mean, she can say it. I support dreaming. But at some point, the math is going to math.

And I think this is where we sometimes get stuck. We’re searching for the business model that gives us everything while asking almost nothing from us.

I don’t think that’s the goal. Rather, I think the goal is to decide which trade-offs you’re willing to make.

So let’s talk about how we figure that out using these five questions.

Question #1: How do you want to make money?

Question number one, how do you want to make money in your business?

This is the most obvious piece of the business model. It’s the money because we’re making a business here. We’re not making hobbies.

And $150,000 can be created in a ridiculous number of ways. You could have 10 clients who pay you $15,000. You could have 30 clients who pay you $5,000. You could have 300 sales at $500. You could make $1,500 sales of $100.

All of these equal $150,000 in revenue, but they do not create the same business.

Ten $15,000 clients require a very different sales process than 1,500 $100 clients. The delivery and marketing is different. The customer support and technology is different. The amount of trust someone needs before purchasing is different. And the size of the audience needed is, you guessed it, different.

Now we have to decide what kind of machine we’re willing to build to create it. And this is where you start making design decisions.

Question #2: How much of you does the model require?

Question number two. How much of you does the model require?

This is the relationship between your time and your revenue. If you get one new customer tomorrow, what happens? Do you need another hour on your calendar? Five hours? 20? Or could 100 additional customers buy without dramatically changing anything?

Again, neither answer is definitively better than the other.

Sometimes we talk about scalable offers as though anything requiring more of your personal time is somehow inferior, but I call BS on that.

If you love coaching five people every day, why are we desperately trying to remove you from coaching?

Your time isn’t a problem simply because a spreadsheet says it isn’t scalable.

But that spreadsheet is incredibly useful to understand what you’re choosing. If every additional $1,000 requires five additional hours from you, there’s eventually going to be a ceiling, and that might be completely fine.

Or you might decide you want to change the relationship between your time and your revenue. Maybe that means raising your prices, or adding a group offer, or creating something asynchronous, or hiring somebody, or maybe it means deliberately keeping the ceiling where you have it because you have enough.

That’s a design decision too.

Notice something here. The question isn’t, how do I remove myself from my business? It’s, how much of me do I want this business to require?

Question #3: How many people should your business depend on?

Question number three, how many people do you want your business to depend on?

Every business, no matter what it is, involves people. But how many? Do you want 10 deep client connections? Do you want hundreds of customers? Do you want thousands of followers? Employees? Contractors? Affiliates? Partners? A giant community?

Because people show up somewhere in the equation.

Let’s go back to the handrail entrepreneur. She doesn’t want 15 client calls every week. Great, we know something now.

But if she replaces those 15 clients with a $49 digital offer, she may now need hundreds of thousands of people entering her world to be potential buyers, which might change her marketing.

If she doesn’t want a large audience either, maybe she wants to keep it at a higher price. But that changes how it’s delivered. This is all designing.

And I want to add here that not wanting Zoom calls isn’t a problem. It’s just a constraint. And constraints help us eliminate models that don’t fit and allows us to explore ones that actually might fit.

Question #4: What are you willing to give the business?

Question number four. What are you willing to give the business? Now, this is a big one.

We spend a lot of time thinking about what we want our business to give us. I want complete flexibility. No selling, no employees, no stress. And I prefer not to work on Wednesdays. Listen, I would love to subscribe to this business plan.

But design requires constraints. Every design asks something from you. It might be for time, energy, money, visibility, management, complexity, risk.

You get to decide what you’re willing to give it and how much.

And maybe you’re perfectly happy being visible. Cool, that opens up possibilities. Maybe you absolutely do not wanna manage employees. Great, that’s helpful information.

Maybe you’re willing to invest money in ads because you’d rather not create five pieces of content every day. Or maybe you want an incredibly simple business and you’re willing to accept a lower revenue selling in exchange. Or maybe you’re in a season where you’re willing to work more because building something bigger sounds really exciting to you.None of these choices is more entrepreneurial than the other. They’re all just trade-offs.

And this idea is actually at the heart of the new business design quiz I’ve created. You get a limited number of points and you get to decide where they go. I’ll tell you more about how to take the quiz in just a minute.

But let’s get to question number five next.

Question #5: What trade-offs are worth it?

What trade-offs are worth it to you? Now, this one is sneaky.

Once you realize every model has a cost, you get to decide what cost you’re actually willing to pay.

I’ve been thinking about this with Instagram lately. If I know I don’t want to spend time feeding Instagram, why would I intentionally build a marketing system whose success requires me to spend the next five years feeding Instagram?

That doesn’t make Instagram bad. You might love Instagram. You might happily create reels for the next five years. And that is so exciting. That’s a trade-off you’re thrilled to make, and it makes me so happy for you.

We just need to ask if this works really well, do I want more of what this creates? And if this offer takes off, do I want to deliver more of it? If this marketing strategy works, do I want to keep doing it? If this low-ticket product works, do I want the customer volume that comes with it?

Here’s the key. Success tends to amplify the design you’ve already created. So you want to make sure that you’re amplifying something you actually want.

Your imaginary business rule committee

So now with these five questions addressed, you might have your imaginary business rule committee show up.

They might say, you need recurring revenue, you should create a membership, or you need a signature offer so you can scale, you should be posting more, you need a team, you shouldn’t trade time for money.

Apparently, they’ve held several meetings about your business without ever inviting you.

But designing your own business means you’re probably going to disappoint your imaginary business rule committee. Because design means choice.

Maybe you want a beautifully simple $150,000 a year business with no employees, or a $5 million company with 20 employees. Maybe you want five premium clients or 10,000 customers. Maybe you want to be everywhere, or you want your entire marketing strategy to consist of relationships and referrals and SEO and an email list.

Every single one of these are acceptable.

The goal is to make the choice intentionally and to make the best decision you can with what you know right now.

Design, observe, and adjust

Then you live with it for a while. You observe. You notice the friction. You notice the joy. You notice what works better than you expected. You notice what you thought you’d hate and weirdly love.

Then you design what you want. You try. You observe. You adjust. That’s how this works.

Your action step: Take the Business Design Quiz

With that in mind, I want to give you your action step for this week.

Go take my business design quiz at wendymuzzy.com/bizquiz. You have a limited number of points to allocate across different things you might want from your business. And that’s intentional. I want you to make choices.

What are you willing to spend your points on? What are you willing to compromise your points for? What are you absolutely unwilling to give up?

All of this is useful because you’re collecting design information.

Again, you can go find it at wendymuzzy.com/bizquiz.

The business you want may be closer than you think

Okay, I’ve got a little over today, but I’m really passionate about this. We all deserve to have the business of our dreams. And that gap from where we are and where that business is isn’t nearly as far as we think it is.

All right, that’s all for today. Until next time, happy building your fun and profitable business.