Stop wondering how to make money with your business

Every entrepreneur, at some point, faces a pivotal question: “How will my business idea make money?”

Answering this question isn’t just about identifying a product or service; it’s fundamentally about selecting the right revenue model to ensure your business idea actually makes money.

Understanding the multitude of revenue models available can be daunting, which is why a systematic approach, such as the “Chinese menu” method used in business coaching, proves invaluable. This method simplifies the exploration of monetization strategies (aka. ways to make money in with your business idea!).

Steal my homework where I explain 40 viable revenue models that successful businesses use. They are designed to inspire you to come up with at least one if not several monetization ideas for your own business.

In this article, we’ll dive into this list of 40 revenue models, suitable for a wide array of businesses—from tech startups to professional services.

Specifically, we’ll take a closer look at the subscription model, a core of the business model of the vert first company I started as an entrepreneur (and am still running), Le VPN, highlighting its effectiveness and adaptability.

Additionally, we’ll integrate insights from my other business related to coaching and online training, revealing how different models can be tailored to maximize impact and revenue in the professional services sector.

This guide aims not only to outline these models but also to expand on them, providing entrepreneurs and business owners with the tools they need to turn their business ideas into profitable ventures. And to illustrate them, I’ll use my personal examples from my entrepreneurship journey.

Whether you’re in the initial stages of forming your business or looking to pivot your existing revenue strategy, this article will serve as a roadmap to navigate the complex landscape of potential revenue streams.

Let’s embark on this journey to uncover the ideal revenue models that align with your business goals and market needs.

1. First Things First: Your Chinese Menu of the 40 Revenue Models

Part 1: General Revenue Models for Any Business

Let’s dive straight into what you came here to read. Below are the first 28 revenue models that I call “general” because they have been successfully implemented across various industries.

If you’re one of the business owners who I often meet who are so excited about their business idea but have trouble explaining how exactly this business will generate revenue and be profitable, here are a few initial options that can help you brainstorm in the right direction and adapt these revenue models to your own business idea:

1. Product Sales: Selling physical or digital products related to your niche. These could be done in the form of direct sales or wholesale. Example: Apple, Nike, Coca-Cola
2. Ad-Supported Model: Businesses provide content or services for free while generating revenue through advertising. Google and YouTube are prime examples, offering free access to their platforms while hosting ads that generate billions in revenue.
3. Subscription or Membership Access: This model entails charging a recurring fee for continuous access to products or services. Netflix and Amazon Prime leverage this model to offer streaming and premium services for a monthly or annual fee.
4. Transaction Fees: Companies like PayPal and eBay charge a fee for each transaction processed on their platforms, capitalizing on the volume of digital commerce on their networks.
5. Financing or Interest: Financial institutions generate revenue through interest charges on loans, exemplified by banks and peer-to-peer lending platforms like LendingClub.
6. Licensing: Charging for the rights to use intellectual property or software, as seen with Microsoft Office and Adobe Creative Suite, provides a steady income from corporate and individual users.
7. Razor Blade Model: Companies sell a primary product at a low margin and generate ongoing revenue from high-margin consumable supplies. Gillette’s razors and blades are classic examples.
8. Leasing or Rental: This model involves providing items temporarily in exchange for regular payments. WeWork’s office spaces and Rent the Runway’s fashion rentals demonstrate how diverse this model can be.
9. Pay-Per-Use Model: Utilities and cloud services like AWS charge customers based on their actual usage, allowing for flexible pricing that can attract a broader range of customers.
10. Dynamic Pricing: Utilized by companies like Uber, dynamic pricing adjusts costs in real-time based on demand, maximizing revenue during peak times.
11. Bundling: Offering combined products or services, such as cable packages or McDonald’s meals, often enhances consumer value and business revenue.
12. A la Carte or De-Bundle: Contrary to bundling, this model offers individual components for separate fees, giving customers choice and flexibility, as seen with airlines and digital media services.
13. Fractionalization: Selling partial interests in a product for use during designated times. Time-share rentals and private jet shares are classic examples.
14. Crowdfunding or Patronage: Platforms like Kickstarter and Patreon allow creators to fund projects through donations or subscriptions from fans and supporters.
15. Pay-What-You-Want: This model allows customers to choose their price, often used by indie games and music artists to engage and expand their audience base.
16. Data Monetization: Companies capitalize on the data they collect by selling insights or targeted advertising, a model used extensively by social media platforms.
17. Freemium or Tiered Service: Offering a basic service for free while charging for advanced features. LinkedIn’s professional networking services employ this model effectively.
18. Affiliate Marketing: Influencers and bloggers earn commissions by promoting products, exemplified by personalities like Jenna Kutcher and Amy Porterfield.
19. Joint Ventures and Partnerships: Collaborative endeavors that combine resources and expertise for mutual benefit, such as Google’s and NASA’s technology projects.
20. Sponsorship: Businesses fund events or individuals in exchange for marketing exposure. This model is widely used in sports and entertainment industries.
21. Donation-Based: Non-profits and open-source projects often rely on donations to operate, supported by entities like the American Red Cross and Wikimedia.
22. Dropshipping: Retailers sell products that are shipped directly from the supplier to the customer, minimizing inventory costs used on platforms like Amazon.
23. Franchising: Franchisors allow others to operate using their brand and business model in return for fees and royalties, a popular model with fast-food chains like McDonald’s.
24. Event Hosting and Management: Generating revenue through organizing and hosting events, which can include ticket sales and sponsorships.
25. Corporate Training and Development: Companies like Dale Carnegie offer specialized training programs to enhance workforce skills and organizational performance.
26. Cooperative Model: Businesses operated and owned by their members share profits and benefits, as seen in organizations like REI and Mondragon Corporation.
27. Barter System: Modern B2B arrangements sometimes involve the direct exchange of goods or services without monetary transactions.
28. Consulting and Professional Services: Professionals charge fees for their expert advice, which is common in fields like law, business consulting, and marketing.

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Part 2: Specific Revenue Models for Professional Services and Portfolio Career

You’ve probably already heard my talk about Portfolio careers before and if not and it piques your interest, I have a full free training for you here.

As an entrepreneur with a Portfolio career and an advocate for this Future of Work trend, I decided to zoom in on the specific revenue models adapted to this niche of businesses.

Tailored for consulting, coaching, and other service-based businesses that you may find inside your Portfolio career, here are 12 specific revenue models that offer flexible and effective monetization strategies:

29. Hourly or Session-Based Fees: Professionals charge per hour or session, providing clear and straightforward billing for clients.

30. Package Deals: Offering services in packages can secure longer commitments and provide comprehensive support, often used by coaches and consultants.

31. Retainer Model: Clients pay a regular fee to retain services over a period, ensuring a steady income stream for the provider.

32. Subscription Model: Similar to retainers, this involves regular payments for ongoing access to services, such as group coaching sessions or monthly consultancy advice.

33. Performance-Based Pricing: Fees are linked to the achievement of specific outcomes, aligning client goals with service provider incentives.

34. Group Coaching: Providing coaching to multiple clients simultaneously can maximize time and resources while making services more accessible.

35. Workshops and Seminars: Charging per attendee for specialized knowledge-sharing sessions, which also serve as a platform for broader engagement.

36. Online Courses and Memberships: Leveraging digital platforms to offer scalable learning options that provide passive income.

37. Escrow Milestone Payments: Ensuring payment is based on achieving agreed-upon milestones, providing reassurance to clients while incentivizing providers.

38. Corporate Training and Consulting: Customized training sessions for businesses can be highly lucrative, targeting specific organizational needs.

39. Event Hosting and Speaking Fees: Experts can generate revenue by hosting or speaking at industry events, conferences, and seminars.

40. Product Sales: Selling related physical or digital products, such as books, courses, or branded merchandise, can complement service offerings.

These revenue models provide a broad spectrum of options for businesses across sectors, enabling tailored approaches to building and sustaining profitable enterprises. Whether you’re a fledgling startup or a seasoned enterprise, understanding and choosing the right revenue models can dramatically influence your business’s success and scalability.

2. Case Study of the Subscription Revenue Model in Le VPN Business

The subscription model is one of the most popular and effective revenue strategies, particularly in the digital age. It offers businesses a stable revenue stream and customers convenience and continuity. Let’s explore this model in depth, focusing on its implementation in the tech and SaaS industry through a case study of one of my companies Le VPN.

What is a Subscription Revenue Model?

The subscription model is predicated on charging customers a recurring fee at regular intervals—monthly, quarterly, or annually—to access a product or service. This model is advantageous for businesses because it provides predictable, recurring revenue, which facilitates better financial planning and resource allocation. For customers, it offers continual access to services or products without the need to commit to a single large payment.

Subscription models are increasingly prevalent in software, media, and service industries, where digital delivery reduces incremental costs. They align well with the growing consumer preference for on-demand services, from streaming platforms like Netflix to software services like Adobe Creative Suite.

Case Study – Le VPN

Le VPN, a provider of virtual private network services for individuals in the form of an app for phones, computers, and other smart devices, utilizes the subscription model exclusively.

Le VPN offers several subscription options, which include exactly the same service but priced differently depending on the initial commitment for the renewal period (quite a classical approach in the market):

• Monthly Subscription: Priced at $9.95, suitable for those testing the service or needing a VPN for a short period.
• Six-Month Subscription: Priced at $44.99, which reduces the monthly cost slightly, appealing to users committed to medium-term usage.
• Annual Subscription: At $59.40, this option offers the best value, targeting long-term users.
• Multi-Year Subscriptions: offered in promotional periods to users looking regularly using a VPN service and looking for the best deals.

It’s quite a simple business model.

Advantages of the Subscription Model for Le VPN:

1. Steady Revenue Stream: By charging a recurring fee, Le VPN smoothens its revenue generation throughout the year. This is crucial because it cushions the business against fluctuations in new sales, which can vary seasonally or with market dynamics.
2. Customer Retention Focus: The nature of the subscription model incentivizes Le VPN to prioritize customer satisfaction and service quality. Since the cost of acquiring a new customer typically exceeds that of retaining an existing one, Le VPN invests heavily in product development and client services. This investment ensures that existing customers receive outstanding service, thus increasing the likelihood of subscription renewals.
3. Budget Allocation: The largest portion of Le VPN’s budget is allocated to product development and client services. This strategic allocation is not merely about adding new features but also about ensuring high uptime, robust security, and responsive customer support. These factors are critical in the VPN market, where users demand reliability and quick assistance for issues.
4. Business Strategy Emphasis: Le VPN’s strategy underscores an essential principle of the subscription model: the interdependence of product quality and customer retention. By maintaining a high-quality service that evolves with technological advancements and customer expectations, Le VPN not only secures its financial footing through recurring revenues but also builds a loyal customer base that contributes to sustainable business growth.
5. Virality through word-of-mouth: The positive side-effect of a revenue model that it gives incentive to businesses to deliver outstanding service to their customers in terms of the product/service, user journey, and customer support is the loyal customer base that leaves positive revues, recommends the brand and creates virality. Le VPN has been around since 2010 and we still have customers who have been there since those early years. Not every business, especially in the VPN industry, can attest to that.

This case study of Le VPN illustrates how the subscription model can be effectively implemented in a tech-driven industry, highlighting the importance of aligning business strategy with customer service to maximize the benefits of recurring revenue streams.

I hope it gave you some ideas for your own business. Let me know in the comments.

3: Case Study of Revenue Models in Coaching Business

In the diverse world of coaching, flexibility in revenue models is essential to meet varied client needs and sustain business growth. Especially today, when there are so many coaches out there and almost everybody jumps to call themselves a coach.

This section will explore the varied revenue models I employ in my coaching practice as an ICF (International Coaching Federation)-accredited Business Coach and also a PCC (Professional Certified Coach which is a certification level by ICF), reflecting the adaptability required in this profession.

The intention of this case study is to draw back a curtain on how my coaching business operates and how you can use some of the 12 revenue models targeted to professional services that I shared later for your own business or for your Portfolio career.

The 5 Revenue Models I Use in my Coaching Business

As a business coach, I employ multiple revenue models to cater to the different needs and preferences of my clients, ensuring a broad and flexible service offering.

I have already shared with you the 12 revenue models you could use for your professional services business, so here are the five revenue models I use myself:

1. Package Model

My primary revenue model as a PCC Business Coach for entrepreneurs involves selling a package of 10 coaching sessions. This package is typically agreed upon during a free 30-minute initial conversation where we discuss the client’s goals for the coaching relationship. We start by setting SMART goals in the first official session and progressively working towards achieving them. Clients are asked for a firm commitment to the first three sessions to ensure the relationship and the coaching methods align with their expectations and they start seeing first results. As an ICF-accredited coach, I adhere to the ICF’s ethical guidelines, ensuring that if a client is not satisfied with the progress or the relationship, they can opt-out at any point. However, I do guarantee results after the completion of the 10-session package, based on our agreed contract.

N.B. I have a 100% success rate when it comes to my clients hitting their targets by the end of our 10-session contract, and that is why I say that I “guarantee” results. But it does not mean that I use a Performance-Based Revenue Model which is different and which some other coaches use. The reason for that is that I can only guarantee delivering on my part of the coaching agreement, but the client still needs to do the work, especially when it comes to actually starting and running their business. I have a feeling that removing that responsibility for the results from my clients and putting it on my own shoulders will not be very beneficial for my clients and the success of their business. After all, they need to be able to run it like a boss after our 10-session contract is over.

2. Session-Based Fees:

Outside of the package, I offer what I call “laser coaching sessions.” These are designed for returning clients who need targeted advice or solutions for specific challenges. This model allows for flexibility and immediate support, providing a quick, session-based option for clients who do not require a full package. These are quite rare though as the objective for me as a coach is to empower my clients to deal with the business reality on their own and be successful in it.

3. Online Courses:

Diversifying further, I offer online courses that clients can take at their own pace. This model allows me to reach a broader audience and provide valuable content without the need for one-on-one session time. It serves as a passive income stream that complements the active income from direct coaching.

4. Group Coaching:

Occasionally, my online courses are supplemented with group coaching sessions. This format fosters an interactive learning environment and helps clients benefit from peer learning and support, expanding the impact beyond individual coaching.

5. Digital Resources:

To accommodate the diverse needs of entrepreneurs at different stages of their journey, I offer a variety of digital resources, available both for free and for purchase. These resources, which include downloadable guides, templates, and tools, are designed for clients who prefer to work independently without engaging in one-on-one coaching. This approach not only serves as an additional revenue stream but also allows me to support a broader range of clients by providing essential tools and information they can use to navigate their entrepreneurship journey on their own.

Bonus: Expanding Professional Reach Through Workshops and Speaking Engagements

Beyond individual and group coaching, I frequently engage in workshops, masterclasses, and speaking engagements. These opportunities not only diversify revenue streams but also help in reaching wider audiences, establishing thought leadership, and enhancing brand visibility in the coaching industry.

Adopting multiple revenue models in a coaching practice not only enhances financial stability and growth but also meets diverse client needs more effectively. Whether through packages, individual sessions, online courses, speaking engagements, or digital resources, each model offers unique benefits and challenges.

Aspiring coaches and professionals can learn more about these models and how they can be integrated into a successful business strategy by accessing my free training on building a Portfolio Career. This resource is designed to provide actionable insights and inspiration for anyone looking to diversify their professional pursuits.

Conclusion: Harnessing the Power of Revenue Models for Business Success

The journey of selecting the right revenue model is both an art and a science. It involves understanding the vast landscape of available options and strategically choosing the ones that align best with a business’s specific needs and market demands.

Throughout this exploration—from examining 40 different revenue models to diving deep into subscription services and detailing the varied strategies in coaching—we’ve seen the transformative impact that thoughtful revenue model selection can have on a business’s sustainability and growth.

Application of the “Chinese Menu” Method

In my coaching practice, the “Chinese menu” method is a foundational tool that aids clients in navigating this complex decision-making process.

This approach presents a variety of revenue options as a menu from which clients can select, allowing them to combine different strategies to tailor a monetization approach that best suits their business’s needs. Download your “Chinese menu” cheatsheet of the 40 revenue models here.

For instance, when I work with clients who are starting their own business, we begin by brainstorming the business idea, identifying the target customer persona or niche market, and clarifying the problem they intend to solve. Only then do we explore suitable revenue models and their monetization potential.

This process doesn’t always lead to a straightforward choice; sometimes clients opt for one model, sometimes they combine several, and occasionally, they innovate a new hybrid version. The essence of the Chinese Menu tool is to ignite reflection and exploration, rather than to prescribe solutions.

Key Takeaways:

1. Diverse Options: From traditional product sales and subscriptions to innovative approaches like crowdfunding and data monetization, the landscape of revenue models offers a multitude of paths tailored to different business needs.
2. Practical Examples: Case studies from real businesses, including my own ventures such as Le VPN, demonstrate the practical application of these models in various sectors, providing you with actionable insights.
3. Decision-Making Tools: The “Chinese Menu” method showcased here simplifies the process of choosing the most suitable revenue model for your business by comparing options side by side.

Whether you are at the inception stage of your business or looking to pivot your current strategies, remember that choosing the right revenue model is crucial to building a resilient and prosperous enterprise. You want to build a profitable business, right? The revenue streams are the first piece of the profitability puzzle.

This article is just the beginning of your journey towards financial success. To dive deeper and start applying these models to your business, I encourage you to download the complete cheat sheet of 40 Revenue Models Successful Businesses Use. This resource will serve as a practical guide to help you innovate and implement the strategies discussed here.

Click here to download the complete cheat sheet and start transforming your business idea into a profitable venture today. Equip yourself with the knowledge to choose the best revenue model that aligns with your business goals and market demands. Let’s build a resilient and prosperous enterprise together!