Your Business Model

Now don’t let me confuse you. Your business model is different from your strategy. It’s essentially the means in which you use to achieve your strategy. Let’s say your strategy is to make $100,000 per year by converting complimentary sessions into paying semi-private clients.

Now let’s say your current business model is:

1. Charging $25 per client / per session and you work with three clients at once.

2. You use the Phil Kaplan “Pay As You Go” approach.

3. You rely on sessions to provide all of your income.

This results in the average “training lifetime” of your clients being 6 months and they typically train with you two sessions per week.

So this means that:

1. Each client has a lifetime value of $1200.

2. You have to do 1334 sessions to gross $100,000.

3. You’ll have to have approximately 84 clients over the course of the year.

Now, let’s say that you change your business model to the following:

1. Charging, on average, $30 per client / per session and continuing to work with three clients at once.

2. Using the EFT approach for billing and offering 4 and 12 month options.

3. You offer a 10 Week - Group Weight Management Program that 40% of your clients participate in at $349.

4. You offer an autoship supplement program that 50% of your clients participate in. Their average purchase is $80 per month and you get 25% of that ($20).

These changes in your model result in the following:

1. The average “training lifetime” becomes 9 months because of the change to EFT and the more comprehensive approach (including nutrition.)

2. So now, before any of the “back-end” revenue, you have already increased the lifetime value of each client to $2160.

3. If you choose to continue to work with 83 clients over the course of the year, you’ll make an additional $11,586 from your Group Weight Management offerings.

4. If you choose to continue to work with 83 clients over the course of the year, you’ll make an additional $9,960 from your autoship program.

5. If you do the same 1334 sessions, you make $120,060 from those sessions.

This doesn’t even begin to account for the money saved in marketing costs since the clients will be with you longer.

So, if you want to work about the same amount of time, you’ll make over $41,000 more by changing your model. If you’re happy with $100,000 and would rather work less, you’ll be able to reduce your workload by about one-third.

So if you’ve never given much thought to your current business model, start evaluating now. Look at ways you can improve client acquisition, lifetime value, etc. Add in other steps or dimensions to your business and watch your profits go through the roof.