C.J. Hayden, MCC

If you have enough clients to keep you busy, you must be
making a good living, right? Well, not necessarily. Some of
the busiest professionals around aren't earning enough to
pay their bills. On the other hand, there are some
consultants, coaches and other service providers who have
plenty of time on their hands but also earn quite a bit of
money.

The difference between the income levels of these two groups
isn't just because one group is better at marketing than the
other. The difference is in their business models.

Simply put, your business model is the answer to the
question "How do you intend to make money?" It's your plan
for how you will generate sufficient revenue to meet your
expenses and earn a profit. Unfortunately, many independent
professionals don't actually have a profit-making plan. And
some of those who think they have one are relying a bit more
on magic than they are on statistics.

For example, when you first hang out your professional
shingle, charging $100 per hour may seem like quite a lot.
After all, if you earned as much as $100,000 per year at
your last job working a 40-hour week, you were still only
making $48 per hour. So perhaps you think that doubling your
former hourly rate should be more than adequate to keep your
net earnings at their former level.

Let's do some quick math. If your business model is based on
working intensively for one major client for weeks or months
at a time, such as many corporate consultants do, an hourly
rate of $100 could indeed generate $100,000 per year. All
you would have to do is keep busy approximately half of the
time. $100 per hour times 20 billable hours per week times
50 weeks per year equals $100,000.

But what if your business model is based on working only two
to four hours per month for each client, like many coaches,
therapists, or healing professionals? Now if you want to
earn $100,000 per year, in order to bill those same 20 hours
per week, you'll need 20 clients at once if you see them for
an hour per week and 40 or more if you see them for less
time or meet less often.

In the first example above, you only need a handful of
clients each year and have large blocks of time left over to
market yourself. That's a sensible and realistic business
model. In the second example, you need a constant stream of
new clients coming in and the time you have available for
marketing is likely to be broken into small chunks between
appointments. That sort of model is more likely to lead to
stress and struggle than it is to success.

The first place you might look in order to fix model number
two is raising your hourly rate. You could charge $150 per
hour, $200 per hour, or more, if your target market will pay
it. But rates like these may be out of reach for many
potential clients, and difficult for you to justify.

But rate increases aren't the only way to fix a broken
business model. Both of the models we've been examining are
fee-for-service models, based on an hourly rate. Instead,
you could choose a different type of model altogether. Here
are some examples:

Fee for Service Models

Day Rate - Instead of charging by the hour, you can charge
by the day or half-day. This imposes a minimum on your
clients, avoiding short appointments that fragment your work
schedule. Examples: An on-site massage therapist calling on
corporate clients; a professional organizer serving
home-based businesses.

Project Fee - Charging a flat fee for each project allows
you to bill for time you spend planning, researching, or
just thinking about your client's issues. Clients often
prefer flat fees because they can budget their funds more
accurately. Examples: A graphic designer creating a logo; a
communications consultant writing a company newsletter.

Monthly Retainer - When you ask clients to pay by the month
in advance, you can charge for your availability, not just
service delivered. Your retainer can guarantee you a fixed
number of hours. If the client uses less, you still get
paid. If they use more, you can charge extra. Examples: A
career coach offering as-needed calls and e-mails in between
sessions; a virtual assistant providing on-call customer
service for a small business.

Product-Based Models

Flat Fee - A wide variety of items can be sold for a flat
fee to increase revenue to your business. "Products" can
also include services delivered in a defined package. Your
buyers may be either existing clients, or others who can't
afford to hire you individually. Examples: A conflict
resolution consultant offering public seminars; an executive
coach providing personality assessments; an image consultant
selling a wardrobe design kit.

Subscription - Providing products or services by
subscription can provide a steady source of income and
reduce marketing time. A sale made only once can continue to
provide revenue. Examples: A sales trainer selling an
educational CD series by monthly subscription; a life coach
hosting a membership-based online community.

Bait and Hook - Also called the "razor and blades" model,
Examples: A time management consultant offering a training
program including day planners that must be re-ordered; a
web designer providing proprietary modules under a license
that must be renewed annually.

Any one of these models can be used to build an entire
business, or you can combine different models together. For
example, a consultant could charge a flat fee for
assessments, then a day rate to deliver services. A coach
could charge a subscription fee for group clients and a
monthly retainer for clients worked with individually.

If your business isn't earning as much as you would like,
look beyond your marketing or the rate you're charging. The
real solution may be to choose a new business model.

C.J. Hayden is the author of Get Clients NOW! Thousands of
business owners and salespeople have used her simple sales
and marketing system to double or triple their income. Get a
free copy of "Five Secrets to Finding All the Clients You'll
Ever Need" at http://www.getclientsnow.com