Wondering what the simplest data business models are available for new data entrepreneurs? How often have you thrown up your hands and said to yourself “I hate this job – I should use my data skills to start my own business online?”
YouTube URL: https://youtu.be/AFg2vU4213Y
If your answer to that question is more than once, then you need to watch this video because I’ll be showing you the 4 most viable business models for remote data businesses (aka; a business where you can operate remotely – from anywhere in the world). If you stick around to the end, you’ll learn the two fastest approaches you can take to building and getting profitable in your own data business, FAST!
Do you prefer to read instead of watch? Then, read on…
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Even if you’re a seasoned data science freelancer, you’ll want to know about each of these models, you will understand how you can take your freelance business and move it to the next level of profitability and scalability.
How do I know? Well, because I first started out as a freelance data scientist back in 2012…
Since then, I’ve served 10% of Fortune 100 companies from within my own data business. In 2018, I started coaching other data professionals on how to hit 6-figures in their own businesses FAST.
Hi, I’m Lillian Pierson and I help data professionals transform into world-class data leaders and entrepreneurs…
⭐10% of my mentorship clients have signed $100K+ CONTRACTS w/in 7 months of signing up with me.
How’s that for results?
The 4 Simplest Data Business Models
As for the 4 very best business models for remote data businesses (business that you can run and operate anywhere in the world), those are:
- Information products
- Services – a services or an agency service-based businesses
- Coaching and advising
- Software as a service
Of course, these are not binary classifications. There are going to be natural areas of overlap between each of these business models.
In this article, I’m going to cover each of these 4 models and how you can utilize them in order to get your data business up and running, scalable and profitable fast.
SERVICES BUSINESS / AGENCY
What it is: Freelancing / Freelancing with a team
If you’re already a freelancer, then you already sort of have a service-based business but you are probably the only one doing the services, right? Another way to do service-based business would be something like freelancing with a team. Bringing in a partner that can offer the same level of data services you do or bringing in a team to help you with all of the admin, marketing, sales, etc. – all of that stuff can be supported by team members. So, there are few different ways you can bring in help with serviced-based business. Let’s look at the pros and cons:
- It’s the fastest way to start your business.
- Because you’re a data professional, you can sell your time for 2x the amount of money you would make if you’re an employee doing the same job.
- It’s easy to make high ticket sales because you’re essentially selling your time which is the most valuable thing you have.
- You’ve got the liability to think of – if anything you built breaks, you have to think of the repercussions and who’s going to take responsibility.
- It’s not scalable in the long-term – it’s a great way to start your business and get profitable, but you need to start looking at how to shift this.
Just a quick tip: You can actually make a service-based business scalable by transforming it to either an agency or SaaS (software-as-a-service).
Tell us about it in the comments below – and let us know what services we could hire you for… I’m always looking to hire people with data expertise to help me in my own business and I’m sure that there are lots of people reading this that are in the same place…
INFORMATION PRODUCTS BUSINESS
What it is: Books, Online Courses, Digital Products
- Easy to sell
- Requires an audience
- Lower-ticket sale
If you haven’t started to build up your personal brand and you don’t have access to an audience, it’s going to be really hard to make an information products business profitable fast. In that case, you would probably want to start with your services and then make sure you’re heavy on your marketing game in order to build up the audience you need to then sell information products to.
COACHING / ADVISING
What it is: Group Coaching / Mentoring, 1-on-1 Advising
- It’s easy to set up
- Rates are decent (per hourly investment of your time)
Coaching and advising is essentially just coaching and advising on a 1-on-1 basis or maybe through group programs. It’s super easy and quick to set up and your hourly rate can be quite decent, especially if you sell a group program, which means you offer access to you in a group setting. If you sell group access, you can sell it at a lower price point, sell more people in and get a multiplier effect on the amount of revenue you generate per unit of time you invest with the group. That, or you can sell 1-on-1 advising.
But if you do 1-on-1, make sure that you charge a premium rate for that. For me, my 1-on-1 is the highest level of service in my business, because they’re actually getting the most valuable thing I have, which is my time, so it’s $1000/hour.
This model is definitely not what you put out there to build an audience because only a very small percentage of people that are aggregating around your business, are going to become customers. They’re not able to buy in at that level of service, and also you haven’t been able to sell them something at a lower price point to earn their trust.
- Lower Ticket Sales (per sale)
- Takes time away from your business
You have to think about this: If you’re selling a group coaching program and you’re charging, say, $3K for a 4-month program – that’s actually a pretty low ticket offer compared to, if you were to offer something like an enterprise-grade package or enterprise-grade access to SaaS to a large corporation. So, $3K-$4K is low to mid offer in terms of package cost. If you’re selling your time for $1K per hour, that’s pretty close to a low-ticket sale.
Another thing you have to keep in mind is that, if you sell your time 1-on-1 or even in the group coaching environment, that’s actually time you’re taking away from your business that you can spend on growing and scaling your own business. That’s why you want to put an appropriate price on your 1-on-1 advising services and you have to limit the amount of access that people can get to you. You need to have that time to work on actually growing your business.
The more you sell that time, the less you have for your own business.
If you’re getting excited by all this talk about profitable business models for data entrepreneurs, then you’d probably get a lot out of my video I did on “How to land tech freelancing jobs that pay well in 30 days.”
Watch it here.
SAAS Business Model
What it is: Software as a service that you deliver on a cloud environment
- Very Scalable
- High Profit-Forming Potential
- Long time-to-market
- Requires very technical skillsets
- High capital cost
This business model can be very scalable and profitable but it needs a very long time to market. It means that it takes you a very long time to build a software as a service solution, and it requires a very technical skill set. That can be expensive when you need to bring in other developers to help you develop and maintain your service as a service solution. That also means you’re going to get a high capital cost.
FASTEST WAYS TO START YOUR FIRST DATA BUSINESS
Like I mentioned earlier, you can start a service-based business almost overnight and then in the background, work to transform that into either an agency or SaaS.
Another way to set up a profitable business fast, is to actually start by offering 1-on-1 coaching & advising. Then, once you have built out an offer and validated that, you know that there’s a demand in the market for this and you know that you could turn a profit if you scale out the offer, then you can transform that into a group coaching model. And once you have built out the offer, built out all the IP inside of your program and tweaked it according to the feedback you’ve gotten from the group coaching clients, then you can turn it into a self-service course. That’s actually how I built my courses nowadays.
If you haven’t heard of my course Data Creatives & Co. – that’s exactly how I started that course.
If you’re feeling motivated and inspired to move forward quickly on your data business ideas, then I definitely recommend that you get my FREE Data Entrepreneur’s Toolkit.
It’s an ensemble of all of the very best, most efficient tools in the market I’ve discovered after 9 years of research and development. A side note on this, many of them are free, or at least free to get started, and they have such powerful results in terms of growing your business. These are actually the tools we use in my own business to hit the multiple 6-figure annual revenue mark.
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