As a young entrepreneur, I was constantly searching for the perfect business model.  I wanted something that was failsafe.  There had to be a model that no matter what product or service you sold or who you sold it to would never fail.  I was seeking a model that would return endless rewards and build upon itself.  I know now there is no such thing.  But, I think I found something that is pretty close.

I spent many hours researching successful companies to learn and cobble together the best model.  As I do with many things, I created a list of criteria that the model must have.  Here are the important elements of that list and the reasons why they are on the list:

• Best of Class, Quality Product or Service – I learned early on as a salesman (we were not salespeople back then) that it was much easier to sell the best, regardless of the cost, as long as you brought value to the sales equation.  As an advertising sales rep and later the sales manager for a prestigious magazine, my team and I were able to distance ourselves from our competition by using the mystique and prestige of the magazine.  The reputation of the publication allowed us to get appointments with potential advertisers that others could not and that led to some great referrals and sales.  Conversely, I recall working for some second rate outfits and having to claw and fight to get sales.

I used the best of class rule when I started my publishing company to create a series of medical journals.  We created a unique proposition that no one could match and used the formula we created to establish a successful and fast growing company based on quality and best of class.

• Hire the Best People – Not only should you hire the best people, but you should give them a part of the company, or at the very least strong bonuses to help keep them engaged.  Share your vision of the future of the company as well as where you see them helping you talk the company.  When they buy your vision, you create a strong team working together.

I learned this lesson early in my publishing company through some bad hires and some very good ones.  At times it was a difficult lesson to learn, particularly when you have to fire the CEO of your own company.

• Create Multiple Revenue Streams – Early in my career, while employed at someone else’s company I learned this lesson.  We would create specific publishing projects built around events to create a buzz and to bring in additional revenue.  As an example, one such project was an in the water boat show where, we sold exhibit space, advertising in a special publication and charged the public for entrance tickets. The public was thrilled, marinas sold boats and product and we had a new publication and an alternative source of revenue.  Multiple revenue streams assured us if one source of income was weak, another would be able to support us.

I used this principle in my own publishing company.  We had the medical journals and we also created customized marketing publications for medical professionals throughout North America.  We also established a series of local directories that relied on advertising dollars for success.  It meant there was always income from one or more of these sources.

• Create Recurring, Subscription or Residual Income – I like to find easy ways to generate income.  And, it is much easier to sell the sell the same product or service multiple times to the same person or company.  As such, I have always looked to see how a product or service could be sold to generate that type of income.

This was one of the crucial pillars in my marketing plan for my software company.  Companies would first buy the basic software.  The software compared long distance telephone rates.  Companies used the software to get the best rates in the marketplace including from their own providers.  Since rates were very complicated and changed often back then, the rate tables were updated quarterly for the 7 largest carriers and all their programs.  In order for a company to have access to the latest rates, they paid an annual subscription fee which gave them a password and allowed them to download the latest rates from my web site.  The price of the subscription was miniscule compared to the money companies were saving so that they gladly renewed.

These are just a few of the principles I learned along the way.  There are many more and I will cover others from time to time!

Happy Entrepreneuring!!

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