When I visit my parents’ wheat and sheep farm in Perth, Australia, I’m always reminded of how important it is to make the right decisions in business.
My parents have worked on the farm for decades. It’s an uphill battle with few financial rewards for all the hard work they’ve put in. Like my parents and many farmers, if you’re passionate about something and want to build a business out of it despite the small profit, then by all means, follow that passion and live the life you want.
However, if you’re a serious entrepreneur and want to run a successful business that will return significant revenues, then you need to consider two important decisions:
- What’s the right business model for me?
- Which niche should I choose?
Choosing the Right Business Model
Farming can be a rewarding business. But if you’re passionate about the corporate life, it’s definitely not the best business model out there.
Farming requires you to spend a significant amount of money on materials and equipment like chemicals, headers, tractors, and trucks. Sometimes, farmers have to take out loans just so they can afford to start their business and plant crops. And in some circumstances, they may not be able to get a return on their investment.
Business ventures often require you to use your own money before you get started. But if the capital is too high and your business is not viable, then there’s a high risk of losing a lot of money.
In farming, it takes about a year before you can harvest your crops. While you wait, a lot of factors determine whether you’ll have a good or bad business year. For example, if the weather conditions are unfavorable (drought, frost, flooding, etc.) you won’t produce much crops. Therefore, you won’t have much goods to sell.
Your business can’t be successful when you have to rely on external conditions to work in your favor, especially those determined by nature. Whatever business you choose, ensure that you have control of the outcome.
Farmers take out loans, pay for their equipment and materials, plant crops, then wait all year to see if they have goods to sell. You wouldn’t work as an employee with this kind of uncertainty, so you shouldn’t work as a business owner this way, either.
Always insist on getting paid upfront for any work that you do, and then deliver after. If you don’t, you run the risk of not getting paid at all.
Benefits of Affiliate Marketing
Affiliate marketing is an excellent business model since your expenses will be low, there are no “external and uncontrollable” factors to struggle with, and payment is based on your ability and skill.
It also has wide profit margins—up to 50 percent at times. That in itself is one of its greatest benefits compared to other business models. For example, if you’re a MOBE consultant, you simply promote our products and services. The fulfillment is already done for you, which reduces the workload and creates faster results.
Additionally, affiliate marketing is very scalable. I’ve seen affiliates go from a few thousand dollars to a hundred thousand dollars a month within a year!
Choosing the Right Niche
There are so many industries to choose from, ranging from fitness to real estate to marketing to fashion.
When choosing your niche, you have to find the balance between your passion and profitability. I would focus more on the latter. It will help you avoid feeling frustrated in case your passion doesn’t pay off.
Remember, you could always follow your passion, but running a business is all about making profits so you could live a better life.
I’m an advocate of the business-to-business niche since it can give you the most profitable results quicker than most. When you sell business training or consultation to a company, and it proves to be effective, you could charge much higher rates for the service in the long run.
For example, if your training increases a business’ revenue by 10 percent, then you can use that as leverage to charge more since your product or service is helping the business to increase their margins.
Additionally, B2B allows you to work with business owners and entrepreneurs, therefore you’ll always be in the presence of like-minded people and often find yourself learning from their experience and wisdom.
You can say that ingenuity coupled with creativity and hard work has led MOBE to success, but I still prefer to credit the company’s accomplishments to choosing the right business model and niche.
Whatever country you’re in, affiliate marketing may be just the answer you’re looking for to help you live the life you’ve dreamed of. In fact, Web Prom points out that, “In 2013, UK businesses made £14 billion thanks to affiliate marketing and paid out an astounding £1 billion to affiliate marketing websites.”