Sunday, July 10, 2016

You Need Three Businesses – Not Just One

When I was growing up, they had a saying in business.  There’s the product you market, the product you sell, and the product that makes money.  The example was McDonalds which marketed the Big Mac.  When you bought a meal they would ask “want some fries with that?”  They made almost all of their profit off the coke drinks.  At the time it was rumored to be around 90% profit margin.
In today’s business you need three products:
The product you market – your brand, your mantra, your flagship product that everyone wants.
The product that generates cash—this is basically a service business that pays the bills now.
The product you build to sell as a business unit later–this is typically a SaaS business model that provides recurring revenue.
It can be hard to build a SaaS business when the only thing you are building/selling is the SaaS product. Consider adding more products around it to make the business easier to grow.

Best regards,

Hall T.