Value Based Business

This is a quick post to define the kind of business model I most frequently refer to in posts, videos and podcast episodes.

We can call this business model a “value based business”, although that’s not the only term I use. When I talk about “product and service based businesses”, I’m referring to the same thing. And when I talk about products, services and offers, I’m usually talking about it in the context of a value based business.

So, what exactly is a value based business?

It’s a business based on a simple transaction between you and your customers or clients:

Simple Transaction

The customer gives you money and in return, you provide something that, to the customer, is of greater value than the amount of money they are parting with.

What It Is & What It Isn’t

There are many business models that don’t follow this model of simple transactions. For example, a typical blogging business would follow this course:

  1. Provide information for free.
  2. Gain attention and an audience.
  3. Grow the audience.
  4. Place ads and/or links to affiliate offers on your blog.
  5. Some visitors purchase something from somewhere else and you get a commission.

As you can see, this model is quite a bit more complicated.

Here’s another example of an online business model that isn’t based on a simple transaction:

  1. Create a free product as an opt-in incentive.
  2. Drive traffic to a landing page where said incentive is advertised.
  3. Convert visitors into email subscribers.
  4. Gain subscribers’ attention and trust.
  5. Promote products as an affiliate.
  6. Some subscribers make a purchase and you get a commission.

To contrast this, here’s the product or service based business model that I recommend:

  1. Create something people want.
  2. Exchange that thing for money, with the people who want it.

Of course, just because there are fewer steps involved doesn’t imply that it’s easier. In fact, many people seem to assume the opposite and flock to things like blogging because it seems like an easier option (I disagree).

I will never say that building a business is easy, because it isn’t. I do, however, recommend that you create a product or service based business because of several advantages it has over other models, one of which is that you don’t have to be a superstar to succeed.

I’m also in no way opposed to blogging or email marketing as valuable marketing channels. Heck, you’re reading this on a blog and list-building is so important to me, I created some software for it!

The purpose of this post is not to go into details about all that, though.

The point is simply this: the kind of business model I personally pursue, talk about and refer to is one that is based on a simple transaction of money for value.

This is the business model that I recommend you pursue as well. And to learn how, all you need to do is read the posts on this blog, listen to our podcast and become a subscriber to get some behind the scenes insights.

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About the Author Shane Melaugh

I'm the founder of ActiveGrowth and Thrive Themes and over the last years, I've created and marketed a dozen different software, information and SaaS products. Apart from running my business, I spend most of my time reading, learning, developing skills and helping other people develop theirs. On ActiveGrowth, I want to help you become a better marketer and product creator. Read more about my story here.

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