There is a growing practice in the Internet Marketing business of selling PLR packages as a “Complete Business in a Box.”
I don’t care how many pieces of content are included in the PLR package – how many products, upsells, sales pages, bonuses, or marketing pieces – it is NOT A BUSINESS IN A BOX.
Forgetting the fact that you should NEVER, EVER turn around and sell a PLR product exactly as it is, you still do NOT have a complete business from it. You have a product (or more accurately resources for your own product), you have sales and marketing material, and… not much else.
Right off the bat, a product is not a business. This is actually a common mistake. If you watched the earlier seasons of Shark Tank (the later seasons have far more sophisticated entrepreneurs), you would have heard this multiple times per episode. It doesn’t matter if you have the best widget in your industry, you do not have a business. At best this is a Value Proposition and Revenue Stream (more on this later).
Speaking of industry, a niche is not a business. You could be in the weight loss niche (industry), but that is not a business. That is a Customer Segment (or at least part of one, more on that later).
And while we are at in, Affiliate Marketing is not a business. It’s a Revenue Stream (more… you get the idea).
A business is so much more than any of these. And this is a massive problem, especially in the IM industry. People don’t understand their business because they don’t know what makes up a business.
“Okay, fine Mr Smarty Pants, then what is a business?”
Thanks for asking.
A college textbook might tell you that a business is an organization that engages in the activity of making, buying, and selling goods and services for a profit.
As far as college textbook definitions go, it’s not horrible. There is nothing inaccurate about it, from a very high level. You can see the forest at this level, but you not making out any individual trees… much less the leaves on them.
There are many models out there that map out the pieces of a business. The model I like to refer to is the Business Model Canvas as described by Alexander Osterwalder in his book Business Model Generation.
In the book, Osterwalder describes business as consisting of nine different components. But they are not a linear view, he creates a canvas (or map) for this to better understand the relationship.
“Oh my! Is that what it takes to run a business?”
No. It takes more.
This is just an outline you use for your business. When you fill out all these sections, you have a map to run your business.
Then you have to go do it. You have to implement all of the various parts of your business map.
But let’s at least review the nine parts of the business model canvas, so you can understand all of the parts to a business.
Everything starts with the customer. Who are your customers? What problems do they have that you can solve? What job are your customers trying to accomplish?
These are just the bare minimum of what you need to know. The more you know about your customer, they better your chances of success. And, your business may have more than one customer segment.
The next thing you need to be able to identify is what value you are bringing to your customers. The easy view is what product or service are you selling, but you need to remain focused on your customer at this level. How will you help them do their job? How will you help them accomplish their mission and improve their situation?
A single Customer Segment may have multiple problems and require multiple Value Propositions. And of course, if you have multiple Customer Segments, you could have multiple Value Propositions for each Customer Segment.
Channels are your method of communication with your customers. How do you contact them? How do you market your Value Proposition to your Customer Segment? How do you deliver the value to them?
There are many different channels you communicate to your customers before, during, and after a sale. You may reach out to the pre-sale through mass media advertising. Your customer will contact you to purchase through your sales page on one website, and contact you for support through telephone.
Customer Relations is a business side to your customer relationship. What is the acquisition cost of obtaining a customer? What is the retaining cost of keeping a customer? What is the lifetime value of a customer?
Understanding the economics of your Customer Relations is important for the long term success of your business.
This is where you get paid. What do you charge your customers and how do you get paid? You also need take into account what others are charging for similar Value Propositions.
What resources do you need to research the Customer Segment, to create the Value Proposition, and to maintain the Customer Relations, Channels, and Revenue Streams. This isn’t just about money, this is about anything from an office or production plant to software or online services needed for your business.
What are the Key Activities you need to perform to keep all of the other sections working properly. You can’t neglect an area without consequences. You need to identify the key activities for each section and make sure appropriate resources are applied in each one. Failing to do this will eventually cause a growing business to implode.
All businesses will have some Strategic Partnerships. Suppliers and vendors, advertisers, and all the other organizations you interact with to keep your business working smoothly. If you use an online service, you need to maintain a good working relationship with that service provider, or they could bring your business to its knees.
Every section, including this one, has costs associated with it. You need to know and understand the costs in all nine areas to even have a hope of being successful. Revenue can not exceed expenses if you do not know what your expenses are. All of them.
“Wow, that’s a lot of great theory, but none of this helps me run a business.”
It really does.
To have a properly functioning business, you need to have all nine areas covered. Not just with a plan, but with actual actions performed to maintain and operate them all.
Many startups fail because they don’t understand the interplay of the nine areas. Many start out not understanding their customers or their needs. Many entrepreneurs think up the solution first and then look for a customer who needs it. That is backwards.
Another failure point is when people try to do too much at first. They want to server multiple Customer Segments (i.e. niches) or the try to solve too many problems at once.
They don’t have the resources in place, the key activities defined for even one of them, and they are running around all the time putting out fires… if they are lucky.
A good entrepreneur understands that you start with one Customer Segment, one Value Proposition, and one Revenue Stream. In other words, pick a niche, choose your specialty, and find one way to make money with it by helping the customer. The customer is ALWAYS the first step.
As you do this, you build up the Channels, Customer Relations, Key Activities, Key Resources, and Strategic Partnerships. Keep good documentation on the Cost for each of these.
Then, when everything is moving well, trying adding on something. Look at your options, figure out what is going to take most advantage of what you already have in place.
For example, if you chose to start solving customer’s problems with email marketing by selling them pre-written emails they can use for their own emails, you could branch out and offer a course in writing their own emails. Or maybe even just doing affiliate marketing of other people’s email marketing related products.
The closer you stay to the original, the more you can utilize your existing Channels, Customer Relations, Key Activities, Key Resources, and Strategic Partnerships. And utilizing existing ones will help keep your costs down.
So now let’s come full circle back to our PLR package. What exactly do you have?
You have a Value Proposition but almost never a clearly defined Customer Segment. I already spoke about how backward this is.
You have a Revenue Source, and in some cases more than one.
You have some tools to help you with your Channels.
You may have a list of recommended Key Resources, but they are often tainted by affiliate links. This means they are the ones recommended because the seller receives money if you sign up through the link they provided.
You may also get some recommended Strategic Partners, but they may also come with the same taint as the Key Resources.
The seller could become a Strategic Partner, if you work the relationship right. But that’s more about you then what they sold you.
A few will give you some training material on SOME of the Key Activities you need.
You might argue that they “give you more than half.” With the exception of Revenue Sources, none of the other areas they give you are complete. And even if they gave you eight out of nine, it’s still not a business.
Running a business isn’t a game of ‘close enough’. If you want to win, you need to be nine for nine.