In this post, I’m talking about businesses at scale: Which model is the easiest to run, support and sell?
Today I’m involved with five different businesses that follow five different models.
All of them deliver products that generate 7 figures or more a year…
But in my experience, if your goal is to build something that supports your lifestyle, gives you freedom, and generates real wealth…
Then one business model crushes the competition.
In this blog post, I break down my 5 businesses to determine which model is the best at scale.
These businesses are:
- BOOM! By Cindy Joseph – Ecommerce (Shopify) direct response
- BeeFriendly Skin Care – Ecommerce (Amazon) direct response
- Zipify Apps – Software as a service
- Smart Marketer – Information, influencer brand, online courses
- Blue Ribbon Mastermind – Coaching, subscription, events
(I’ve also done dropshipping and affiliate marketing, but since those models actually build someone else’s business and not your own, I won’t focus on them here.)
First… What is “Scale?”
Before we talk about business models at scale, let’s define what scale means. These 5 businesses are all at what I call “scale” for two reasons:
1) They’re generating at least a quarter million dollars/year in revenue.
2) They have ongoing processes like employees, customer support, and marketing cycles.
The 5 businesses we’ll be looking at in this post range from $1.5M – $20M in yearly revenue, and from 1 – 35 full-time employees.
Now, when you analyze a business at scale, the main things I look at first (because they’re first to break) are product delivery and customer support.
#1 Creating & Delivering Your Product
Ecommerce: BOOM! & BeeFriendly
In both of my physical product brands, I essentially sell tubs of goo. It’s high-quality goo, sure, but goo nonetheless…
And while technically a Shopify-only business model like BOOM! ($20M) is completely different than an Amazon model like BeeFriendly ($2M), the creation and delivery of the product remains the same.
To deliver this product, you just need to create a one-time custom formula, select your tub, slap a label on it and add a package insert or two.
And at scale, it’s just more tubs and more goo.
Whether you sell 1 or 1,000 unites, this process isn’t going to change and neither is the formula. Pretty straightforward, right?
Now in contrast to that, let’s look at my software as a service business, Zipify Apps.
SaaS: Zipify Apps
This business develops and sells plug-n-play apps for Shopify stores, and it does around $2M/year.
But here’s what the products actually are: 1,000s and 1,000s of lines of code.
And this code is constantly changing, because we’re constantly adding new features and updating the core product.
Which means to scale these products I need front-end engineers, back-end engineers, QA’s, and project managers (just to name a few)…
And on top of that, we’re constantly fixing bugs and adding integrations with other apps, so the products are being reformulated all the time.
For this $2M brand I currently have 35 employees working to deliver 2 products that generate less than 1/10th of BOOM!’s revenue (which requires only 15 employees).
This is part of the reason why SaaS is without a doubt the hardest business model I’ve ever done.
Info Publishing: Smart Marketer & Blue Ribbon
Now let’s talk about the business you’re engaging with now.
Smart Marketer is an information publishing business model, and the two type of products it has are:
1. Digitally delivered courses (like Smart Facebook Video Ads or Smart Google Traffic), and…
2. Blue Ribbon Mastermind — a group of about 100 six-, seven- and eight-figure business owners — which focuses on coaching, consulting and events.
But when it comes to scale, these products have a major problem: They go bad.
The marketplace changes every year, and the course information stops being relevant as the industry changes…
So every 6 months to a year, I have to update every single one of these courses.
And that’s the difficulty of info-products: they’re constantly going out of fashion and needing to be remade.
Services & Consulting
I sold millions of dollars in services to other business owners in the late 2000s, and even though I stopped the business a few years ago, I’ll include it here for argument’s sake.
The difficulty with services on the product side is you need a big team to scale.
The more services you sell, the more people you need to implement them and the more people you need to communicate with your clients…
And if you’ve ever sold a service before, you know that the client always wants a little more of your time and energy, making it hard to set boundaries around where the “product” ends.
And the Winner Is…
I support all of these business models and each one can build a business that works best for you.
But if your goal is to build a brand that supports your lifestyle, gives you freedom and generates real wealth…
And that can be sold one day as an asset…
Then in my experience, ecommerce wins by a mile.
Now let’s talk about the other huge part of running a business at scale: customer support and what happens after someone buys your product.
#2 Customer Support
Ecommerce: BOOM! & BeeFriendly
Customer support is pretty simple when it comes to ecommerce, because it’s mainly questions about products and refunds — most of which are handled by your FAQ page.
So for a $20M business like BOOM!, I have 7 or 8 customer service employees.
If you look at BeeFriendly — which does $2M a year on Amazon — it only takes 1 person to do all of the support.
$2 million in revenue = 1 customer support person!
SaaS: Zipify Apps
Remember how I said Zipify’s products are always changing?
Well not only do you need the engineers to implement these changes, you also have to document them.
So with each new feature or integration, our help section needs to be updated with a video and standard operating procedure…
THEN, our support agents need to be able to communicate these changes to the customers.
And because the products are so technical in nature, we get more users asking questions and therefore need more team members on staff.
Right now, there are 7 support agents working for Zipify. That’s the same as BOOM! and it’s barely 1/10th the size!
In other words, it takes 10x the energy to support my SaaS business at scale than my ecommerce business.
Info Publishing: Smart Marketer & Blue Ribbon
Like my ecommerce brands, Smart Marketer is actually pretty easy to support…
But you do need a high-level support person who understands the information you’re selling and how to apply it. (Thanks Steve!)
Services and consulting are similar, too, but you need more customer support agents to communicate with all your clients.
And the Winner Is…
When it comes to customer support, once again ecommerce is far and away the easiest business model to scale.
But there’s something else you should know before we can choose the best model:
Can you sell the business or not?
Because real wealth doesn’t comes from running a business, it comes from selling it.
And while wealth isn’t my #1 goal in life, one day you may want to liquidate your business to put those resources into another project.
So, which of these business models is the easiest to sell?
#3 Best-Selling Business Model
BOOM! and BeeFriendly are cash-flow businesses right now, but they are also assets that I can one day sell.
Zipify Apps is running at break even (with all revenue going into funding growth), but it is also an asset I could sell if I chose to.
However, I could not sell Smart Marketer or Blue Ribbon Mastermind.
Why? Because they’re both influencer businesses, and…
Influencer businesses are not assets.
If I leave for two months, BOOM! does fine, BeeFriendly does fine…
But Smart Marketer cannot exist without Ezra Firestone; take me out of the equation, and it will cease to function.
It’s entirely a cash flow business, and only as valuable as next month’s revenue.
So as much as I love influencer businesses — and I really love Smart Marketer! — it’s just not sellable.
So why would I start an influencer business if it requires so much time AND it can’t be sold?
Because I enjoy it!
I’m chasing fun and pleasure, not success, and it’s super fun to share with you what’s going on in my life and in my work.
So What’s the Best Business Model Overall?
If it’s your goal to create a business that requires the least amount of support, can scale to 8 or 9 figures without needing all your time, and that you can someday sell…
Then I can tell you definitely: No other business model works better than a physical products ecommerce store.
And specifically, the ecommerce model where you private label a product and build your own brand — not dropshipping or wholesaling.
Ecommerce is flat out the best model to support the most pleasurable lifestyle, but it’s not the only one I recommend…
Influencer marketing — where you’re building a brand around yourself — is also super fun.
A service business, however, is hard to scale…
And SaaS is just plain hard. You really have to love what you’re doing if you’re going into the apps marketplace because it’s expensive and my goodness is it difficult.
The last pillar of business at scale that you should focus on, and that’s the marketing advertising and storytelling side of it.
Because every one of these business models will require that you do this well.
0:44 You reach “scale” in a business when you reached at least 6 figures in revenue and you have ongoing processes
5:00 SaaS business are very hard to scale
10:55 It’s a lot harder to support a SaaS business than it is to support an Ecommerce business
12:04 True wealth is generated through the liquidation of assets
13:50 An influencer business is not an asset, it’s cash flow
18:38 The number one business model to run at scale is Ecommerce
Click Here For Video Transcript
Well, for me, I think you reach scale in a business when you’ve reached at least six figures in revenue, probably more like a quarter million dollars a year. That’s kind of like scale, and you have ongoing processes. You have things that are happening ongoingly. Like, you’ve got maybe an employee or two, you’re responding to customer support tickets. You’ve got ongoing marketing process. You kind of got a business that’s going at scale.
Now, I currently run three different models, you could argue four different models, all over seven figures a year. So all at scale. And I have done a bunch of different models. Now let’s talk about business models at scale and which one is the best? And we’re going to get into this in the Q&A because a lot of people are asking me, what’s the best business model?
I can tell you, when you look at a business at scale, there are three parts of the business. The first part is product. It’s supply chain. It’s how do you manage this business ongoingly and deliver the product to the customers? All right, let’s look at e-commerce. You might be wondering, what is all this stuff on my desk? Let’s look at e-commerce. So in e-commerce, I literally sell tubs with goo in them. Really good, high quality goo, but it’s like a tub of goo, right?
It’s like, you know, you come up with your custom formulation. You get your tub. You fill it with goo. You stick a label on it, right? Here’s a label. These are the labels for my products, right? You stick these labels on it. And you put a lid on the thing here. Bam [SP]. You put your lid on it. You ship it out in a little bag with a little piece of what’s called a ride-along mailer, right? A package insert.
So at scale…and that’s just my face you’re looking at there. At scale, it’s more tubs, more lids, right? More tubs, more lids, more goop to go in the tub, right? You fill it with more goo. To give you an example of one of my products that is full here, some of my products come in organza bags, maybe a little bit of shrink wrap. The product’s got a little shrink warp on it. whole. Pull it open. Look, this is the goop that’s in the tub. right? This is actually a stick component but it’s just…you know, it’s still goo. I mean, it’s just a little bit harder goo. It’s really good stuff, you know.
It’s good for your lips. But the product is incredible. But the reason why I’m, like, making the joke of a tub of goo is because honestly, at scale, the formula for this never changes. This is the same formula here, no matter how many you sell. This is the same component, no matter how many you sell. This is the same label, no matter how many you sell. This is the same ride-along mailer, no matter how many you sell.
Now, as an opposition to that, as far as products at scale… This is a physical product, e-commerce business, direct to consumer… I am shipping these products to the consumer. I sell 15,000 to 30,000 of these a month. At scale, supply chain, yeah, you’ve got to get the components and stuff, but supply chain is easy compared to software as a service, for example.
Now let me show you my computer screen to show you a software as a service business. This is a business called Zipify Apps, right. And I sell software as a service applications for Shopify stores. So these apps here plug into your Shopify store. So this is a software as a service business that sells apps for Shopify stores. You plug these into your Shopify store. It makes you get more from your store. Like, you can build landing pages. do up sales and stuff.
Now let’s talk about the product at scale. So this product at scale, it’s actually a code base. It’s actually just…I mean, if you were to print it out, it would look like this paper. It’s just a bunch of code, right? It’s just constantly expanding. The product is not the same thing. I’m not just mixing more goo. I’m actually adding to the code base. I’m a code dealer, man. I’m dealing code. I’m adding thousands of lines of code to these products every week, which means to scale that product, I need front end engineers, back end engineers, QAs, project managers, right?
So, like, I need more people as the product scales. And I’m constantly fixing bugs, adding in integrations. The product is changing all the time. It’s so difficult at scale. The product is…this business here, Zipify Apps, which is an app business for Shopify stores here, this is Zipify page as one of our products, absolutely without question far and away the hardest business model I have ever been involved in by far. The product is so difficult. It’s for sure the hardest thing to fulfill on that I’ve ever done. And I’ve done a lot of stuff.
Now, let’s talk about another business. So that business does between $1.5 and $2 million a year annual recurring revenue. So it is at scale. I have 35 developers on staff just for the product as opposed to like, you know, 15 people in my factory who make this stuff, right? So at scale, for a business the 10th of the size, the product takes more people to create and is harder to create.
Now, let’s look at Smart Marketer. Smart Marketer, this is the business that you’re engaging with right now. It’s an information publishing business where I create, you know, videos and content. And I also sell, you know, informational courses. So basically, the two products that Smart Marketer has are digitally delivered informational courses and you can see for example, here’s like my Facebook video ads course, this is my members area.
And you can go through the courses and consume them. And it’ll teach you about how to run Facebook ads for your business or how to do different other things in your business. So Smart Marketer sells digitally-delivered video information and has a mastermind, which is a group of about 100, 7, 8, and 9-figure e-commerce business owners where it’s, like, more coaching, consulting, events.
And so when you look at those two models…and just we’re only on product so far. There are two other sides of the business. We’re just on product. So for Smart Marketer, the problem with product is while it’s easier than software as a service, this product goes bad, right? Facebook changes every six months to a year. So every six months to a year, I have to update every one of these courses, right? Every one of these courses needs to be updated. So the product is constantly going out of fashion. And then you’ve got to remake it.
So it’s very hard to…it’s a great business model. It’s one I participate in. I’s also an influencer business model, which we will talk about in a moment, why I would do information publishing when it’s definitely not the best way to make money. It’s for sure not the best way to make money. And it’s for sure not the best business to work on, if you want a business that doesn’t involve you all the time. But we’ll talk about that in a second. As far as the product goes, it goes out of fashion quite often, right? So it’s hard to keep that up to date.
Now, let’s move to services. I ran a advertising agency and design and development agency in the late 2000s for e-commerce businesses where I was doing services for other business owners. And I sold millions and millions of dollars’ worth of services. Now, the problem with services on the product side is, the more services you sell, the more people you need to actually implement on the services and the more people you need to actually talk to the people that you’re selling the services about what happened, right? And so it’s also really hard to set containers.
If you’ve ever sold a service, you know that the person that you’re selling it to is always going to push for a little bit more. They want another thing. They want this tweak. They want a little bit more of your time and energy. So setting boundaries around where the product ends is where I struggled in services. I had a real hard time setting boundaries around, like, where the product ended. Like, when was I done with what I had committed to, to sell them? It’s ultimately why I moved into software as a service because it’s ongoing subscription revenue, rather than just selling a $10,000 development job one off.
The other thing about my services career, one of my big consult clients was an adult novelty store. Let me tell you, there’s stuff out there you didn’t even know about. It’s a whole story for another time. But I did a lot of advertising for really strange brands. I learned a lot. It was cool. So services and consulting is very difficult as well on the product side. All good businesses, all wonderful models. I support all of them. But if the goal is, what is the best business model for a lifestyle business that you can set up and can run ongoingly without your time and energy and attention in the actual business all the time and can be sold one day as an asset, so far, e-commerce crushes Software as a Service, information publishing, coaching and consulting, and services.
And then of course there’s affiliate marketing and some other models that I’ve done as well at scale. But those, you’re not building your own business. You’re building someone else’s business, you know. So there’s no point. Drop shipping, kind of no point because you’re not really building your own brand. So product, as far as product goes, physical products, win. Now, let’s talk about support because that’s another big part is, supporting the business, supporting the people who have purchased from you. It’s a huge part of a business. It’s pillar number two.
With physical products, it’s quite simple. I mean, take a look here. This is Boom by Cindy Joseph. This is my $20 million a year e-commerce store. And if you look at the FAQ, I mean, this is kind of the support. Like, it’s questions about the product and refunds basically, right? For B. Friendly, this is the $2 million on your Amazon brand that I built with a business partner. Again, you know, it only takes one person. One person supports B. Friendly at $2 million a year in revenue. One person does support for that.
Now, move over to software. And for Boom, I have, like, seven or eight agents working on support. But it does like $20 million a year. So there’s a lot more inquiries coming in, live chat, email, stuff like that. But the support is pretty straightforward. It’s easy to do. Now, look at software as a service. You know how I said we’re constantly changing the product? We’re constantly adding stuff to it. Well, not only do you have to do that, to keep it up to date, to keep it improving. But you have to document everything that you did. And this is our help section here. You can see, every time we do something, we have to create a video about it. We have to document in a standard operating procedure for the people who are, you know…give me a little heads up there.
We have to document everything that we’ve done. And then, our support agents, need to know everything that happened and what the app does better than the people who are using the app in their business, which means the support has to be super high level. So it’s a lot harder to support a software as a service business than it is to support a e-commerce business, just because of the technical nature of a business owner using software to support the business. Let me give an example of this. For Zipify Apps…and I’ve got all this stuff in front of me. For Zipify Apps, I have seven…is it right, Anthony? Seven agents? Seven support agents. That is basically the same amount as Boom. It’s a tenth of the size and it has the…so basically, it takes 10 times the energy on support as an e-commerce business does.
Now, services and consulting, a Smart Marketer information publishing is actually pretty easy to support. You do need a high-end support person who knows what they’re doing. But information publishing is not super hard to support. Services consulting, doing things for people, it’s hard to support because you got to talk to every person that you’re doing services for. So on the support side, far and away, physical products. No question. It just crushes every other model, if the goal is, build a business that can scale without your direct involvement in every area of the business, that is an asset, that someone can buy, that you could sell one day, because true wealth is generated through the liquidation of assets.
True wealth does not come from cash flow businesses most of the time. This is a cash flow business. The business I own, I run, its profitable, and I run it for cash flow. But it is an asset that I could sell one day. Zipify Apps, I don’t run it for cash flow, I’m running it at break even basically. I’m investing everything back into it. But let me tell you about Smart Marketer. So Boom by Cindy Joseph, which is this brand here, and B. Friendly, are assets that someone else could buy from me one day and that are worth a multiple of their yearly profit, five to eight times their yearly profit. I could sell it to someone else. It does not require my direct involvement. It has a system, has a product line, has infrastructure.
Software as a service, you could also sell. So it is also an asset that you could liquidate. And again, true wealth generation comes from the sale of assets. Ideally, you have cash flow businesses and assets that you’ve liquidated to give you large amounts of capital that you can deploy into the marketplace and invest in real estate and buy businesses and stuff. But that’s how you get to true wealth creation, if that’s the goal, which for most people it is, right, generate wealth, in addition to, not my only goal, to one of them and I’ll explain that.
But Smart Marketer, information publishing, which is this business here, let’s take a look at Smart Marketer. Tell me what you notice when you go to the blog. We’re gonna let this blog load up here. But every one of these businesses, every one of these videos, pretty much every one of them now, I’ve started to diversify a little bit. But still, Smart Marketer is an influencer brand with me as the influencer. I am Smart Marketer. Smart Marketer does not exist without Ezra Firestone. So it’s about me.
And by the way, I’m a big fan of influencer businesses and I’ll explain why. But you have to understand that an influencer business is not an asset. An influencer business is not an asset. It’s cash flow. Smart Marketer is only as valuable as the next month’s revenue from my courses, from my mastermind. It has no assets value. I can’t sell it to someone else. And 95% of the information businesses that you see out there are the same way.
They’re built around one person’s persona. They require that person to work in them. And their value is the enjoyment of working on the business and the cash flow it generates. It is not an asset that you could sell to someone else. Now, why would I do an influencer business if it’s not the best way to make money because it is certainly not the best use of my time, if the goal is to make money? Because I love it. It’s super fun. I like having an audience. I like talking to you about what’s going on in my life. I like telling the stories of what’s…you know, I really enjoy it. It’s so much fun, which is why I do it. And it’s a great business.
So I think everyone online today who has a passion for anything, should build an influencer business because an influencer business is, “Hey, look at what I’m doing and look at how it’s working for me.” And if you’re doing something that’s cool in any area, there’s other people who want to be doing it, who could learn from your experience. So you could have courses. You could have events. You could have masterminds. You could do blog videos.
It’s just a really fun business model, if the goal is to really enjoy your work life, which is my main goal. I am chasing fun and pleasure, not success. I think people who chase success oftentimes miss out on having fun. So I’m trying to have a good time and also have success, and have a good time first and foremost. So let’s now move on to the third part of a business. So, so far e-commerce is crushing all of these business models by a very, very, very long margin.
The third part of a business is advertising, storytelling, sales funnels, marketing. Every one of these models, every one of them, is going to require that you do that well. Creating videos that you can put on YouTube, Facebook, and Instagram that are compelling, that engage a particular group of people in a conversation about a specific set of experiences that they’re having. Comment on those experiences. Add value to their life. Get them to subscribe to you by consuming your content because if someone watches your video, that’s a subscription. They’ve just subscribed to you because you can re-target the people who watch.
Getting them to visit your website, like your fan page, give you their email address, whatever and then making them offers for things you think they’re going to be interested in, your physical products, your information products, your software as a service, whatever. So you have to do that well. And if you’re looking at it, like, no matter what business you choose, services agency, consulting, coaching, events, and masterminds… And the reason why I say I’m doing four business models, actually five, Amazon business model is different from Shopify direct response business model.
So Boom and B. Friendly are two completely different business models. B. Friendly is Amazon only. Boom is Shopify direct response only. I also do information publishing, which is digitally-delivered courses. There’s a second business model in there, which is a mastermind group, which is its own business. Blue Ribbon Mastermind is its whole own thing. Two events a year, all kinds of stuff. It’s just really a different model. And then obviously, software as a service. So if the goal is to build a business that is the most valuable asset for you to sell someday, and is the easiest to run ongoingly without your direct involvement that can scale without you having to be forced in it all the time, e-commerce is a no-brainer. It really is.
I can tell you definitively as someone who has run so many different business models that scale over the years, e-books, I mean, I have done it all. And I always will participate. It’s why 80% of my energy goes in the e-commerce because it’s a lot of fun. It’s really fun to tell stories and do marketing and build sales funnels and do videos about physical products. It’s just widely applicable. It’s the most valuable asset. It can scale the easiest because you can put in copywriters and advertisers and tech people and project managers.
And, you know, you can build an infrastructure that supports the growth of business. If I leave for two months, Boom still goes. Boom does fine without me. B. Friendly does fine without me putting attention on it for two months. Zipify kinda crumbles. I mean, our Zipify has a really good team now. But I still I’m like, in it, you know, on a daily basis. Smart Marketer crumbles because I am in it. You know, I’m pushing it forward. And so, but I love doing those. I’m doing those as projects that I love being involved in. You know, I like doing that work. But if the goal is to build a business that can scale and ultimately be an…and run at a profit and be a cash flow business that you can build systems around and ultimately that you can sell, e-commerce is far and away the best business model.
Specifically, e-commerce where you’re either private labeling a product, you know, creating your own brand essentially, where you’re either manufacturing, creating your own custom product or private labeling someone else’s product and building a brand around that, not drop shipping and not wholesaling and not some of these other models, which we can talk about later because this video is kind of long. But I hope that this has expressed to you my viewpoint that the number one business model to run at scale is e-commerce. Take your hands. Hold them up. Hold your hands up. Put them down. Hands down. The best business model out there.
My name is Ezra Firestone, this is smartmarketer.com. I hope you’ve enjoyed this video on why I believe as someone who currently runs, I would label…now I’ve moved it to six, you know, because I’ve realized that actually inside the Smart Marketer, there’s two models. B. Friendly and Amazon are really two separate models. Zipify is a whole different model. So anyways, five or six different business models at scale, all doing millions a year, Boom doing eight figures. I can tell you definitively as someone who’s been in it for over a decade that e-commerce really is the best model, if you’re looking for a business model that is, like, going to support you in having the most pleasurable life.
Now, influencer marketing where you’re building a brand around your own persona and selling courses or events and stuff is so much fun. So I recommend that too. Software as a service is just playing hard. You have to really, really, really love what you’re doing if you’re going to get into that business model because it is expensive and boy, is it hard. God dang. It’s hard. It is the hardest business I’ve ever done. And I really enjoy it because I like a challenge. I’m always kind of up for something new, you know, but it’s hard. I don’t recommend that one as your first one for sure.
But definitely, influencer marketing is a lot of fun and e-commerce for sure the best model. And now if you want to run a services agency or do affiliate marketing or do any of that other stuff, right on. I’m not saying those aren’t good. I’m just saying that my experience has been that they’re more difficult to run ongoingly, if the goal is to build a business that supports your life and you having a pleasurable life while you’re running your business. So Ezra Firestone, smartmarketer.com. Thanks for watching. Peace out.