If you are an information marketer, coach, speaker or internet marketer, this article is for you.
Business, like anything else is constantly changing and evolving. Constantly improving.
Most people come out of school are trained to get a job. In other words, trading time for money.
Some people eventually break out of the confines of a job and enter a “First Stage Business”. Typically, this is in the form of a consulting, coaching or if you are lucky, a speaker business where you sell your information from a stage.
First Stage Business
Typical characteristics of First Stage businesses is that they are small and they often suffer from the classic “Michael Gerber Success Paradox”. In “eMyth”, Mr. Gerber mentions that as your business gets more successful, the more time it sucks you away from what you love. In other words, the more clients you have, the less freedom you have…the less time you have to spend with friends and family. If you are a coach, you know what I am talking about.
First Stage business have the advantage of working from home and being able to choose which 12 hours you want to work.
Don’t get me wrong. Many people do fine being a “First Stage Business”. This is in no way making a moral judgment or criticism on your business.
Second Stage Business
A second stage business typically evolve from first stage businesses. This is where a coach/consultant/speaker “productize” and “systematize” their information. In other words, make their content available in CD/DVD format (or deliver it over the Internet) so that they can automate their information and system.
The advantage of a Second Stage Business is that one is no longer trading time for money. In other words, in a First Stage business, if you are not working…even if you are paid $1000/hour, you are not making money. With a Second Stage business, you could have your product sold over the internet, hire an employee to handle customer service and shipping…and still make money while you travel.
The disadvantage of a Second Stage Business is that it is strictly transactional. This means that unless customers are buying from you, you are no longer making money. As a result, you are constantly forced on a “product churn treadmill”. You have to constantly come up with new products to sell to your customers, or sell someone else’s product.
For example, let’s say you are Tony Robbins. You may have started off in life giving out personal coaching and run small seminars to people (First Stage). You eventually discover that you can share your gift to more people if you can evolve into a Second Stage Business. You would create a book “Awaken the Giant Within”….and sell your book. You then make CDs, DVD sets of your courses and then invite more people to your bigger seminar events.
One of the problem is, when you run a Second Stage Business, you are also leaving a lot of money on the table.
Third Stage Business
As the name inplies, a Third Stage Business is an evolution from a Second Stage Business. In addition to selling information, you create an environment I call “Tether-ware”; where your clients become dependent on you for their personal growth.
In a Second Stage business, unless you have a new product to sell, or a bigger product to upgrade your clients to…you are not making money. ie. It is strictly transactional. By transforming your business from a transactional into a residual business model, you can dramatically improve your business while helping more people at the same time.
Some people are beginning to realize the power of this. Some have called it a “continuity program” or a “membership website”…but few actually understand the mechanics of what it takes to build a Third Stage Business. Building a true Third Stage Business is beyond just putting a membership website together…much more.
Being the creator of one of the biggest Third Stage Business companies in the Internet Marketing space (1Shoppingcart.com), you could say I know a thing or two about building Third Stage Businesses. Examples of Third Stage Businesses include a telecom company, a utility company, or a company that offers ongoing coaching…where people pay month after month to be trained to grow their business or help them move further in their life.
In this series, I am going to discuss what it takes to migrate your business from a First/Second Stage Business to a Third Stage Business. People pay me a lot of money for this information, and this is the first time I’m sharing this to the public. In order for me to do this, I need your help. If you know other people who can benefit from this, please refer them to this article. As soon as I get at least 1000 visitors to this article, I will release the next module. Call this an experiment in social media. I’m curious to see how many people we can get involved in this conversation.
Please retweet this, and blog about this content.
Sincerely
George Tran
Author of “The Social Marketing Manifesto”
Success Strategies for Small Businesses using Social Media
www.socialmarketingman.com
www.twitter.com/georgetran
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