Your Revenue Model - How You'll Actually Make Money

Before you think about scale or systems, you need to get clear on one fundamental question: how will money actually flow into your business?

This might sound basic, but you would be surprised how many smart, experienced people skip this step. They know they have valuable expertise. They know people need what they offer. But they have not thought through the mechanics of how a client actually pays them -- how much, how often, and for what exactly.

Getting your revenue model right matters because it shapes everything else: how you sell, how you deliver, how you manage your time, and ultimately how much money you take home. The wrong model can leave you overworked and underpaid even when you are busy. The right model gives you predictability, margin, and room to grow.

There are several valid ways to structure a consulting or expertise-based business, and each has real trade-offs. The right model depends on your situation, your clients, and what kind of work you want to do. Let us walk through each one in detail.

Revenue Model 1: Retainer + Hourly

How it works: A client pays you a fixed monthly amount (the retainer) for a defined scope of access and support. If they need extra work beyond that scope, they pay your hourly rate.

• Example: $3,000/month retainer that includes 15 hours of advisory work. Additional hours at $150/hour.
• Best for: Ongoing advisory relationships where the work varies from month to month.
• Pros: Predictable baseline income. Upside if clients need more. Easy to manage 4-6 clients simultaneously.
• Cons: You are still trading time, just more predictably. Scope creep can happen if you do not track hours.

Real-World Scenario: Sarah spent 18 years in pharmaceutical regulatory affairs before her company restructured. She set up a retainer model with three mid-size pharma companies who needed ongoing FDA compliance guidance. Each paid $3,500/month for her advisory services, with extra hours billed at $175/hour. Within four months, she was making more than her corporate salary -- and she controlled her own schedule.

The retainer model worked for Sarah because her clients had ongoing, recurring needs. They did not need a one-time project; they needed someone available regularly to review submissions, flag risks, and keep them compliant. The retainer gave her predictable income, and the hourly overflow gave her upside when things got busy -- like when one client was preparing for an FDA audit and needed 30 extra hours that month.

What makes this model fail: The number one killer of retainer arrangements is poor scope definition. If you say "I will be available for compliance questions" without putting a boundary on it, you will end up answering calls at 9 PM on a Saturday. Be specific: 15 hours/month of scheduled advisory work, email responses within one business day during business hours, one monthly strategy call. Anything beyond that scope is billed hourly.

How to price your retainer: Start by estimating how many hours per month the client will realistically need. Multiply by your target hourly rate. Then add a 20-30% premium for the convenience and priority access the retainer provides. If your hourly rate is $150 and you estimate 12 hours/month of work, the math is: 12 x $150 = $1,800, plus 25% premium = $2,250/month. Round up to $2,500 for simplicity.

Revenue Model 2: Project-Based

How it works: A client pays a fixed fee for a defined project with a clear start, finish, and deliverable.

• Example: $7,500 to audit compliance operations and deliver a written risk report with recommendations.
• Best for: Clients who want a specific outcome with clear terms.
• Pros: Higher revenue per engagement. Clear scope makes delivery manageable.
• Cons: You need to keep winning new projects. No predictable monthly baseline. Scope can expand if you do not have tight agreements.

Real-World Scenario: Marcus spent 20 years in manufacturing operations, the last 8 in supply chain optimization. After his layoff, he launched a project-based practice doing supply chain audits for mid-market manufacturers. Each project was priced at $12,000-$18,000 and took 4-6 weeks to complete. He could run two projects simultaneously, delivering one while selling the next.

The project model worked for Marcus because his clients had specific, finite problems. A manufacturer does not need ongoing supply chain consulting every month -- they need someone to come in, analyze their operations, and hand them a roadmap. Once the project is done, it is done.

The feast-or-famine problem: The biggest risk of project-based work is the revenue gap between projects. You deliver a project, you get paid, and then silence while you hunt for the next one. Smart project-based consultants solve this by always having a pipeline -- they are selling while they are delivering. Rule of thumb: dedicate 20% of every week to business development, even when you are busy with a current project.

How to price projects: Never price a project by estimating hours and multiplying. That is a recipe for undercharging. Instead, price based on the value of the outcome. If your supply chain audit typically saves a manufacturer $200,000/year in waste, a $15,000 fee is a steal -- and both you and the client know it. Frame the price in terms of ROI: "For a $15,000 investment, clients typically see $150,000-$250,000 in savings within the first year."

Protecting your scope: Project-based work lives and dies by the scope document. Before you start any project, write a one-page scope agreement that covers: what you will deliver, what you will not deliver, how many revisions are included, the timeline, and what happens if the client wants to add work. Get it signed before you start. This is not bureaucratic -- it is how you protect your profit margin.

Revenue Model 3: Hybrid (Retainer + Group Services)

How it works: You combine ongoing 1-on-1 retainer work with group-based services that let you serve more people at once.

• Example: $2,500/month retainer clients + $750/person quarterly group workshops + $97/month for a resource library.
• Best for: Businesses that want to grow beyond a handful of 1-on-1 clients without burning out.
• Pros: Multiple revenue streams. Better income ceiling. Group work creates community and referrals.
• Cons: More things to manage. Takes time to fill a group.

Real-World Scenario: Denise was a senior HR director at a tech company for 14 years. After her layoff, she started with four retainer clients, each paying $2,500/month for ongoing HR advisory services. But she quickly saw that many smaller companies had similar questions and needed similar training. So she launched a quarterly "HR Essentials" workshop for startup founders at $695/person. She caps each workshop at 15 people.

Now her revenue model looks like this:
- 4 retainer clients: $10,000/month
- Quarterly workshops (15 people x $695): $10,425/quarter ($3,475/month average)
- Total: ~$13,475/month average

The beauty of the hybrid model is that each piece reinforces the others. Workshop attendees who realize they need deeper help become retainer clients. Retainer clients who want training for their teams become workshop customers. Referrals flow in both directions.

Building the group component: Do not launch a group service until you have served at least 3-5 individual clients. Those early clients teach you what people actually struggle with, what format works best, and what they are willing to pay. Your group service should be a distilled, structured version of what you have been doing one-on-one -- not a completely new offering.

The resource library play: Some hybrid consultants add a low-cost digital component -- a monthly subscription to templates, checklists, video tutorials, or a members-only community. This creates a third revenue stream that is mostly passive once created. It also serves as a lead magnet: people who subscribe to your $97/month resource library are the most likely candidates for your $695 workshop and eventually your $2,500/month retainer.

Revenue Model 4: Productized Service

How it works: You offer a specific, standardized service for a fixed price every time.

• Example: "Compliance Readiness Assessment: $3,500. Delivered in 10 business days. Includes written report."
• Best for: Businesses where the core work is repeatable enough to be standardized.
• Pros: Easy to sell (clear scope, clear price). Easy to deliver (same process each time). Easy to delegate eventually.
• Cons: Less customization, which means some clients will want something you do not offer.

Real-World Scenario: Kevin was a cybersecurity analyst for 16 years at a defense contractor. He noticed that small and mid-size government contractors constantly struggled with CMMC (Cybersecurity Maturity Model Certification) compliance. Instead of offering custom consulting, he created a productized service:

"CMMC Gap Assessment: $4,500. You get a 3-hour onsite review, a written gap analysis report, a prioritized remediation plan, and a 1-hour follow-up call to review findings. Delivered in 15 business days."

Every client gets exactly the same service. Kevin follows the same 47-point checklist every time. He can deliver two assessments per week because the process is dialed in. At $4,500 per assessment and 6-8 per month, he is generating $27,000-$36,000/month -- more than double his previous salary.

Why productized services sell well: Buyers hate ambiguity. When someone sees "custom consulting -- call for a quote," they do not know what they are getting or what it costs. When they see "CMMC Gap Assessment: $4,500, delivered in 15 days, includes written report and remediation plan" -- they can make a decision immediately. The clarity of a productized service reduces friction in the buying process dramatically.

How to productize your expertise: Look at the work you have done most often. What is the 80/20? What do most clients need that follows a similar pattern? That is your productized service. Strip away the customization, build a repeatable process, and price it at a flat rate. You can always offer premium add-ons for clients who need more.

Choosing Your Starting Model

For most displaced workers, Model 1 (Retainer + Hourly) is the right entry point. Here is why:

• It is the easiest to explain. "I help companies with X on an ongoing basis. My retainer is $Y/month." That is a sentence most buyers can understand immediately.
• It is the easiest to sell. You are not asking for a big project budget or asking people to attend a group event. You are offering steady, reliable expertise.
• It gives you the most learning. Working closely with a few retainer clients teaches you what they actually need, what they value most, and what they would pay more for. This learning feeds everything you do later.

Add the hybrid elements once you have served 3-5 clients and you clearly understand the patterns in what they need.

Exercise: Choose and Define Your Revenue Model

Take 30 minutes and work through these steps:

1. Pick your starting model. Write it down. If you are unsure, start with Retainer + Hourly.
2. Define the scope. What is included? What is not included? How many hours per month? What is the hourly overflow rate?
3. Set your initial price. Use the pricing guidance above. Do not agonize -- your first price is always a draft. You will adjust after your first 2-3 clients.
4. Write your one-sentence offer. "I help [specific audience] with [specific problem] on a [retainer/project/ongoing] basis for [$X/month or $X per project]."
5. Identify your 12-month model evolution. Where do you want to be in a year? Hybrid? Productized? Write down the path from your starting model to your target model.

Example completed exercise:

• Starting model: Retainer + Hourly
• Scope: 12 hours/month of compliance advisory work, email responses within 1 business day, one monthly strategy call. Overflow at $175/hour.
• Initial price: $3,000/month retainer
• One-sentence offer: "I help mid-size government contractors stay compliant with federal regulations on an ongoing basis for $3,000/month."
• 12-month evolution: Add a quarterly compliance workshop ($695/person) by month 6. Launch a CMMC readiness assessment as a productized service ($4,500) by month 9.

Common Revenue Model Mistakes to Avoid

Mistake 1: Pricing too low out of fear. You just got laid off. You are anxious. Someone expresses interest and you quote a low price because you are afraid they will say no. This is how you end up working full-time hours for part-time pay. Price based on value, not on your anxiety level.

Mistake 2: Trying to do all four models at once. You will spread yourself too thin and execute none of them well. Start with one. Master it. Then layer in the next.

Mistake 3: Not tracking your actual hours. Even in a retainer model, you need to know how many hours you are actually spending per client. If your $3,000/month retainer is consuming 30 hours/month, you are working for $100/hour before expenses -- and that may not be enough.

Mistake 4: Ignoring the renewal conversation. Every retainer should have a defined term (90 days, 6 months, 12 months) with a renewal conversation built in. Do not let retainers drift along indefinitely -- that is how clients suddenly cancel without warning.

Key Takeaways:

• There are four main revenue models: Retainer + Hourly, Project-Based, Hybrid, and Productized Service
• Each model has different strengths for predictability, scalability, and ease of selling
• Start with Retainer + Hourly -- it is the easiest to explain and provides the most learning
• Add hybrid elements (group workshops, courses) after you have served 3-5 clients and understand their needs
• Price based on value, not fear -- your first price is a draft, but do not start from a place of desperation
• Define clear scope boundaries in every model to protect your time and profit margin