Nine Steps to a Profitable Business
The business model decisions that actually drive profit, weighted by how much they matter.
By James Schramko · Updated July 2026
Three of these nine decisions set the ceiling on everything else. The other six are execution. Spend your judgment where the leverage is.
1. Less
Principle. Success is getting clear on what works and deleting the rest.
Decision. Look at the last twelve months. Find the offer that makes the most profit for the least delivery friction. Find the products, processes and team members producing results, and the ones that are not. Cut everything below the line, even the parts you like.
In about March 2024 I said on stage that I work around 10 hours a week for around $1M a year in profit. Getting there took subtraction. I sold two agencies, closed my affiliate program and stopped taking guests on my podcast. I kept a small team: five in 2024, three today.
Why this matters. Every extra offer, tool or process you keep is a claim on your attention. Attention is the scarce resource, more than time. A business with one strong offer beats a business with five average ones running side by side. The founder can go deep on one instead of shallow on five.
Common mistake. Keeping a low-margin offer for sentimental reasons, usually because it was the first thing that worked. It ends up eating far more delivery time than it earns. See Product Client Matrix for the process of deciding what stays and what gets cut.
2. Business Model
Principle. The right business model gives you good margin and a healthy income. It does that without grinding you down.
Decision. Push toward three things at once: higher price points, recurring revenue, and where it fits, performance-based deals.
Higher price points win on volume as well as margin. Low-ticket looks like the easy way in. It needs far more buyers to hit the same revenue, against far more competition. I once switched a website audit from free to paid. Fewer people asked for it. The close rate went up to around 80 percent, because the people who did ask were already sold. Price did the qualifying that a sales page could not.
Recurring revenue changes what the whole year looks like. A membership or subscription lets you predict next month instead of starting from zero every cycle. It multiplies lifetime value per client without multiplying your acquisition cost. The whole logic fits in one sentence a mentor once gave me over a meal. Give people a reason to stay for the next month, and worry about nothing else.
Performance-based deals, revenue share in particular, let you take part in someone else's business. You bring the expertise instead of the capital. You are not on the hook for their team or their overheads. You get paid when their business does. Structure the split so it only applies to growth above an agreed baseline. Keep your own cut modest enough that staying in the deal feels easy for the other side.
Why this matters. These three levers compound. A high-ticket, recurring, partly performance-based book of business is a different business from a low-ticket one-off book. That holds even if the total revenue looks similar on a spreadsheet this quarter.
Common mistake. Chasing volume on a low-ticket offer because more yeses feel safer. Nobody worked out how many buyers it takes to hit the target.
3. A Great Offer
Principle. You need something a client is glad to pay for. Position it so the value is obvious before they ask.
Decision. A great offer is compelling. It is clearly better value than what the client pays elsewhere. It is easy to understand and clear about the next step. It needs proof behind it, and adjectives will not do. Once the offer is right, pay a real copywriter to put it across properly. A good offer badly explained still underperforms.
Why this matters. A buyer says yes to what changes for them. The mechanism that delivers it comes second. Name what they will be able to do, or stop having to do, once they say yes. One sentence. If you cannot, the offer is not ready to sell, however good the delivery behind it.
Common mistake. Leading with what is inside the offer: the calls, the modules, the community. The buyer wants to hear what changes for them once they have it.
4. Traffic Channel
Pick one channel you can sustain. A podcast, video or social. Go deep on it instead of spreading thin across four. Depth in one channel is what builds an audience.
5. Innovation
Staying sharp lowers risk. Watch your own data. Stay close to what your clients and your industry are doing. Do not be the last person in the room to notice something has stopped working.
6. Whitespace
Constant grinding runs down a business and the person running it. Build gaps into the day, three or four hours between blocks, and take real days off. Put whitespace inside the work itself. A reward handed out after the work is too late.
For eleven years I worked about six days a week in the motor industry, which cost me 25 to 35 extra days a year. Now I take Thursday through Monday off.
7. Fun
This goes beyond whitespace. Doing something you enjoy, on purpose, resets your thinking in a way grinding never does. The best ideas tend to show up away from the desk.
8. Team
You will not build a business at any real scale alone. The exceptions: you wrote a hit song, or you built something one person can fully carry. Start with a small team of assistants. Hand off the highest-time, lowest-judgment work first. Document before you hire. A common mistake here: handing a specialized task to a generalist because they are already on the team. Then being surprised when it eats three days a week and derails everything else they were meant to do.
In 2009 my whole business plan was two words in capital letters: BUY TIME. I had a podcast, a workshop, two service agencies and a portfolio of domains built out as websites, and not enough hours to run them. So I hired 67 people. As a general manager I had sold my time to my boss. This time I bought other people's time to build my own business.
9. Invest
Once the business makes real income, put some of it to work. Leaving it all in the business is the other option. Money invested well over five to seven years becomes the thing that makes work optional. And work is almost always more enjoyable once it stops being the only option you have.
Where the Real Decision Sits
Steps four through nine are mostly execution. Reasonable people can get them a bit wrong and still recover. Steps one through three set the ceiling. Get the offer, the model and the focus wrong, and the other six steps just run the wrong plan more efficiently.
Those three are also the hardest to see clearly from inside your own business. Pricing, offer and focus are exactly the decisions a founder is too close to. That is a large part of what a Mentor relationship does. Pressure-test those three before the other six absorb the cost of getting them wrong.