Anything You Want

A business model with only two numbers

Like most people, I had no idea what to charge for my service.

So  I  went  to  the  local  record  store  in  Woodstock,  where  they  had  some  local

musicians' CDs on the counter.

I asked the woman at the store, “How does it work if I sel my CD here?”

She said, “You set the sel ing price at whatever you want. We keep a flat $4 cut.

And we pay you every week.”

So I went home and wrote, on my new cdbaby.com website, “You set the sel ing

price at whatever you want. We keep a flat $4 cut. And we pay you every week.”

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I figured if it worked for her, it was fine for me.

Because it was taking me about forty-five minutes of work to add a new album

to  the  site,  I  also  had  to  charge  $25  per  album  as  compensation  for  my  time.

(Shows you how much I thought my time was worth in those days.) A few days

later, I realized that $35 feels about the same as $25, so I bumped it up to $35 per

album, which left me room to give discounts and stil make a profit.

And that's it! Six years and $10 mil ion later, those same two numbers were the

sole source of income for the company: a $35 setup fee per album and a $4 cut

per CD sold.

A business plan should never take more than a few hours of work. Hopeful y no

more  than  a  few  minutes.  The  best  plans  start  simple.  A  quick  glance  and

common sense should tel you if the numbers wil work. The rest are details.