Case Studies Primer

How to read case studies on eBiz Facts

Everything we do here at eBiz Facts is geared towards helping you make smart decisions, so you don’t waste loads of time and money while building your online business.

Our case studies are no exception.

We take a scientific approach to examining every business we feature as a case study, rating and dissecting each one using the same criteria.

The end result – we hope – is that you gain a high-level understanding of each business via a quick glance at its breakdown chart.

Here’s an example of a breakdown chart for an ecommerce business:

There’s a ton of insight packed into that one chart, and we’ll show you exactly how to read it in a minute.

But first…

What is a case study?

We define a case study as a detailed description and analysis of a business.

As this is eBiz Facts, our case studies primarily profile online businesses.

With each case study we publish, we’re looking to answer some fundamental questions.

Such as:

  • How much money does the business earn? And how much of that is profit?
  • How exactly does it generate that income?
  • What skills are required to build and run the business?
  • How long did it take for the business to become profitable?
  • What industry does it operate in?
  • How many hours does the owner work each week?
  • Can the business be run from anywhere?
  • What’s the growth potential of the business?

Armed with the answers to such questions, you’re equipped to answer the ultimate question:

“Is this kind of business right for me?”

You shouldn’t have to invest weeks, months or even years (😱) of time and money to figure that out.

A quick glance at the business breakdown chart will tell you all you need to know.

The charts also allow you to measure one business against another, so it’s quick and easy to compare and contrast.

Take these two, for example:

Alright, that was the overview.

Now let’s dive into the details.

Business Breakdown 101

🌈 Color Coding

We color code our business breakdown charts so it’s easy to see at a glance how each business “scores” on a variety of factors.

Generally speaking:

Green = 😃
Orange = ☺️
Red = 😕

So the more green you see in a breakdown chart, the better.

But keep in mind that it’s all somewhat subjective.

For example, a business generating $2,999 in profit each month scores a red rating on our scale, even though many people would be delighted to own such a business.

But we had to draw the lines somewhere. We’ve included the rating scale for each factor below, so you can see exactly where we drew them.

🤑 Average Revenue

How much revenue the business generates on a monthly basis.

More = better.

Example: Physio Memes
Average Revenue 105
  • All figures in USD.
  • Amount displayed is always per owner/partner in the business. (Example: husband and wife team earn $10,000 revenue per month from the business. Therefore average monthly revenue = $5,000.) 106
Average Revenue Bar % Bar Color
Anything less than $1000/month 10% Red
$1000 - $1999/month 15% Red
$2000 - $2999/month 20% Red
$3000 - $3999/month 30% Orange
$4000 - $4999/month 40% Orange
$5000 - $5999/month 50% Orange
$6000 - $6999/month 60% Orange
$7000 - $7999/month 70% Green
$8000 - $8999/month 80% Green
$9000 - $9999/month 90% Green
Anything more than $10k/month 100% Green

🤑 Average Profit

How much net profit the business generates on a monthly basis (average monthly revenue – average monthly expenses).

More = better.

Example: Physio Memes
Average Profit 107
  • All figures in USD.
  • Amount displayed is always per owner/partner in the business. (Example: husband and wife team earn $6,000 profit per month from the business. Therefore average monthly revenue = $3,000.)
Average Profit Bar % Bar Color
Anything less than $1000/month 10% Red
$1000 - $1999/month 15% Red
$2000 - $2999/month 20% Red
$3000 - $3999/month 30% Orange
$4000 - $4999/month 40% Orange
$5000 - $5999/month 50% Orange
$6000 - $6999/month 60% Orange
$7000 - $7999/month 70% Green
$8000 - $8999/month 80% Green
$9000 - $9999/month 90% Green
Anything more than $10k/month 100% Green

(Yes, we use the exact same scale for Revenue and Profit.)

🚀 $0 → $1k/month

How long it took the business to start generating $1000 per month in net profit consistently.

Less time = better.

Example: Physio Memes
$0 → $1k/month 108
10 months
  • Time displayed is always per owner/partner in the business. (Example: husband and wife team took 5 months to start generating $1k/month consistently. We thereby infer that it would have taken 10 months for one person working alone.)
Time To $1k (use nearest value) Bar % Bar Color
2 years or more 10% Red
1.5 years 15% Red
1 year 20% Red
9 months 30% Orange
6 months 40% Orange
5 months 50% Orange
4 months 60% Orange
3 months 70% Green
2 months 80% Green
1 month 90% Green
Immediate (eg remote job) 100% Green

⏱️ Time In Business

Time elapsed since starting the business.

More time = better, as it shows the business has been sustainable.

Example: Physio Memes
Time In Business 109
30 months
  • We don’t divide or multiply here, even if there are multiple owners/partners.
Time In Business (use nearest value) Bar % Bar Color
3 months or less 10% Red
6 months 15% Red
9 months 20% Red
1 year 30% Orange
1.5 years 40% Orange
2 years 50% Orange
2.5 years 60% Orange
3 years 70% Green
5 years 80% Green
7 years 90% Green
9 years or more 100% Green

💰 Starting Capital

Approximately how much money was spent to get the business started.

Less = better.

Starting capital includes money spent on software, hardware, training, etc. Does not include money spent on items before deciding to start the business (e.g. old laptop).

  • All figures in USD.
  • If there are multiple owners/partners in the business, we divide accordingly.
Starting capital Bar % Bar Color
$10,000 or more 10% Red
$5000 - $9999 15% Red
$4000 - $4999 20% Red
$3000 - $3999 30% Orange
$2000 - $2999 40% Orange
$1000 - $1999 50% Orange
$500 - $999 60% Orange
$300 - $499 70% Green
$100 - $299 80% Green
$1 - $99 90% Green
$0 (no capital needed to start) 100% Green

🏋️ Workload

The average number of hours per week spent building and running the business.

Less = better.

Example: Physio Memes
Workload 111
30 hours/week
  • Calculated as hours per week per owner/partner in the business.
  • Doesn’t include paid help, as outsourced labor is accounted for in expenses (average income – average profit).
Workload (use nearest value) Bar % Bar Color
70 hours per week or more 10% Red
60 hours per week 15% Red
50 hours per week 20% Red
40 hours per week 30% Orange
30 hours per week 40% Orange
25 hours per week 50% Orange
20 hours per week 60% Orange
15 hours per week 70% Green
10 hours per week 80% Green
5 hours per week 90% Green
1 hour per week 100% Green

💻 eBiz Purity

A measure of how travel-friendly the business is, on a scale of 1-5.

Higher score = better.

The “purest” businesses – those that score 5/5 – can be built and run from anywhere with a laptop and wifi.

eBiz Purity Score (out of 5) Bar % Bar Color
0 10% Red
1 20% Red
2 40% Orange
3 60% Orange
4 80% Green
5 100% Green

🔥 CENTS Score

A measure of the growth potential of the business, based on five factors:

  • Control
  • Entry
  • Need
  • Time
  • Scalability

Three possible values for each:

1 = 😃
0.5 = ☺️
0 = 😕

Higher score = better.

This framework comes from a book called The Millionaire Fastlane.

A brief overview…

🎮 Control

Refers to how much control you have over the business.

Low-control businesses are typically dependent on a 3rd party for all leads or sales.

An example would be a freelance web designer who relies entirely on Fiverr to find clients. Or an ecommerce business that sells exclusively on Amazon.

A change in the Fiverr terms of service could leave that web designer reeling, while a small adjustment to the Amazon search algorithm could decimate the ecommerce business.

In contrast, high-control businesses are robust. They have no single point of failure.

An example would be a freelance web designer who acquires clients via a healthy balance of Upwork, Fiverr, SEO, in-person networking, and referrals.

A high-control ecommerce business would be one that sells on multiple platforms (ie not just Amazon) and is not reliant on a single manufacturer or supplier.

🚪 Entry

Refers to barriers to entry.

As per The Millionaire Fastlane:

…as entry barriers to any business road fall, or lessen, the effectiveness of that road declines while competition in that field subsequently strengthens. Higher entry barriers equate to stronger, more powerful roads with less competition and need for exceptionality.

If an average Joe can set up a website today and be stealing your customers or clients tomorrow, your business has a very low barrier to entry.

In contrast, if Joe has to spend six months and $20,000 just to get a foot in the door of your industry and start competing, your entry barrier is relatively strong and your business is more secure.

An extreme example of a low-entry business would be a freelancer who which relies on survey websites to earn money. Because the work requires no advanced skill and anyone and their grandma can sign up easily, that freelancer is essentially a faceless worker bee.

(And gets paid accordingly.)

An extreme example of a high-entry business would be Stripe, a company which had to jump through many regulatory hoops, raise millions of dollars in funding, and solve some extremely complex problems before becoming the tech powerhouse it is today.

Nobody is competing with Stripe overnight. There’s a big moat around that castle.

🙏 Need

Refers to whether or not your business really needs to exist.

  • What specific need do you solve for your customers/clients/audience?
  • Would they be desperately seeking an alternative if your business disappeared overnight?

Businesses with strong staying power and high growth potential solve painful problems and add massive value. Customers and clients keep coming because they want what those businesses are offering.

Remember fidget spinners?

A fidget spinner business would score zero for need.

Nobody needed a fidget spinner. They were a novelty item, as this graph show clearly shows…

Google Trends: Fidget Spinners

At the other end of the spectrum, Google solved a massive need with their search engine.

They weren’t the first to organize online information and make it easily accessible, but they did it best. Which is why Google Search is still thriving today.

🕓 Time

Refers to passive income. 113

It’s a measure of how passively the business operates and can generate revenue. The less time the owner(s) has to spend on the business each week, the better.

Most freelance businesses score low here. If you charge an hourly rate as a freelancer, then your business can only earn money while you’re on the clock.

Businesses that score high lend themselves to automation and/or outsourcing. Contractors, employees or computers handle the day-to-day work.

This detaches the owner’s time from their income. The business can be earning them good money even while they sleep.

📈 Scalability

Refers to the scalability of the business.

Ask yourself:

“Can the net income of my business scale limitlessly, say, from $2,000 per month to $200,000?”

If you have a remote job, the answer is no (ie low score).

But if you run an online store, the answer is more likely to be yes (ie high score).

Here’s our CENTS Score for Physio Memes:

Broken down:

  • Control – 1
  • Entry – 0.5
  • Need – 0.5
  • Time – 0.5
  • Scale – 0.5

(We explain our rationale for the scores within each case study.)

CENTS Score (out of 5) Bar % Bar Color
0 10% Red
0.5 15% Red
1 20% Red
1.5 30% Orange
2 40% Orange
2.5 50% Orange
3 60% Orange
3.5 70% Green
4 80% Green
4.5 90% Green
5 100% Green

🏖️ Passivity

A measure of how passively the business operates and can generate profit.

The less time the owner(s) has to spend running/building the business each week, the better.

Example: Physio Memes
Passivity Score (out of 5) Bar % Bar Color
0 10% Red
1 20% Red
2 40% Orange
3 60% Orange
4 80% Green
5 100% Green

🗺️ Business Model

The business model is a high-level description of how a business works, so you can quickly get a sense of it.

To date, we have identified 8 distinct online business models:

  1. Remote Job
  2. Freelance
  3. Agency
  4. Ecommerce
  5. Authority
  6. Marketplace
  7. Cloud Service
  8. User-Generated Content (UGC)

You can read more about each of those and what distinguishes them here.

  • Businesses can use multiple models at the same time, and even evolve from one to another.

🤝 Lead Generation

A list of the primary ways the business gets attention.

This tells you how the business catches the eye of their ideal fan, client, or customer.

🤑 Monetization

A list of methods used to generate revenue for the business, so you can see exactly how it makes money.

As explained on our Monetization Methods page:

There’s the work that you do, and there’s how you get paid for that work.

Your skills do the work, and your monetization method(s) get you paid.

There are often multiple ways to monetize a specific skill. And you don’t necessarily need to learn or develop specific skills yourself – you can hire others who already have them.

  • You can see a full list of monetization methods for online businesses here.

🎯 Niche

The niche the business operates in.

  • A business can operate in several niches at the same time, or not have a specific niche.

📣 Platform

A list of platforms the business is largely dependent upon to function.

For example, if a freelance graphic designer does a significant amount of her client acquisition and communication via Upwork, we’ll note that in the case study.

Many platforms are a double-edged sword.

On the one hand, they can quickly boost the visibility and profitability of a business.

On the other, it’s easy for a business to become overly dependent on a platform. (And thus end up with a low Control score.)

Examples of platforms
  • Amazon
  • Envato
  • Fiverr
  • Upwork
  • YouTube

🎨 Skills

Key skills used within the business, to give you a sense of what it would take to build and run something similar.

Skills can be utilized in-house or outsourced.

See our list of online business skills here.

Physio Memes example

🛠️ Tools and Resources

Key tools and resources that have proved especially helpful for building or running the business.

You’ll usually see software and hardware listed for tools, whereas resources usually include books, blogs, podcasts and courses listed in this section.

Physio Memes example

Primary tools

  • Shopify – hosting and managing the ecommerce store
  • Canva – graphic design, email template designs, creating social media content
  • Camtasia – creating/editing videos for memes/content
  • Loom – screen recording, much easier than Camtasia and it’s free
  • MailChimp – mailing list, free to start
  • Upwork and Fiverr – for finding/hiring freelance designers
  • Trello – task board for project management
  • Slack – communication channel for the team
  • ClickFunnels – course creation and training modules for team
  • Placeit – mockup generator

Helpful resources:

Questions? Comments?

We’re always looking to refine and improve our case studies so we can better help our readers understand and build successful online businesses.

If you have a question or suggestion, we’d love to hear from you in the comments below.

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