Considering what types of business you want, but not sure where to start? One of the considerations you will need to make is which business model suits what you want to do and how you want it.
There are a few different business models to consider, and all of them offer something different to business owners and customers.
What is a business model?
A business model, in the simplest form, is how you will make money from your business. It covers what you sell and how it brings value to your audience – as well as pricing and costs.
There are a few things that you will see in every business model:
What it takes to make it: raw materials, design, production, labour, and more
What it takes to sell the item: distribution, delivering the goods or service, cost of sale, marketing
What the customer pays: price point, payment processing time, pricing strategy, and more
The business model looks at how the process will work and make those pieces fit together to profit.
It is difficult to know if your business model will be a success without testing it. You don’t need to create a new strategy to be a success, though. Many tried and tested business models from already successful businesses, franchises, and successful freelancers can see us.
While there are infinite options that you can explore, a few business models seem to come out top time and again.
Servitization
This is one of the most brilliant business models around at the moment and has far surpassed expectations. One-off costs aren’t for everyone – people want flexibility and ease of budgeting.
Offering services or goods for a set price per month has worked for some of the titans in the industry – think Netflix, GlossyBox, and Dollar Shave Club.
Continued custom and regular pricing – what’s not to like?
Authentic Business
Everything you do is transparent, and the reasons you do it are transparent. You are a social machine that people can connect with quickly and build a bond with easily. No longer are employees asked to stay silent on social media; in fact, sharing is more important.
The brand will appear lively, interactive and not only welcomes feedback but makes noticeable changes too.
Innovate, Iterate, Innovate
Make it, break it, improve it, break it, innovate it – this business model can be one of the most enjoyable. They innovate their way to success, offering new, improved, better, smarter, and so on. One of the most notable companies that cannibalized their product to innovate is Apple.
They took the iPod, made it unique, then made it irrelevant by introducing a phone that could do the same.
Although it should be noted that some of the most successful businesses use a range of these, combine them, and create something that meets their needs. Your business model might become apparent when you note down your business’s vision, ethos, and objectives.
A growing business might see many different variations before you finally unlock the full potential of your business model – but it is always worth working on until you get it right.
Keen to get started on your business journey? Check this out for some inspiration: 5 Business Ideas You Could Start Today.
