What is a business model and why do you need one? A business model is the skeleton of your company- it’s what holds everything together. It’s the blueprint that explains how your company makes money and how it plans to grow.
Without a business model, your company will flounder and die. In this article, we’ll be discussing the different types of business models and which one might be right for you.
The 8 general business models are: product, service, shared assets, subscription, lease/rental, insurance, reselling and agency.
Product
A product-based business is one that sells physical goods. This could be anything from clothes to furniture to food. If you’re thinking of starting a product-based business, you’ll need to think about things like manufacturing, packaging, shipping, and storage.
You’ll also need to have a good understanding of your target market and what they’re looking for. Dropshipping is a type of product-based business model where you sell products that you don’t actually have in stock.
Instead, when someone orders from you, you simply order the product from the supplier and have it shipped directly to the customer. Dropshipping is a great business model for people who are just starting out because it’s low risk and easy to set up. For more advice, check out this article from LegalVision.
Service
A service-based business is one that provides a service to its customers. This could be anything from lawn care to web design to pet sitting.
If you’re thinking of starting a service-based business, you’ll need to think about things like pricing, marketing, and how you’ll deliver your service. You’ll also need to make sure you have the right team in place to provide the service.
A shared assets business model is one where customers share access to an asset. This could be anything from a car sharing service to a co-working space. If you’re thinking of starting a shared assets business, you’ll need to think about things like pricing, marketing, and how you’ll manage the asset.
Subscription
A subscription-based business is one where customers pay a recurring fee to access your product or service. This could be anything from a monthly gym membership to a video streaming service.
If you’re thinking of starting a subscription-based business, you’ll need to think about things like pricing, marketing, and how you’ll keep people subscribed.
Lease/rental
A lease or rental-based business is one where customers pay to use your product or service for a certain period of time. This could be anything from renting a car to leasing an apartment.
If you’re thinking of starting a lease/rental-based business, you’ll need to think about things like pricing, marketing, and how you’ll manage the asset.
Insurance
An insurance-based business is one where customers pay to insure their property or themselves against loss. This could be anything from car insurance to life insurance. If you’re thinking of starting an insurance-based business, you’ll need to think about things like pricing, marketing, and how you’ll underwrite the risk.
Reselling
A reselling-based business is one where customers buy products from you and then sell them on at a higher price. This could be anything from buying clothes in bulk from a wholesaler and selling them on eBay to buying tickets to events and selling them on StubHub.
If you’re thinking of starting a reselling-based business, you’ll need to think about things like pricing, marketing, and how you’ll source your products.
Agency
An agency-based business is one where you act as a middleman between a client and another company. This could be anything from being a real estate agent to being a social media manager.
If you’re thinking of starting an agency-based business, you’ll need to think about things like pricing, marketing, and how you’ll find clients.
Implementation
Now that we’ve gone over the different types of business models, let’s talk about how to implement them. The first step is to choose the right business model for your business. To do this, you’ll need to think about things like your products or services, your target market, and your business goals.
Once you’ve determined which business model is right for you, you’ll need to put together a plan on how to implement it. This will involve things like creating a pricing strategy, developing a marketing plan, and setting up the necessary infrastructure.
Business model structures can be different for everyone. There is no one-size-fits-all solution when it comes to choosing the right business model. However, by understanding the different types of business models and how they can be implemented, you’ll be well on your way to choosing the right model for your business.
Now that you know the different types of business models and how to implement them, it’s time to put your knowledge into action. If you’re not sure which model is right for your business, take some time to consider your options and make a decision.
Remember, there is no wrong answer when it comes to choosing the right business model. The important thing is that you choose a model that will help you achieve your business goals.
Ella Marcotte
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