“What business model does your company employ?” Have you been given that line yet? There are several different types of business models, and you’ll be asked how your business operates a lot in networking. Wouldn’t it be great to be able to give an intelligent answer? Instead of saying, “People shop at my store,” you can say, “I use the Brick-and-Mortar model.”
The first thing to know is that the term “business model” means your plan to make money. More specifically, however, it weighs the product or service you are selling against your expenditures by how it is done. As simple as this may sound, you can do this in several different ways. Let’s look at just a few of the more common ideas.
Brick-and-Mortar
Most people still like to go out and shop to some degree. So, to take advantage of this model, you need a place where customers can come to purchase your goods or services. While you need to adjust your budget for the overhead, the location can often amp up sales if it’s in the right place.
Franchise
When your brand is big enough to make money just by licensing your resources, you can start a franchise business model. You’ve worked hard enough to make a name for yourself, and now you can sit back and let that name work for you.
Pay-As-You-Go
This is a model to use when trying to interest your audience in using your service or partaking in your product only as needed. People in this audience hate contracts. The idea is that you will build your client base by volume more than by relationship.
Peer-to-Peer
This model unites people who need the people around them who can meet that need. Profit for these businesses usually comes from commission fees on one or both sides. An online pioneer in this model would be eBay.
Other popular models include Brokerage, Bundling, Crowdsourcing, Digital Platforms, Product-to-Service, Razor, Subscription Club, and User Communities.
Chances are, you’ve already been working with one of these business models, whether you knew it or not. If you think the time has come to switch things around a bit and adopt a new business model, let us know! We’d be happy to discuss what model would work best for you.