Choosing a business model for your project
What is a business model
You have a business idea that solves a consumer problem, you know how to implement the idea, to start a business. You have done your marketing research and you know that your product is definitely needed by your target audience. Now you need to decide which business model to choose for your project.
A business model describes the rationale of how an organization creates, delivers, and captures value, in economic, social, cultural or other contexts.
Simply put, it is how you are going to make money. The good news is that you don't have to reinvent the wheel, and you can use one of the existing business models that suits your project.
To understand which business model is right for you, you need to answer a few basic questions:
- what product do you want to sell?
- how will you sell it?
- what are the costs involved?
- what kind of profit will you make?
The most common types of business models are
- Subscription. The customer pays a monthly fixed fee to use the product. This model used to work with newspapers and magazines, with the advent of the Internet and mobile applications, it is becoming increasingly popular. Example: Netflix.
- Freemium. Owners of software, tools or apps provide free access to their services. But there are a number of features that can only be accessed with a premium subscription.
Example: business partner search website bepartner
- Production. A traditional model where a business makes some kind of finished product from raw materials.
- Marketplace or e-commerce site. This model allows buyers and sellers to transact online. There are several types of e-commerce. The most common are B2B, B2C. Example: OLX, Aliexpress
- Franchise. It is the right to run a business under a certain brand name and established technology.
- Direct selling. The sale of products or services not in a shop or retail outlet. The seller deals directly with the customer. Example: Avon
- Drop-shipping or direct delivery. This model involves a middleman selling goods from a manufacturer's or supplier's warehouse.
There are many business models, you need to weigh up carefully and decide which model or combination of models is suitable for your project. Don't know which business model to choose, write to us, let's do it together...