Now that you have the idea for your business, let’s determine which business model best fits your company. But first, what’s a business model?
A business model is a company’s core strategy for profitably doing the business. Models generally include information like products or services the business plans to sell, target markets, and any anticipated expenses. The two important levers of a business model are pricing and costs.
So with that said, let’s take a look at 9 business models:
Enterprise, Subscription, E-commerce, Saas, Transactional, Advertising, Usage based, Marketplace, and Hardware.
Now an example for each of those models goes like like:
for the Enterprise model this means your selling services to Corporation like IBM does
An example for the Subscription model is Netflix which you subscribe to monthly
An example for the E-commerce model is Target.com where you can buy products
An example for the Saas model is Dropbox they provide cloud storage as a service
An example for the Transactional model is Venmo
An example for the Advertising model is Facebook
An example for the Usage based model is Uber
An example for the Marketplace model is Amazon
And An example for the Hardware model is Apple
So now that you have examples of businesses that correspond to these models, this should give you a starting point when trying to determine what type of business model you ultimately will use.
So typically your customers can be broken down into 5 major categories: businesses, consumers, resellers, institutional and government. You may be familiar with abbreviated customer models like B2C, or B2B. This is just a shorthand way of describing who your customer is. You can have B2B, B2G, R2C, and many other combinations.