How do you choose the business model that’s going to work the best for your company? The first step to take before choosing one is educating yourself about the various types of business models.
We understand it may seem like a lot to search for every single business model. And that’s why we’ve created a brief list of some traditional business models that will help you narrow down the one that’s going to work the best for you as a new business owner.
1. Franchise Model
This type of business model is the best model if you’ve got expansion on your mind. As a franchise, you’ve got rights to the name and brand of the company.
As your company grows, you can begin to expand your business model into varying market sectors worldwide.
2. Cash Conversion Cycle Model
This model can work if you’re looking to take cash, turn it into a product, and back to cash as quickly as possible. Many pieces work within this model to ensure that you’re able to converse money and products in a way that won’t hurt the business.
3. Reverse Razor and Blade Model
The purpose of this model is to offer your products and services at a lower price. You do this hoping that when customers see the lower-priced items, it entices them also to purchase items that are priced on the higher end of the spectrum.
The premium product is typically marketed with a deal or offer, while most company revenue will be made selling the lower-priced items.
4. Affiliate Marketing Model
When you think of affiliate marketing, it’s similar to why influencers are doing today. They are getting paid to market and review products and services provided to them by a company.
The purpose of the affiliation is to increase and drive sales for the company that they are reviewing.
5. Free Data Model
This model operates in a way that differs drastically from the other models featured thus far on our list. The way it works is it offers the consumer a free service.
Once the consumer begins using this free service, the company will collect user data, and that’s where they make the bulk of their profit.
6. Online Education Model
Tons of people are using online schooling to further their education, making no this business model especially lucrative. The company will offer classes and other educational materials to students.
But, to access these things, they must first pay a monarchy fee or a one-time lump sum.
Business Models: Which One is Right For You?
With so many business models to choose from, the options at your fingertips when creating your business plan or taking part in strategic planning are endless. If you’re looking to expand the franchise model is the way to go, but if you’re looking to sell educational materials, the online education model is a better option.
If you’re looking for support as you go through getting your business off the ground, including recruiting and hiring staff, contact Sterling Tax & Accounting. They can do much more for your business than just your taxes.
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