Business model is the best top-level view tool for your business because it allows you to have all core elements in front of your eyes. It describes how your business makes money and explains how you deliver value to your customers at an appropriate cost. Business model is important for both emerging and established companies because it shows where the business is headed and how it will get there. The goal of creating a business model is to outline a strategic vision that objectively assesses the possibilities and challenges of a specific business in a summary form.
Business model development is a crucial part of formulating a meaningful business strategy. The good news is that you don’t have to invent an entirely new business model to start a business. In fact, the vast majority of businesses use existing business models and refine them to find a competitive edge. In this article, we talk about different business model examples and explain how to make a business model for your company.
Types of business models
Business models come in a variety of forms and they fit different businesses. Some of the basic types of business models are:
Here are the most common business model options used by online services and e-businesses.
Free or nearly free for users:
Third party options:
Mixed business models:
Paid/ direct sales business models:
Business model sample
When choosing a business model for your company, there are lots of options to explore. If you find an interesting business model sample, you can use it for inspiration and copy the ideas that fit your needs. Let’s take a look at some innovative revenue models used by successful companies.
23andMe is a privately-owned personal genomics and biotechnology company that provides direct-to-consumer genetic testing service. The company makes money with personal genetic tests and provides reports on health conditions and lineage discovery. They are also planning to make their DNA research studies and surveys an additional way of making money, focusing mainly on B2B instead of B2C.
TransferWise is a peer-to-peer transfer service that allows consumers to transfer money globally and offers the multi-currency money wallet called “Borderless account”. The company makes money by using an innovative P2P transfer system and charges fees from senders or recipients 1.5% on the amount to be transferred, with minimal fee of 2 Euro.Uber is an example of shared economy. It’s an on-demand ride service which connects passengers with drivers of cars through app. Uber makes money by charging a 25% commission on all the rides made through its service. Since payments are done automatically through the app, Uber ensures to capture a part of the transaction.
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by: Eckhard Ortwein, CEO and Founder of Lean-Case
How to Make a Business Model
Here are 8 steps that you should follow for establishing the right business model for your startup.
Alternatively, you may one of the popular business model frameworks like Business Model Canvas or Lean Canvas, which will put you up to speed really quick.
Small Business Model
As you see, there are many different types of business models out there, and it’s important to choose one that is best suited to your business. Don’t try to reinvent a model or create something new because there are many proven options to generate revenue. When you are starting a new business, you should figure out which small business model works best for you. If you don’t know where to start, here is a short list of business models that are used by successful startups and business ventures across the globe:
Business model helps you increase chances for success of your business. It makes you focus on the most important parts of it instead of continually putting out fires. Creating a business model is a complex task, especially if you are doing it for the first time. Use Lean Case to make sure your estimations are correct, aligned and easy to present.
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