Which business model fits your company?

Many dream of creating a new business model that will revolutionize the world, like crowdfunding or franchising before. What is a business model, what are the most popular and how to choose the right one in a specific case? Let's check.

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Theoretically, everything has already been invented in the field of marketing. In practice, more and more new business modelsthat revolutionize not only the operation of individual companies, but also entire industries and the way the average customer thinks and purchases. Below are some examples of business models that may prove useful in your business.

Business model - definition

What exactly is a business model? The dictionary definition says that this is a plan that allows the company to operate successfully. It should consider customers, sources of income, financing and product. Author of the book "Why business model matters?" Joan Magretta notes that this is, in short, a story about how the company works. Others say it a hypothesis that might work (or not) for a given company, but that is not a definitive definition either.

A business model can be the starting point for a business plan or starting a business. It can also be used at other stages of running a business. This issue has gained particular popularity in the world of Internet businesses. Previously, traditional shops or factories were dominant - in their case it is easy to judge at a glance whether the company is earning for itself or not. On the internet, the differences between a profitable and a loss-making business can be subtle and not always captured right away. Often, the appropriate business model is responsible for the success of a given venture.

Examples of business models

Michael Lewis, an American writer who has been revealing the greatest secrets of the American financial market for years, provided a short but very accurate definition of the business model. Any idea of making money, he decided. In fact, that is what it is all about, but running a business is based on certain assumptions.

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Below you will find a list of currently popular business models. Perhaps there is one among them that suits your business?

franchise - is based on granting a license to run a company under the same banner.
Crowdfunding - consists in financing obtained from the community.
Integrator - the company controls all aspects of the supply chain, advertising and marketing, which speeds up operations and minimizes costs.
Freemium - the service is free, but you can buy a better, paid version, as in the case of Youtube or Spotify.
Discount - the company sells the same products as the competition, but cheaper thanks to savings at every stage of production and sales.
Razor and Blade - the basic product is cheap, but you have to buy expensive accessories, which constitute the main income of the company.
Experiences - the basic and even additional needs of customers in developed countries are already satisfied. Hence, this model is based on selling experiences, not just a specific product (e.g. for a restaurant it will be a pleasant interior, status, belonging to a group and a cordial atmosphere, not just a dinner).
Pay what You want - the customer pays for the item as much as he is able to. This strategy is popular on the web, where, for example, anyone can pay for an online lesson or listening to a song as much as they think is fair.
Subscriptions - this type of activity, based on a regularly renewed subscription, is particularly popular today in the world of online entertainment.
Social business model - it is based on the fact that it is users who issue a service that can be used, and the website only acts as an intermediary in its implementation.

From these, you can choose a model suitable for almost any activity. Each of them determines how the organization creates value, delivers it, and earns it.

Which business model will increase your company's results?

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The company's business model - how to choose the right one?

So which business model will be the best for a given company? Before making a decision, it is worth checking what are its:

goals
priorities,
values.

This will allow you to choose a plan and plan the most optimal sales support. It is quite common for an entrepreneur to adopt a fashionable business model that does not actually serve his purpose. An example is a model used by the largest corporations, which will not be applicable in a startup with small funds. In addition to the features of the model itself, it is also worth checking which companies use it. It is good if they are companies of a similar size or from the same sector.

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Is it possible to create a new business model?

One business model will not fit the needs of every organization. It is worth looking for the right solution, because it can speed up the process of making a profit and help you find your way in the maze of ideas and inspiration. Sometimes, however, the plan seems so bold that none of the known ways of doing business fit it. Definitions from popular models will not work in every case. Then you can create your own model. Many of the most famous companies today (Uber, Airbnb, Netflix) are based on a revolutionary, previously unknown business model. It is worth joining them, remembering that the most ambitious and innovative entrepreneurs can win the most.

Problems related to the use of business models

Most people, however, will choose a ready-made business model instead of creating their own from scratch. Here he can run into a few problems. First, today's reality, including marketing environmentchanges very quickly. As already mentioned, the largest technology giants use completely new models (freemium, subscriptions, etc.) that were not known even several decades ago.

It would be good to create marketing audit company and know its potential well before formulating revolutionary solutions. Then you have to check if branding the company, its goals and capabilities are in line with the given model. You also need to be aware of the tools that are already available. You don't have to "invent the wheel" and do everything from scratch. Maybe it is worth using, for example the Osterwalder modelwhich is used to model business using an intuitive template.

It is possible that your idea also goes beyond traditional solutions. Then it may turn out to be a limitation instead of an aid to success. The second problem is the focus on the model itself, rather than the activity. Often times, graduates of business courses are goaded into filling out business plans and applying templates for the most trivial of business ideas. Meanwhile, it would be better to start your business and face reality. Later, based on the first conclusions and failures, you can think about a way of doing business that would help you spread your wings.