As a start-up, by now you should be familiar with conversations around business models and their relevance in your business. Perhaps you are wondering if there are custom business models from which you can adopt and customise to suit your unique business. Well, in this article I take a quick overview of some business models you can learn a thing or two from. For a start-up, a business model is important in so far as you need to have a viable way of making money enough for future investments and the sustenance of a business. Therefore, below are some business models from which you can adopt and customise to suit your needs.
Lowered Prices To Gain A Market Share Instead Of High Profits.
As the name suggests, this business model is for purposes of gaining a market share and increased brand recognition. This is important in markets where competition is stiff to a degree that when introducing a new product/service more efforts are needed in marketing and advertising. Why not let your unique and low-pricing model attract you the attention you need in your market place? It should be noted that this model is only as relevant in so far as you want to penetrate a market. As a result, profitability should not be the focus in as much as you need to make sure that you are operating as sustainably as possible.
With this business model what you want to do is sell your products/service at the lowest price than your competitors. This should be coupled with far-reaching efforts in providing cutting edge customer service and efficient delivery systems. To operate this model means your focus is in the long term whereas your company grows you will expand the product line, negotiate volume discounts with suppliers, invest in technology to speedup customer-response time and cut waste from the operations. Because lower prices attract a huge customer following, your business will benefit greatly by capitalising on small profits, quick return while pushing high volumes.
The Subscription-Based Business Model
Think of this model in the sense of how DSTv is structured or how mobile service providers function. To get the service you have to pay a price and to continue using the product/service you pay again. With a subscription-based business model, you rest guaranteed of recurring revenue and this presents an opportunity for a small business owner to reap accruing rewards. If you have been thinking of migrating your services to online platforms in the wake of Covid-19 then this is a model you want to consider.
A subscription-based business model allows for a balance of value to both the business and customers. Because users have to pay to get a service, expectations are more often than not high and this means constant development of the business in as far as meeting user needs is concerned. Putting these customer needs at the centre of your growth strategy means you always have ideas on how to further develop your online platform and business model.
Freemium Business Model
To a degree, this business model is closely linked to that base on subscriptions. The only difference is that in the fermium business model you offer a combination of free and premium to create value and attract increasing customer numbers. This business strategy is designed to give free access to selected content while the rest of the service is hedged with a premium price. A great take away from this model is that it allows for a start-up to fashion business in a way that it becomes a marketing tool on its own. This because you capitalise on offering the service for free and this in its own right is a marketing element. Arguably the best content is made available free to access so has to reach a wider audience. From this wider audience, hopes are that some will convert into paying for premium services.
Just like the subscription-based model, you need to be constantly improving the quality of content offered as well as the user experience. Otherwise, your customer base will become bored, after all, they can get some of your content free of charge.
Customizing Everything For The Client
This model is well suited for a business that stands to benefit from a loyal customer base. The fact that individualism is increasingly becoming popular within societies should be enough to have you stuck up in finding ways to allow your clientele base to communicate their individualism through your products/service. With this model, therefore, your efforts are in allowing customers to request customised services/products to match their individual needs and tastes.
Normally, this business model will make a whole load of sense for the fashion industry where a customer gets to choose the sizes, colours, styles and budget before making the purchase. Imagine the transformation and user-centricity this will bring to your business if you so choose to incorporate this model into your start-up
Middleman Business Model
Becoming a middleman can be the best way to enter a new trade allowing you to learn more about the industry and know where to position yourself before investing your capital. Perhaps you want to venture into manufacturing, start as a middleman and consider finding a potential competitor who is currently producing the product you want to focus on. In this case, you will be buying from the manufacturer and selling to the end consumer. What is unique about this model is that it allows you to learn a lot from the trade. As a middleman, you will be at the centre where you control the quality of the product being sold to the market. You also become the first port of call when it comes to customer feedback which you can then use to develop a better product/service once you enter the market place as an equal player.
As a middle man, you also have better control over contracts and negotiations with distributors while you are poised to build even stronger relationships with the suppliers and customers. Not to mention is the fact that you will gain far-reaching market knowledge for the product/service you want to bring to the market place.
These are some of the best business models you might want to consider as you establish your business.