Having a business model is an essential aspect of starting any kind of enterprise. Not only is this the foundation for your business and its future, but it should also contain pertinent guidelines that help direct decision-makers pursue the right direction. When handling a sizable business with several partners, aspecific structure of operations would give everyone a tangible source of rules and principles to abide by and refer back to if issues arise.
What Constitutes Business Model Tools
When talking about business models, one must focus first on what’s in it: the business plan.
Creating one of these foundational business tools serves as a cornerstone of your business’s principles and mission. As its name implies, the plan outlines what you aspire to do when you created the company in the first place. Factors that need to be considered in one’s planning include the target market, the product or service to be offered, the area where the business could thrive, and the need that this business would address. The plan should also cover the basic financial strategy and the marketing strategy as well.Other factors could be included later on, depending on the kind of industry where the business would be run.
Having a plan in a professional form disseminates all relevant and required information in an easily readable format,and it would be helpful to have in the long run. This is what the business model template addresses.
Popular Business Model Templates
Designing a might be tough, especially for first-time entrepreneurs trying to grow a small business. It’s certainly not something you’d want to write from scratch without any direction. Good thing there are options available for any kind of entrepreneur these days. You can get a template online and choose from various formats that best suit your business’s needs. However, the template to be chosen should address your intended business model.
Here are a few popular examples of business models with easily searchable business model template samples online.
- Razor And Blade Business Model: This type of business model is simple enough to understand, and it’s popular because of its effectivity. It’s named as such because it was utilized by Gillette when they first produced the razor product and sold it at an affordable price, and they made their money by selling the supplementary blades at a higher price. Since the razor won’t function without the blades, the need to continually purchase the supplementary items is the actual business venture here. Tech companies have also utilized the same model, such as those selling computer printers and their proprietary ink system that goes with their products.
- Aggregator Business Model: This model is great for compiling multiple resources into one focal point. As its name implies, the main business acts like a hub that sources many suppliers under its roof, then uses its system to distribute or sell these suppliers’ products or services to the mass market. One good example is Amazon, wherein many book publishers come under its roof, initially as a global bookstore of sorts.Netflix is another type, but this time, it aggregates various sources of entertainment products like movies, TV shows, documentaries, and the like.
- Multilevel Marketing Business Model: This business model is useful specifically for people who intend to create a network of sellers and loyal customers at the beginning of their enterprise journey.Their main product could contain small yet specific items such as kitchenware, beauty implements, and other goods that are easy to move. The point is to have a ‘down line’ where sellers have their steady customer base who could purchase at a discount. These customers could also become sellers on their own and could sell through their network, and the selling level multiplies anew. Companies like Avon and Mary Kay are examples of such models.
- Subscription Business Model:Users or customers of this model pay for access to a good or service on a recurring period. This model type could be used in many industries and could have their respective tweaks on it. For example, it could be as big as running a health club or gym where the access is through a membership-only type of subscription. It could also be applicable to publications such as Reader’s Digest where the item could be delivered to the doorstep of a subscriber every month.
- Freemium Business Model: For those who want to avail of a service or good for free, they could be purchasing directly into a freemium type of model. They would later discover that, to access better services or avail of upgrades, they need to pay extra. This type of model is evident in many online apps currently in use, whether they are games like the popular Angry Birds, dating apps such as Tinder, or productivity tools such as Ever note.
Business Models Can Be An Asset
Learning the type of business model to follow is a great way to jump start things as an entrepreneur. Taking the time to lay out the plans for your business’s future by surveying useful business model canvas examples online would be the next good move. Once you have settled for a model and have chosen the template to lay it out, the strategy should pay off in the long run, as it’s entirely worth it to have a plan.