Business Modelling Made Simple
So you’re starting a business, but what kind of business? What will you do, who will you do it for and how will you do it? Put simply, what business model will you choose? Or maybe you’ve already started your business and are thinking of making some changes and/ or adding in extra revenue streams. These are the options:
- FREE – your business offers a free product or service and makes money via advertising. Closely linked to FREEMIUM – you offer a free option, but also an option to upgrade (or more than one) that is paid for
- BAIT & HOOK – you are selling a product that then ties your customers to buy consumables of that product/ brand for the future e.g. printers & ink cartridges
- UNBUNDLED – simple business to consumer selling e.g. department stores, technology brands, travel brands, …
- LONGTAIL – you sell a large range of niche products or services infrequently and to a few key clients
- MULTI-SIDED PLATFORM – you bring two groups of customers together and both must be active for your business to work – e.g. eBay, Tinder, Etsy, Folksy
- OPEN – you use ideas from other companies or allow other companies to use your ideas – for example pharmaceutical companies, film licensing, music licensing
- SUBSCRIPTION – your customers sign up to a monthly delivery of your product or service – e.g. Netflix, magazine subscriptions, business software such as Microsoft Outlook, design programmes and many more.
The most important part of choosing a business model is whether there is a market for your business. Before you start, or make any changes to your business it’s important to research how your potential customers want to consumer your product or service and how much they would be willing to pay.