What is a business model? A business model is generally a conceptual framework that supports the feasibility of a business which also includes the objective of the business and how to achieve it. Basically, deciding on your business model and building a working plan to go along with it are critical factors that will serve as representations of the business’ viability to be presented to the investors or interested parties.
As time passed by, there have been many developing different business models that sprouted in different industries to move the economy, trend, market, competition, and many more factors that brought about the continuous change and advancement of business models. Of course, ultimately, the sole reason and goal for the changes are to gain more profit or increase the returns. It only makes sense that successful business models are usually unique on their own and have their own niche in attracting the market. It’s really all a matter of choosing and combining, which type of business models to pursue that fits what kind of business one can envision.
As an example what business models are commonly used by entrepreneurs, here are a couple of business models examples.
• Manufacturer – makes finished products from raw materials then sells either directly to the public or through a middleman. E.g. Beverage Manufacturing
• Distributor – buys products from manufacturers and resells to the retailers or to the public. E.g. Car Dealerships
• Retailer – purchases products from a distributor or wholesaler then sell directly to the public E.g. Amazon, eBay
• Franchise – can act the same as a manufacturer, distributor, or a retailer, where the franchisee makes use of the brand of the mother company and earn through royalties. E.g. Fast food joints like Dunkin Donuts, Jollibee
• Subscription – keeps customers in a long-term contract and get recurring revenues through repeat subscription. E.g. SaaS businesses
• Freemium – the platform is online which offer basic services for free while charging only for premium extra add-ons. E.g. Freemium online businesses
These are just some of the long list of business models that existed for the demanding market. While some are just a combination of different business models, mostly, choosing a business model depends on what you want to create. You can download different business model example templates to use as a base to start your very own financial model here: Business Model Examples.
You can get more financial model templates at eFinancialModels, a platform providing a wide range of industry-specific templates for different use cases. So, if you plan to start a business of your own, invest in a specific project or ventures, gather funding, or just creating a financial plan for your business, ensure profitability and feasibility by building a working business plan.
