STEP 2: Select Your Business Model
Welcome to the beginning of your exciting journey to getting your startup launched and funded! The following steps will walk you through a structured road map of how to get the market to validate your business idea, get real customers to fall in love with your brand, find investors, and attract investments from interested parties who may benefit significantly from your partnership.
Disclaimer: We won't sugarcoat that this will be a lot of work, even for teams of people and especially for anyone who may have a current job, is raising a family or both. Recognizing the value of your time and the importance of expert execution, we offer a lifeline to bring your dream to life without being overwhelmed. We provide a dedicated team of specialists to work by your side, transforming your vision into a thriving business while you focus on what matters most. With our comprehensive service, you don't have to navigate this journey alone. We offer a range of services, from fully launching your idea for you to crafting your sales pitches, creating investor-ready pitch decks, generating your business plans, or providing advice and guidance without any long-term contracts and only when you need it.
Click here to book your complimentary strategy session with a Launch Director who's as committed to your success as you are. Let's make your business aspirations a reality together.
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Also, if you’re impatient (like we are) feel free to skip to the end of each step for videos and resources to help you quickly absorb this information and put it into action!
Now that we got that out of the way, let's jump right into it!
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Now, it is time to select your business model. Let's explore some standard business models and get pointers on making an informed choice of your business model.
Popular Business Models:
Subscription Model: Companies like Netflix and Spotify thrive on this. Customers pay a recurring fee to access a service or product, often monthly or annually.
Freemium Model: Offer basic services for free and charge for premium features. Evernote and Dropbox are classic examples.
E-commerce: Platforms like Amazon and Shopify are based on this model, where products are sold online by a single brand or multiple vendors.
Affiliate Marketing: Promote someone else's product on your platform. When your audience purchases through your referral, you earn a commission. Bloggers often use this model.
Marketplace: Platforms like Airbnb or Uber act as middlemen facilitating transactions between two user groups, typically taking a cut from each transaction.
Franchise Model: Think of McDonald's. Here, one party (the franchisor) grants another party (the franchisee) the right to use its trademark or business processes to produce and market goods or services.
Direct Sales Model: Companies like Tupperware and Avon bypass traditional retail channels, selling products directly to consumers.
Pointers to Select the Right Business Model:
Understand Your Customer: Who are they? What are their pain points and preferences? A deep understanding of your target audience will point you toward the most suitable model.
Analyze Initial & Ongoing Costs: Some models require hefty initial investments (e.g., franchising), while others might have higher operational costs (e.g., e-commerce). Ensure the model aligns with your financial plan.
Scalability: Consider how easy it is to scale the business model. If rapid growth is a priority, models like subscription or marketplace might be more fitting.
Flexibility: The business world is dynamic. Opt for models that allow pivoting or diversifying if required, ensuring you can adapt to changing market conditions.
Value Proposition: Does your chosen model enhance your value proposition? For instance, if convenience is a key selling point, e-commerce or subscription models might be apt.
Competitive Landscape: Examine models adopted by competitors. This can offer insights, helping avoid saturated markets and identifying underserved niches.
Regulatory Environment: Ensure the model you choose aligns with regulatory norms and requirements, especially if operating in sectors like finance, health, or real estate.
If you are interested in looking at more business models, Harvard Business School online has an excellent article here:
https://online.hbs.edu/blog/post/types-of-business-models
When it comes down to choosing a business model, there's no one-size-fits-all answer. The suitable business model blends your product's strengths, market demands, and long-term vision. It's about following trends and carving a niche that allows your business to grow and thrive.
HELPFUL TOOLS TO COMPLETE STEP 2:
For a look at 55 different business models and the companies that are using them, check this page out here and grab the book here
For a good checklist on how to select the best business model, Forbes has one that can be found here
For good video explanations of how to select the right business model, two can be found here and here
For an MBA educated consultant to help you make data driven decisions and review each model implications with you before you select your model click here to set up a consultation session.
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