The foundation for any start-up is the model put into place. Why? Well regardless of how unique or cool an idea may seem, a business requires a viable method of generating money for the idea to be sustained and ultimately thrive. This is where the model comes into play.
Having a business model is important, but selecting the right model is even more vital. While deciding on the correct business model for your start-up can be tricky, assessing the options available can help with the decision. With that in mind, here are five business models which have a proven track record with delivering results for start-ups:
The Subscription Model
Whether it is beauty boxes or meal services, the subscription model has exploded in popularity over recent years. Of course, a subscription model isn’t only based on sending out physical goods on a set schedule. Subscriptions could be anything from online courses to online publications.
There are multiple benefits for both sides with regards to the subscription model. As for the consumer, they enjoy a regular product at an affordable set price. The business then receives a steady monthly income, can predict annual revenue numbers, and budget accordingly.
The Dropshipping Model
Dropshipping has several advantages when compared to other popular business models. In essence, dropshippers act as middlemen between the supplier and consumer. This means you don’t have to stock items or even purchase them beforehand. When a customer buys a product from you, the order is fulfilled by your third-party supplier of choice. Specialists like Oberlo make the dropshipping process even easier with expert advice and by highlighting reputable products to sell.
This is a great option for those who have little capital or don’t want to risk it all with their start-up. The most popular form of dropshipping is aliexpress dropshipping, whereby you source products on AliExpress marketplace and re-sell them on your website for a mark up (usually 2.5-3x).
The Customize Model
Nobody wants to be the same as everyone else. This is reflected by the growing trend of consumers searching for more personalized goods, the type which better reflect their particular tastes.
While the customization model is frequently associated with the fashion industry, it can cover virtually any sector. Video game controllers, action figures, furniture — anything can be personalized with different colors, features, graphics, and so on.
The Freemium Model
Over the past decade, the freemium model has become widely used among businesses. For the uninitiated, freemium brings together “free” and “premium” features. The “free” aspect is used to entice customers with a basic taste of a company’s offerings, while the “premium” part will supply the full package. If you strike the right balance, going with a freemium model can prove to be an excellent marketing tool for your start-up.
The Franchise Model
Although being a franchisee is a perfectly fine route to take with your business adventure, becoming a franchisor opens the door to even more potential rewards. This does require the ability to setup a business to begin with — after all, you’re passing on your system and wisdom to others — but it’s certainly something to keep in mind for start-ups with a long-term strategy.