Start as an entrepreneur #5 - Business models
A business model is any way that you make money based on the product or the service that you are selling. They are many business models out there and business model are emerging every day. We are going to review some popular and some less popular to have a deep understanding of the concept
We all have heard at least one time the term “Retail store” and maybe some of us say it without really understand what the term retail is about. A retail business is any physical store that physically sells a product, it’s maybe the oldest business model out there and many big names like Walmart or target and other small stores like your local groceries store use it.
With the internet retail businesses especially clothing businesses went hybrid and in addition of the physical store they also have an online store with the same items online than those in the physical store. Some consider stores like amazon to be a retail store, but they don’t really own the stuff that they sell so I see them more of an advertising platform that a retail platform.
Mc Donald’s, subway or Taco Bell, those are examples of franchise. A franchise is a business owned by an entrepreneur offering a product or a service labeled by a corporation that provides assistance in every aspect of the business. In simple words that means that when you enter a Mc Donald’s and order a Big mac and fries, the person making that burger is not actually employ by Mc Donald, he is employ by the owner of that franchise who in exchange of using Mc Donald’s name and recipe pays a certain amount to Mc Donald’s.
In fact, Mc Donald’s only employ very few people they make money by selling thing like recipe and branding assets to the individual franchise
Ø On demand
It’s a relatively new business model introduce by internet, it usually works with an app where you can order a service right now. Companies like Uber or Lyft use that model, with those two examples you order a car that you want right the second to drive you somewhere. The keyword here is now the service is delivered right after the order
Ø Sharing economy
In sharing economy what’s happening is that company look for individuals that have underutilize assets that they can share with peoples outside of their friends and family. A classic example of that is Airbnb where everybody can go on their platform and put his apartment or house for rent everywhere in the world. The company take a small part of the rent money, the owner profit for the rent money and the renter has a cheap location for his holiday or whatever he wanted the house for.
It’s a well-known model used for a longtime now. It was first used by newspapers and the principle is that you pay an amount of money periodically it can be monthly or annually for a certain service. Most online services use it today
Everybody knows freemiums and everybody hates them but the work
so…… yeah freemium
they are a variety of business models choose which suits your business better and remember you can always change them if you fell that they don’t fit your business.