The Top Business Models For Your New Start-Up Business

The Top Business Models For Your New Start-Up Business


“Best start-ups generally come from somebody needing to scratch an itch.” Michael Arrington, TechCrunch Founder and Co-editor

Related: This Business Model will Boost Your Profitability

Whenever meeting new or existing entrepreneurs, you are bound to hear the term ‘Business Model’ somewhere in the conversation. But just what is a business model? Which ones work best and why?How do you know if your start-up business has the right one?

Defining your business model is how you:

  • Identify your market;
  • Define and differentiate your solutions;
  • Get and keep customers, creating value for them;
  • How you get to market through promotion and distribution;
  • How you define what’s to be done;
  • The way you will set up your resources;
  • How you’re going to do all this at a profit.

“Stop trying to find the formula that will instantly make your idea into a winner. Instead of being scientists the best marketers are artists. They realise that whatever is being sold is being purchased because it creates and emotional want, not because it fills a simple need.“ Seth Godin

Following are some of the Top Business Models you can consider:

1. Home-based Business Models

  • Less risk and lower start-up costs – allows you to test the entrepreneurial waters without having to spend money on assets, employees and other initial expenses.
  • Easily scalable – you can make your home-based business as big or small as you’d like to suit existing commitments, such as parenthood and a day job.
  • Outsourcing – a great strategy to keep things simple at home. You can contract with other companies to do your public relations, warehousing, shipping, website management, even manufacturing.

2. Brick-and-mortar Business Models

  • Gives you an opportunity to work face-to-face with people.
  • A physical location may attract walk-in traffic to supplement traffic you gain through your marketing efforts, depending on your type of business.
  • Gives you a dedicated space to go to work each day and become mentally and physically immersed in running your business.
  • Higher risk and start-up costs.
  • If your concept is retail-oriented, you must acquire inventory to merchandise your store.

3. e-Commerce Business Models

  • As with a home-based business, this is a lower risk, lower cost business to start. You don’t necessarily need lots of personnel, inventory and facilities.
  • You can choose to do it full-time or part-time.
  • Easily scalable – you can make your e-commerce business as big or small as you’d like to suit existing commitments, such as parenthood and a day job.
  • You can tap into a national, or even global, customer base through the internet.

Related: (Video) The Value of Validating Your Business Model

4. Other Business Models

  1. Lead Generation business models are those where a company uses the web, or some other mechanism, to generate a large number of leads, and sells them on at a higher price.
  2. Direct Sales business models uses sales personnel and is one of the most expensive ways to pursue customer acquisition. Research shows that for every five sales people hired, typically between one and two of them fail, and never get close to reaching quota. Unfortunately because of the long orientation and training of sales personnel, it typically takes six to nine months to detect which individuals will fail, and to terminate them.
  3. Recurring Revenue or Annuity Income business model can be highly predictable over time as you have a better idea of the revenue you will receive and thus reduces the stress of having no revenue. Think of consultants that charges a monthly retainer to a client, or a gym charging a monthly membership fee.

“The goal of business then should not be to simply sell to anyone who wants what you have, but rather to find people who believe what you believe.“ Simon Sinek

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Dr. Thommie Burger
Founder of JTB Consulting, a leading Business Plan Consultancy that provides practical, unique and affordable Business Consulting and Business Plan Solutions to entrepreneurs, start-up businesses and existing companies. Founder of Animazing, a Marketing Agency that designs unique animated videos; a communication and marketing medium clients use to deliver their messages in an effective, engaging and memorable way. Thommie is a Summa Cum Laude MBA Graduate and holds a PhD in Entrepreneurship and Business Management.

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