Do you aspire to open your own business? If so, then you should note that every decision you make as an entrepreneur is important. Time and again, you’ll have to decide upon many things. But, one of the most crucial is about your business model.
A business model is essentially a structure designed to pinpoint an organization’s products, services, ways of operating, sources of revenue, and plans of action. Given what it provides, the model you choose is so powerful that it will affect most aspects of your business.
Not sure about what you want? Here are a few examples you can choose from.
The manufacturer model means joining the industrial sector. You’ll be establishing a business whose main goal is to take raw materials and make your choice of products from them. Using this business model also entails having a large selection of industries. There’s the typical machinery, but you can also operate in clothing and textile, electronics, or food sectors.
An example of business that utilizes this model is one that manufactures bevel gears in Wisconsin. Usually, these companies create items in small batches. If you’re not looking to customize and wish to cater to more, your business can also go into mass-producing items like interchangeable parts for any business to use.
With the use of the internet and better shipping methods, you can also reach companies and organizations that aren’t from your area.
Brick-and-mortar is used to refer to businesses that only operate from physical shops. Due to the influence of the Internet, this model has slowly been overpowered by e-commerce.
As a means to adapt, many brick-and-mortar shops have implemented online services to their business, thus creating the click-and-mortar model. In this model, an online presence is used to generate more sales to accompany the ones made by the physical store.
More clothing and beauty companies have started using this model. In terms of clothing stores, customers can purchase items online and return them through parcel or the physical shop. Having a physical store also means that clients can come in and check and try the items that they’ve seen online before deciding to purchase anything.
A marketplace is an aggregation of different sellers with similar products or services, all of which are vying for the customers’ attention. Thanks to the internet, businesses from separate locations can operate in one online marketplace. This allows for steeper competitions between those in similar categories.
When using this model, you can either go for a horizontal or vertical marketplace. The direction you choose will indicate how wide the array of options are, or how deep it can go. Vertical marketplaces usually focus on a niche market, and you can see this in modern carpooling applications as well as short-term rental bookings.
With that in mind, it’s likely that the model you choose now will evolve with the times, like how models have done so many times in the past. The key to surviving this ever-present change in business models is adaptability. The structure you choose shouldn’t limit you but instead, guide you throughout the process of running a business.