Successful Startup Business Models To Consider

Successful Startup Business Models To Consider

 

While the term Business model is widespread in the industry, real knowledge of the concepts behind this term is a determining factor to the success or failure of an enterprise. And why is this so? The business model you adopt decides the path of strategic action undertaken. It determines which customer pain points are focussed upon and how you can develop solutions that give you a competitive edge over others.

Attention Please!

 

Before we delve into the details of the various models, let’s take a quick look at the factors to consider before choosing a business model.

For a start-up to be successful, focus on the following points to select the best model.

  • Your End Target Market
  • Competitors And Rivals
  • Customer Base
  • Revenue Streams
  • Value The Customer Gains From Your Model

 

Successful Business Models To Follow

 

Listed below are the popular business models that have proven successful in recent years. Start-ups can benefit from adopting any one of these models based on their respective business targets and goals.

The Product/Service Model

Successful Startup Business Models To Consider

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This business model is best suited for companies that are creative in selling/ offering their own products/services. Most customers find it agreeable to buy products from the company that creates the maximum benefits. Adopting this model is an approach most manufacturers prefer as it presents a sustainable way of presenting products.

 

Why It Is Effective

 

The Product/Service Model is extremely flexible. There are not many restrictions involved in this model. Any product or service can be offered to customers through whatever marketing strategy the producer sees fit. Promotional offers and advertising campaigns can be framed as desired to enhance the sale of products and increase product awareness.

The flexibility also exists in the type of end-product/service being offered. This model also makes use of maximum recycling which leads to environmental conservation as well.

 

Benefits

 

  • Higher Sustainable Economy
  • Creative Innovations
  • Wider job opportunities
  • Direct alignment between the business needs and end customers
  • Creating a loyal customer base

 

Any Stumbling Blocks?

 

Is the business model devoid of any flaws? Well, according to some of the Best Corporate Solution Providers, one drawback is that this model consumes a lot of time and energy. Designing and creating products along with marketing is not trivial. It requires extensive planning and smart execution powers.

The efficiency of operations has a direct impact on all the conversions occurring in the business. Moreover, the duration to build a brand and achieve promising results requires a great deal of patience and effort.

 

Practical Examples

 

IBM, Philips, Drover

 

The Reseller Business Model

Successful Startup Business Models To Consider

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How does the Reseller Business Model work? Here the company adopting the model is not the producer of the goods. They act as a platform/resell partner where sellers and buyers can meet. The vendor supplies the products to the reselling partner who then makes it possible for customers to buy the required goods.

 

Why It Is Effective

 

The main success of Reseller business models is that the retail shops/vendors can create a branded name for themselves at a low cost with a wide audience. There will be a difference in the selling price and buying price and this is the main revenue source. The reseller succeeds in representing the vendors and promoting as well as presenting their offers to the target audience.

 

 

 

 

 

 

 

 

 

 

Benefits

 

  • Significant Revenue
  • Easy To Start
  • Lower Initial Investment
  • Zero Inventory Required

⮚      Lesser Financial Commitments

 

Any Stumbling Blocks?

 

Financial management is the most required skill and the biggest factor where a less experienced reseller may find it hard to find success. The costs involved in this model are

  • Cost For Customer Acquisition
  • Cost Of Sales In General
  • Cost Of Partnership Management

So, unless a balancing equation is worked out based on each business requirement, it will be harder to achieve a profit margin.

 

Practical Examples

 

Amazon, Flipkart, and other e-commerce platforms

 

The Subscription Model

Pic courtesy:- https://savvycomsoftware.com/

 

The Subscription model is probably the most well-known one among customers. There are not many people who haven’t taken a subscription to any one product/service. This is a model that is here to stay for a long time. A study by Gartner has revealed that by 2023, around 75% of the direct selling businesses will provide subscriptions to their consumers.

 

Why It Is Effective

 

A subscription model is effective mainly because it takes into deep consideration the pain points of the customers. By focussing on the consumer intent and providing attractive features, the customers tend to form long term relationships with companies adopting this model. Also, the subscriptions will spread the product awareness and give the customers an actual idea of what they’re getting.

Benefits

 

⮚      Predictable returns

⮚      Loyal customer relationships

⮚      Lower retention trends

⮚      Business expansion opportunities

⮚      Higher rates of forecasting

 

Any Stumbling Blocks?

 

The major stumbling block in this model is that the businesses adopting this model should be super creative to provide innovative subscriptions. They have to consistently make their customers feel valued and appreciated. The business owner should pay great attention to the

  • Business Size
  • Target Market
  • Industry
  • Prospective And Existing Customer Base

 

Practical Examples

 

Adobe, Salesforce, Netflix, Pret-a-manger

 

Winding Up

 

Each business model has its benefits and drawbacks. Researching on and choosing the suitable model is where your success as a business owner lies. Combined  With a sound pricing strategy and timely market entry, every business endeavour will be well-equipped to tap endless growth opportunities and achieve stunning success.