Which Business Model is Right for Your Start-up?
A lot of people are moving toward starting their own company based on an idea that they believe can create waves in the market. The intention is to grow quickly, grab eyeballs and hopefully become a household name.
Quite a few such start ups have eventually grown to become market leaders and world famous companies. It sounds easy enough, have an idea, pool in some cash, get it rolling, right? Not quite. If you want to do it right and last in the cutthroat market space, you will have to put in some serious hard work.
Building a working business model
Ask yourself in what way you want to make money? That is the first question toward building anything resembling a business model. Normal businesses and practices as they were made in the good old days are long gone. The environment has changed rapidly and if you wish to build something sustainable, you have to up your game and adapt.
Here are a few such models that can help you on building your start up with a bit more clarity. Some of these ideas are radical and deviate from what is traditionally considered to be viable or stable.
Offering low prices for services is old school, try reverse auctioning. In this model, the consumer will be asked to quote a price that is low enough for them to pay comfortably, if any service provider is willing to work at a quoted price, then the consumer will have to agree to the seller’s terms of service. It is a simple way to get business and as long as there are customers that are willing to be reasonable, there will be people to serve and business to be done.
Low price market penetration
Offer services at low prices, lower than the larger companies in the field. Back this up with prompt service and friendly staff, you’ve got yourself a winning combo. Up the technology so that turn around time is minimal and keep the customer happy at all times, soon, the business base will begin to widen.
You can then offer a lot more products, tie up with manufacturers and you have a business rolling. While profit margins may be low, your turnover will be maximized. Amazon is the world’s largest e-commerce retailer, they grow at 22% a year, turnover $75 billion, but have a margin of 0.37%.
People are always looking for ways to make it easier for them to pay for and get things. Subscriptions make use of this desire. The model brings affordability to both sides, the customer as well as you, the business owner.
Charge a monthly subscription for your product, small monthly payment will save users a lot of money and will keep it flowing for you. Take the dollar shave club, a whacky ad campaign and quality products at low prices. That’s all it took.
If you have an idea for a product or service and if they fit into any of these models, you can seriously consider using them to break into the tight marketplace with aplomb.
Have you considered how you will break into the market?
Do you have a viable business model?
And that’s the Dish. Until next time, Belinda.
I am Belinda Bow
I love all things marketing and I thrive on seeing a business become re-energised and flourish. I am excited about life and I adore my family.
Within these articles, you’ll find some helpful tips and some real guidance to help you make the most of your business, and gain a good understanding of all things marketing.