When running a business, the model you choose can have a significant impact on your success. So when starting a business, it is important to consider all of your options.
We have put together a list of the strongest business models available, in the hope of providing some clarity on the best option for you.
So let’s dig in…
B2B (Business 2 Business)
One of the oldest business models is B2B (business to business), this involves one business providing a service or product to another business. Whether or not this is the correct model for you to use will be dependent on the offering you provide.
Whilst the sales cycle is a longer process with these transactions, the benefit is, the order value tends to be much higher. B2B marketing has seen a significant change in marketing over the past decade. Previously, it would be carried out via the more traditional marketing channels, but as social media and other online platforms grow, more B2B marketing is being carried out via these.
B2C (Business to Consumer)
B2C (business to consumer) is also one of the longest standing business models. It involves businesses selling directly to those who will be using their products (consumers). This could be anything from food and clothing, to furniture and oven cleaning.
B2C business tends to have a larger volume of transactions, but the order value tends to be significantly lower than B2B.
Traditionally, B2C marketing was considered to be the more exciting method of advertising as it allowed more innovative methods to be used. However, as previously mentioned, this has changed over the past decade or so and has become on par with B2B.
White labelling is a business model used when applying your branding to a generic product. This is ideal for when wanting to keep your investment low, as less money is required for the production process of products.
This type of business model is ideal for those wishing to start a product-focused business, but who have minimal startup costs and are specialists in sales and marketing.
Wholesaling was traditionally a B2B model of marketing where companies would sell their product in bulk to shops and warehouses, who would then sell the product to consumers.
However, the trend of B2C wholesaling has come into play, with many businesses offering opportunities for consumers to buy bulk products at the same discounted prices.
Subscription services have been around decades, but the last 5-10 years has seen a huge uptake in these services. Traditionally thought of in the magazine sense, this involves a consumer signing up and making regular payments to a business for ongoing shipments of their product.
This type of business model has been used for everything from food boxes, to beauty hampers, shaving kits and even craft boxes. This type of business model can be beneficial as they tend to employ a contract period, meaning you have more visibility of future profits, but they do require some setup to deploy.
Research The Support Available
You don’t have to go through launching and growing a business on your own.
Whichever business model you choose to launch be sure to research all the different type of support that is available. This could range from funding options, networking groups or even business growth strategists that can help take your business to the next level.
Which do I choose?
As discussed, each business model has advantages and disadvantages, but ultimately, it depends on the offering your business provides. For example, if you were selling sofas, a subscription model would not be suitable as it is a long term purchase.
Therefore, it is important to review the various business models and ask yourself, which one is best suited to my capabilities and business? All of the above models have been used successfully, therefore, proving it is possible to make them a success. But which one, you must decide…