Business model types. Knowing and understanding the types of business models is a mandatory step for success for all types of entrepreneurs. Because for a business idea to work, you first need to make it very clear what your company will do.
What problems will it solve or needs will it meet. So, the business model does exactly that: it will give you a clear vision of what your business will do to deliver its value to your customers and market. And many professionals confuse a Business Model with a Business Plan.
And they are not the same thing. So, understand now what a business model is and its main types. All in a practical and summarized way.
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1. WHAT IS A BUSINESS MODEL 2. DIFFERENCE BETWEEN BUSINESS MODEL AND BUSINESS PLAN 3.
ALL ITS IMPORTANCE 4. MAIN TYPES And at the end, a practical example of a very used business model. So let's go!
1. WHAT IS A BUSINESS MODEL Basically, this is how your business will add value to deliver to your customers. In other words, it's identifying your business's value proposition and how it will be worked on.
In a practical way, the business model describes the company's main activities to understand whether the value it will generate is really valuable and viable. Literally, how to deliver the best product or service to your customers in the right and profitable way for your business. Both in the short, medium and long term.
With your development and work, the business model will bring definitions and important information. Building a macro view of your business idea. From this vision and information, it is possible to deepen in other very important pillars of viability.
How to delve into the product or service in question, study the target audience and competition, evaluate the market in general and draw up strategies (such as marketing, financial, among others). So, we can say that the business model builds a structure to lead a company in a safer, more organized and planned way. 2.
DIFFERENCE BETWEEN BUSINESS MODEL AND BUSINESS PLAN The big difference between the Business Model and a Business Plan is a more detailed document that aims to analyze the real viability of a business idea. Above all, the business plan aims to minimize the risks and uncertainties of the project. As we said earlier, based on the relevant information that the Business Model brought, the Business Plan needs, above all, to identify the potential of the business.
As well as possible failures, threats and project errors before putting it into practice on the market. In other words, a business plan is the set of information and analyzes that need to be studied and worked on to find out if the business idea is, in fact, viable and profitable. And in it, points are worked on as necessary initial investment, costs and expenses, marketing strategies, growth, sales, profit projection for the short, medium and long term, in short.
In this way, we can say that the Business Model and a Business Plan are complementary. One may be the answer to the other. That is: the business model structures the idea and analyzes whether its value proposition is relevant.
At the same time, understand how it will generate revenue, how it will be delivered to customers, how it will be worked on and how all this information relates to each other. And the Business Plan structures everything that the Business Model initially developed. Deeper and more detailed.
Exploring points such as costs, sales, processes, structure and necessary team, marketing and sales strategies, in short. So, in a way, we can say that starting from a Business Model, it is possible and very important to work on the Business Plan. That way, if you want to understand even more about Business Plan, we have a very complete playlist that shows everything about this subject with very practical videos.
If you want to watch it, just click this button above or the link we leave in the description. 3. ALL ITS IMPORTANCE With the business model, it is possible to have a macro and strategic vision if the business idea really has potential or not.
In this way, identify whether there is a value proposition for your company that is very relevant and differentiated for your potential customers. As well as having good cost management and profitability. Likewise, it also helps in the decision-making process.
Since it will bring a clearer understanding of how the business will work to generate good revenue. With this, you can have a very clear, quick and practical view of your business. This facilitates understanding for those involved.
As partners, investors, team, partners, among others. Still, the business model is a practical tool to be worked on and developed. He is direct and manages to focus where it really matters.
4. MAIN TYPES 1. B2C Abbreviation of Business To Customer, which in Portuguese is Business for Customers.
It is a business model between a company directly with end customers, its consumers. In this case, individuals. That is, without having intermediaries in this relationship.
That is, the company sells its product or service directly to its end customers. For example: bars or restaurants, beauty salons or companies that produce their products or services and deliver them directly to their consumers. Generally, in this model, companies present physical stores or apps or websites where their customers can buy directly from them.
2. B2B Short for Business to Business, which in Portuguese means something like Business to Business. This model is based on a relationship between companies.
That is, a company is a customer of another company (or legal entities). As an example, we can mention advertising agencies, which have other companies as their clients. Or even supermarkets, which buy products from other companies to resell them in their stores.
However, keep in mind that supermarkets work both B2B and B2C. Because when they buy products from other companies to resell, they work the B2B model. But when they sell to their end customers or consumers, they work in the B2C model.
And we have a video that explains B2B well. If you want to watch it, just click this button above or the link we left in the description. 3.
D2C It is an abbreviation of Direct to Consumer, which in Portuguese is something like Direto Ao Consumidor. It is very similar to B2C. The difference is that the products leave the factory directly and are delivered to end customers.
As an example, we can mention the outlets of large manufacturers (such as clothing and footwear). Which make their production available in outlets or own stores for end customers. 4.
P2P It means Peer to Peer or Person to Person in Portuguese. Here, the model is between a natural person directly with another natural person. However, with some platforms as intermediaries for these negotiations.
And they earn a percentage on the transactions carried out. We can cite as an example platforms such as Mercado Livre, OLX, Shopee, among others. 5.
FREEMIUM This business model is based on offering free products or services to your customers. However, companies use lures to make their customers choose to pay for a more premium service or plan or with more benefits. Some examples are: Spotify, which is free but offers premium plans to avoid advertising.
Just like Youtube itself, which has plans to prevent advertisements from appearing and which also gives access to its own content. 6. FRANCHISE Also known as Franchising, franchising is a business strategy focused on expanding a brand, company or even a business model.
business. It is a relationship that involves two sides: franchisor and franchisee. Where: A franchisor is a legal entity that owns the rights to a certain brand or patent, which formats a business model and assigns to third parties (which in this case are the franchisees) the right to use this brand or patent and the developed know-how, being remunerated by them for using this system.
And the Franchisee is an individual or legal entity that joins the network of franchises idealized by the franchisor, upon payment of certain fees for the assignment of the right to use the brand or patent and transfer of know-how. And you also need to commit to following the model determined by the franchisor. As an example, we can mention fast-food chains such as McDonald's or car dealerships.
And we have a video that explains how the Franchise Model works. If you want to watch it, just click this button above or the link we left in the description. 7.
SUBSCRIPTION This model is based on subscriptions, in which companies offer their services and products for a fee. And the recurrence of this payment can vary, such as being monthly, bimonthly, half-yearly or even annual as well. Examples we can cite are wine clubs or streaming services such as Netflix.
8. SAAS Abbreviation for Software As A Service, SaaS is a business model in which a company offers access to its platform through a monthly payment or subscription. That is, this model works in a similar way to the Subscriptions, which we talked about earlier.
But here, all the structure and marketing are done online. In this way, customers can access these platforms from anywhere over the internet. As an example, we can mention: streaming services like Netflix again, payment platforms like PayPal and even ERPs, which means Enterprise Resources Planning.
Which are integrated management system tools. In other words, the Enterprise Resource Planning works. As a sales system, stock management, financial control, among many other areas.
And nowadays it is widely used by different types of businesses. 9. MARKETPLACE It is a business model where several sellers, brands or companies can sell their products or services in a single place, website or application.
It's like an online shopping center where visitors have access to several stores. Including having easy access to the same product with different price options and models. For example: Amazon, Mercado Livre and Shopee also offer spaces for companies and individuals to set up their spaces to sell their products.
And we have a video that explains how the Marketplace Model works. If you want to watch it, just click this button above or the link we left in the description. 10.
BAIT AND ANZOL This business model has this name because companies offer a product linked to another. That is, it offers a product with a lower or more affordable value (even with a lower profit margin). In this way, it offers another complementary product to this product.
In this way, customers end up buying one product to be able to use the other. As an example, we can mention coffee machines. In which the customer buys the coffee machine once, but buys the capsules several times for consumption.
11. COLLABORATIVE ECONOMY In practical terms, this is the business model based on platforms that offer shared services to meet or solve a need or problem for its customers. All this done through the platforms themselves.
Like Uber, iFood, Airbnb. Or even coworking, where people pay less to use a shared workplace . Anyway.
These were just a few examples of widely used business models. But, if you know any other type of model that we don't talk about, write it here in the comments and share it with us! And as promised, we will indicate here a business model widely used by companies of all sizes.
Which is Canvas, also known as Business Model Generation (or Business Model Generator , in Portuguese). It consists of representing the business model visually on a board. He is very practical and quite assertive.
This is precisely why it is used so much. Basically, it addresses 9 topics that represent the main points that must be taken into account in any type of business or company. Which are: 1- Value Offer 2- Customer Segments 3- Customer Relationship 4- Channels 5- Key Activities 6- Key Partnerships 7- Key Resources 8- Cost Structure 9- Revenue Sources So, if not already know the Canvas Business Model, we highly recommend watching our video that shows the step by step of how it works.
If you want to watch it, just click this button above or the link we left in the description. These were the types of business models that we considered to be the main ones. Have you seen how they can help a lot to define the value proposition of your business?
And so, understand if your idea is really viable, profitable and differentiated. For sure, working the business model is a pillar of success in entrepreneurship. Can believe!
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And just to recap what we talked about here: 1. WHAT IS A BUSINESS MODEL 2. DIFFERENCE BETWEEN BUSINESS MODEL AND BUSINESS PLAN 3.
ALL ITS IMPORTANCE 4. MAIN TYPES We hope you enjoyed it! And if you want to learn more about how to set up and manage your own business, visit our YouTube channel where we have several videos on this subject, okay?
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