If you want to start a business, it’s important to understand the different types of business models and decide what will be best suited for your idea. In its most basic essence, a business model is the structure in which your business will operate and earn money out in the world!
If you are wanting a partner or investor, they will want to know how this will actually generate revenue. Your model will show the structure for:
Manufacturing - how the product will get designed and manufactured and who will be involved
Distribution - everything related to how you will get your product or service to customers
Sales– the sales channel in its entirety from how you will find the right customers to how the products will be sold
Revenue – how will money be collected, reinvested and how will you make more money
Different businesses require different types of business models. Depending on your product or service you might have several options as to what would work best for your company so it is important to know what is out there.
Make sure to do your homework on what could work for your industry and then decide what best fits your lifestyle. If your business could be done in a brick and mortar or online, and right now you want to be travelling the world, I would start by building an incredible ecommerce business.
If at some point you decide you’d also like to have a brick and mortar, make sure you are committed to staying “pretty local” for at least 16-24 months to make sure you get it off the ground properly, build a strong foundation, and have a team in place that can run it at your standards.
It’s also important to know that different models will require different amounts of time and money to launch. For example if you open a franchise, most have everything ready to go. There isn’t much business planning to do for the actual business. Most has been figured out, but you will pay more for that existing proven business. The benefit is that in most cases it just takes your commitment to implement the plan that’s already been made!
Keep these factors in mind when choosing what will work best for you!