What is the business model?
What is the business model? Before moving forward to the business model. Let’s see what is business? Business means creating an organization which benefit others and will be profitable for you in return.
What is the business model? Business model means creating a plan how to run a business, your vision, mission, core values, the main product or service or how to operate.
To crate a business model, you may keep some important questions in mind. Who, what and how? What you are offering, how are you going to perform operations, and who will be your target customers.
Here are some steps in the video, how to create a business model.
A good business model, leads to the successful business. 
Essential Components of a Business Model
Value proposition
Target market
Competitive advantage
Cost structure
Problem and solution
Profit margin
Most Common Types of Business Models
1. Subscription Model
A subscription business model involves a fee that customer has to pay for a definite period of time to use the peroduct or service.
2. Bundling Model
The bundling business model means selling combination of products together by making different offers or deals.
3. Freemium Model
The freemium business model includes the software companies that provide free access for the users to use their products.
4. Razor Blades Model
You’ll know that replacement razor blades cost more than razors themselves. Companies offer a cheaper razor with the understanding that you’ll continue to purchase more expensive accessories.
5. Product to Service Model
This type of business model allow customers to get a result instead of the equipment that delivers that result.
6. Leasing Model
Under a leasing business model, a company buys a product from a seller. That company then allows another company to use the product they purchased for a periodic fee. Leasing agreements work best with big-ticket items like manufacturing and medical equipment.
7. Crowdsourcing Model
Crowdsourcing involves receiving opinions, information, or work from many different people using the internet or social media. These sorts of business models allow companies to tap into a huge network of talent without having to rent in-house employees.
8. One-for-One Model
As the name suggests, the one-for-one business model means that a company donates one item to a charitable cause for every item that is purchased.
9. Franchise Model
A franchise is an established business blueprint that is simply purchased and reproduced by the buyer, the franchisee. The franchiser, or original owner, works with the franchisee to assist them with financing, marketing, and other business operations to make sure the business functions because it should. In return, the franchisee pays the franchiser a percentage of the profits.
10. Distribution Model
A company operating as a distributor is responsible for taking manufactured goods to the market.
11. Manufacturer Model
One of the foremost traditional business models, the manufacturer model refers to when a manufacturer converts raw materials into a product.
12. Retailer Model
A retailer is that the last link within the supply chain. These businesses purchase goods from distributors and then sell them to customers for a price that will both cover expenses and turn a profit.
What is the Business Model? How to Choose the Right Business Model for You
In order to narrow down your options, you’ll want to start with your small business idea and then ask yourself the following questions:
How will my product or service benefit the customer?
How will I generate revenue?
Who’s my target customer?
What startup costs am I looking at?
Which expenses will be fixed and variable costs?
Do I need support from investors?
With the answers to those questions, you’ll be ready to gain a far better understanding of the way to structure your business model.
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