Business Model Examples

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We discussed in previous articles what a business model is, and we made the difference between it and a business plan. However, the subject is complex and deserves more attention. To reiterate, the business model represents the strategy of a corporation or company; simply put, it presents the ways in which the company intends to make a profit. The simplest business model is to make a product, or offer a service and sell it for profit. Yet there are many more variations, complex and complicated, that describe a company’s strategies; they may also differ depending on the type of company and what it produces or what it has to offer.

Precisely because the subject is difficult to explain in layman’s terms, we thought of coming up with some business model examples; they will not only give you a better idea of what a business model is, but they may also inspire you to find the best strategy for your business. That being said, here are some common and popular business model examples, some of which you may already have come across without being aware:

  • The Advertising Model – This was and still is one of the most popular business model examples, especially in television, radio and other mass-media resources. In this category, making a profit from advertising is relatively easy, because companies go where the most people are, and where the most people can see them. In recent years, since the development of the Internet, advertising has moved its focus on popular websites. Even a simple blog with lots of followers and popular content can attract businesses that want to play advertisements there. The only downside is that there are already so many websites, and the competition is so great that it is extremely difficult to succeed and really attract attention. It is not impossible however, since a large part of the world revolves around advertising and since the means for communication globally have improved so much in recent decades.
  • The Affiliate Model – This business model is usually performed by an individual or a company that acts as intermediary. It makes connections between another individual or company that sells a product or a service and potential customers. To be able to do this job, one needs a lot of connections in the domain they want to operate in. Those with connections and business savvy can easily perform this job nowadays as long as they know how to attract their own customers, and the Internet is very helpful in this endeavor.
  • The Add-on Model – One of the less honest business models, this is the type of deal where the customer ends up paying more than they had counted on because certain subsequent fees and extra charges are added in the end. A good example are airline ticket websites, that advertise a certain price for their tickets but omit until the last moment airport fees and other luggage fees.
  • The Franchise Model – Among all business model examples, this is one of the most spread out, gaining global activity. The good thing about franchises is that anyone with some capital and business knowledge can have one, as long as they convince the mother company of its success. Those who want to open up a business win because they end up with a successful recipe, and they don’t have to struggle too much to get attention and customers, and the initiating company gets paid royalties, or a percentage of the profits.
  • The Pay as You Go Model – Very popular in mobile phone companies, which among monthly fees where you pay a certain sum and you get a limited amount of minutes, also operates with “credit”. The customer pays a sum, and then the credit is consumed as minutes are consumed, so the customer cannot overcharge his/her bill.
  • The Recurring Revenue ModelĀ  – This model focuses on getting and keeping customers on a long-term basis. It can be very costly to get customers, so it is in the interests of the company to try and keep them as long as possible. Businesses that also employ this model are usually banks, insurance companies, and even certain franchise shops or pharmacies. The customer has to sign a contract, or some sort of deal, or subscribe in a customer program with that company. For the customers, the advantage is that they benefit from certain discounts, or get special offers on certain products or services.

These are some of the most popular business model examples; there are many others, and their number can be infinite depending on the goals and resources of a company. We hope this information was useful and inspired you to achieve your goals.

August 2022