The business model is the most fundamental foundation of a company. It is like an architect’s plan for creating and delivering value to customers and capturing that value. It describes how your company makes products or services, who buys them and how much they cost you to provide.
There are many different business models, but a few prominent ones include the following:
The franchise model is where a company finds people who want to start their versions of the business and trains them on how to do it. This is how McDonald’s and Subway work.
The subscription model is where you pay for something regularly. This is how Netflix and Amazon Prime work. (Data shows most people have both these services.)
The advertising model is when companies advertise their products to build brand awareness so that people will buy them later at full price or on-sale discount prices. Uber uses this model by offering free rides with ads on the backseat screens; Amazon offers free shipping with ads displayed during checkout; Spotify offers free streaming music in exchange for viewing ads while listening; Facebook sells ad space based on its user base demographics.”
The resources required to run your business will vary depending on your industry, but they typically include the following: