Business Models: How To Profit From Your Business Model

Business models represent the reasoning behind how an enterprise develops, delivers, and captures goods, in social, economic, cultural or any other arenas. The model may be formal or informal. Often, the formal business models are employed by enterprises engaged in specific activities. Examples include Ford, Boeing, General Motors, Burger King, Apple Computer and the like. The formal models usually seek to provide a systematic approach to strategic decision making. 

Business model modeling influences the selection of organizational structures, practices and goals and the manner in which information is communicated within and between organizations.

To answer the question above, you would need to know how you choose the right one for your enterprise. Some common examples are Ford, Apple Computer, Burger King, McDonald’s, Xerox and the like. To break down the different types of business models, let us take the examples one at a time.

Home-based businesses: Home-based businesses are generally low cost enterprises that require low start-up costs. Home-based businesses are usually run by one or two individuals who are responsible for day-to-day operations. Since home-based businesses don’t have employees, start-up costs are reduced to a great extent. However, since they don’t have fixed assets and premises, there is no protection against natural disasters or strikes. In such cases, how do you make money? Well, you can sell off the items or supplies at a wholesale price and make money from it.

Major corporations: Major corporations employ hundreds and thousands of people. Although their business model may look very different from small businesses, both need to make money somehow. How do they do this? Usually, these companies like to sell off their inventory and receive a payment from customers at the end of every month.

Major corporations like to use premium services where they can make a minimal investment and gain profit from it. A good example of premium service is the razor blades model. Most consumers pay the minimum amount required by the service provider to obtain the product. However, the product is sold at a much cheaper price than the market. The company makes a profit by making a commission from the sale. This type of business model is quite popular in markets like premium and groceries.

These are just some of the examples that show how you can make money usingbusiness models depending on the industry you are in. 

If your industry is not well known, then it might be difficult to profit from it especially if you start from scratch. Good thing there are a lot of resources readily available to you on the internet. You can easily learn more about how the different businesses make money and you can use that information to help you create your own business.

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