Model of Entrepreneurship

Business models can be divided into Six ways

Everything it takes to make something:

• Design,
• Raw materials manufacturing and labor.

Everything it takes to sell that thing:

• Marketing,
• Distribution& delivering a product and processing the sale.

How and what the customer pays:

• Pricing strategy
• Payment methods 
• Payment timing and so on.

What innovation and value addition provided:

• Cost reduction
• Convenience 
• Value proposition.

What type of business to be adopted

A business type can be defined in terms of value which customers are going to get as what the business gets out of it is the profit. Under mentioned types of business model that any for-profit business will fall into:

• MANUFACTURER 
• SOCIAL ENTERPRISE 
• TRADING 
• E Commerce 
• SERVICES

Manufactures 

A manufacturer takes raw materials and creates a product, or assembles pre-made components into a product (E.g. car manufacturers). A manufacturer may sell its products directly to its customers, or it can outsource sales to another company.

PRODUCTION: The processes and methods used to transform tangible inputs (raw materials etc.) and intangible inputs (ideas, information, etc.) into goods or services.

JOB WORK: Job work is the processing or working on goods supplied by another person/entity to complete a part or whole of the process. 

ANCILLARIES: Ancillary industries are those which manufacture parts and components to be used by larger industries.

TRADING

The act or process of buying, selling, or exchanging commodities, at either wholesale or retail, within a country or between countries. 

• Distributors 
• Retailers 
• Franchise

SERVICES

• Services like health, education, hospitality etc. 
• Professionals 
• Self employed 
• Service Providers for Companies

SOCIAL ENTERPRISE 

• Societies 
• Cooperatives 
• Trust 
• Company under Chapter 8 of Company Act 
• Farmers Producer Organization 
• Self Help Groups

E Commerce

• Business to Business 
• Business to Customer  
• Customer to Customer

Different Types of Business Models

1. Advertising 

Advertising model has been existing from long its only that with the value additions in the business with the new technologies emerging Tit has become easier and sophisticated , therefore from print to online. 

Examples: CBS, The New York Times, YouTube

2. Affiliate

The affiliate business model is related to the advertising business model but have some specific differences. 

Examples: TheWireCutter.com, TopTenReviews.com

3. Brokerage

Brokerage businesses connect buyers and sellers assists facilitate a transaction. They charge a fee for each transaction to either the buyer or the seller and sometimes both.

4. Concierge/customization

Some businesses collect existing products or services and bring a custom element to the transaction that makes every sale unique for the customer who grabs on to it. 

For Example: think of custom travel agents who book trips and experiences for wealthy clients. You can also find customization happening at a larger scale with products like Nike’s custom sneakers.

5. Crowdsourcing

In the current system crowdsourcing has become popular . These models are most frequently paired with advertising models to generate revenue, Companies that are trying to solve difficult problems often publish their problems openly for anyone to try and solve.

6. Disintermediation

Disintermediation is when you sidestep everyone in the supply chain and sell directly to consumers, allowing you to potentially lower costs to your customers and have a direct relationship them as well. Examples: Dell

7. Fractionalization

Instead of selling an entire product, you can sell just part of that product with a fractionalization business model. 

Examples: Disney Vacation Club, Net Jets

8. Franchise

Franchising is common in the restaurant industry. In a franchise business model, you are selling the recipe for starting and running a successful business to someone else.. 

Examples: CCD , McDonald’s.

9. Freemium 

This business model , gives away part of your product or service for free and charges for premium features or services. 

Example- LinkedIn 

10. Leasing

Leasing is most commonly used for high-priced products where customers may not be able to afford a full purchase but could instead afford to rent the product for a while. 

Examples: Cars, Direct Capital 

11. Low-touch 

With a low-touch business model, companies lower their prices by providing fewer services. Some of the best examples of this type of business model are budget airlines and furniture sellers like IKEA. Examples: IKEA, Ryan Air

12. Marketplace 

Marketplaces allow sellers to list items for sale and provide customers with easy tools for connecting to sellers. 

Examples: eBay, Airbnb 

13. Razor blade 

The razor blade business model is named after the product that essentially invented the model: sell a durable product below cost to increase volume sales of a high-margin, disposable component of that product. 

Examples: Gillette, Inkjet printers, Xbox, Amazon’s Kindle 

14. Subscription 

Subscription business models are becoming more and more common in today’s scenario. In this business model, consumers get charged a subscription fee to get access to a service. 

Examples: Netflix, Salesforce, Comcast

15. Reverse razor blade 

Flipping the razor blade model around, you can offer a high-margin product and promote sales of a low-margin companion product. 

Examples: Apple’s iPod & iTunes, and now Mac Books & Pages, Numbers, and Keynote 

16. Reverse auction 

A reverse auction business model turns auctions upside down and has sellers present their lowest prices to buyers. Buyers then have the option to choose the lowest price presented to them. 

Examples: Priceline.com, LendingTree.