How to Choose an Ideal Business Model For Your Startup

Business Model

Guaranteeing that your product satisfies the market’s demands is simply one aspect of creating a successful firm.

The other critical component is determining how you will generate money. And that’s where the business model enters the picture.

A business model is a way to explain everything about a company, such as its service, product, or other factors.

It includes a full explanation of every potential company activity, different workers, their responsibilities, income sources, advantages of a specific process, and much more.

Moreover, you will need to create a business model canvas to flesh out your company’s concept.

Hence, if you are looking for business model canvas examples, keep reading:

Components Of A Business Model

A business model may be divided into three sections in its most basic form:

  • Everything that goes into manufacturing: style, materials, production, labor, etc
  • Everything needed to sell that item: promotion, distribution, service delivery, and payment processing
  • The customer’s payment plan: payment methods, payment schedule, pricing strategy, etc.

As you’ve seen, a business model is an investigation into your expenditures and costs, including how much you should demand your service or product.

Additionally, it comprises your market segment, value offering, marketing and sales operations, and so forth.

Basic Business Models

Here are the basic business models you should consider:


Resellers may not consistently manufacture or even store the products they sell. However, they locate things or promote brands.

Furthermore, their profits are often dependent on the cost of the product and the amount they should pay to purchase or sell items.

Affiliated marketers, also known as VARs (value-added resellers), come under this group.


A company can create and sell its services and products.  It is probably the most prevalent strategy. 

Goods/services can sometimes be marketed and delivered through various channels, and they can be supplied in:

  • Tangible form
  • Online forms: one-time purchases or continuous subscriptions


An aggregator creates a sense of unity and afterward charges for direct connections to it. In several ways, news and publications sites match this model because they make a subscription base.

After that, they start charging advertisers a premium to allow entry to their group via a positioned commercial.

Comparative online stores, such as Shopzilla, and voucher code websites, such as Woot, are good instances of how and why the internet has expanded this field.


Brokerage firms link sellers and buyers as well as assist in the completion of a transaction.

Moreover, they require payment either to the purchaser or the seller, and occasionally both for every transaction.

A real estate agency is among the most frequent brokerage firms. Still, other brokerage firms, like cargo brokers and brokerage companies, enable construction firms to locate purchasers for soil excavated from new foundations.

How To Choose The Business Model

Here is what you must consider before choosing a business model:

Market Potential

It is usually necessary to figure out how huge your concept’s market can be. But there is nothing incorrect with entering into a tight niche.

However, you may end up building a different company than if there are more possibilities.

Market Environment

You must learn who your competitor is and what you need to accomplish and understand their value offer.

It is not a terrible thing to have rivals who create and demonstrate a need for your concept.

Ideal Client

This may be a hypothesis in the beginning stage, but you must carefully describe the features and attributes of the consumer you aim to serve.

After this, you may begin to have a greater understanding of the industry’s size and how to reach it effectively.

Value Proposition

if you cannot articulate why a market will favor your concept above another, you’re doomed to flounder while attempting to expand.

Channels of Distribution

There are several methods to bring your service, product, or concept to market. The most common options include:

  • Direct sales staff
  • Wholesalers
  • Online stores
  • Retail shops
  • Salespeople
  • Marketplaces

In rare circumstances, you may even select a mix of options.


The method of selecting a business model is essentially an effort in comprehending the basic models and selecting the best match for your concept into an elimination process.

A new company strategy might be tremendously profitable, but it also carries more significant risks.

Moreover, you do not even know whether or not clients will embrace the model.

However, no matter what happens, never lose hope and take advantage of the business models mentioned above or search the business model canvas examples.