Business models define how a company plans, sets goals and uses resources to achieve their goals. These models include theories, strategies, and practices that are designed to maintain the stability required for all new businesses to succeed. Here are four business models to consider adding to your startup plan.
1. Customer Loyalty
The loyalty business model can help to maintain high levels of customer satisfaction. Appealing to customers is an essential task for every effective marketing plan. For this model to succeed, the company must provide superior employee training along with high-quality products and services. Think Amazon!
It’s also necessary to know precisely what each customer wants instead of relying on collective opinions. Some businesses have only a handful of customers buy half of the products; yet, they waste time and money marketing to all customers in general. Know who the most loyal buyers are first and then track their information over time by using customer relationship management software.
Prototyping is not required, but it is highly recommended to help businesses develop products. A prototype is a sample that is released to the public as an experiment. Software developers use prototypes before they sell expensive software, and so do automotive manufacturers and cosmetic companies. Then, there is the evaluation that allows people to give their opinions and assist the developer in making changes.
3. Lean Manufacturing
Lean manufacturing is a system of minimizing waste of time, labor, and resources during the manufacturing process. Manufacturers analyze the causes of waste, which are either overwork or low work productivity. Overall, strive to reduce waste, increase work productivity, and increase the value of your products. We’ve got a great article here with some great examples of companies using lean manufacturing.
4. Freemium Model
Business people have to know from the beginning that most consumers want to save money. Make sure that the basic needs are affordable for everyone and then give customers the option to make upgrades. An example is the bait-and-hook strategy that is commonly used by software and cell phone companies. The bait is the free or low-cost product, and the hook is the paid services that accompany the product.
Having the right employees and a solid business plan are only the minor parts of starting a successful business. Every entrepreneur needs a set of rules and standards to govern their business by as it moves from one stage to the next (not to mention, some for themselves as well!). From freemiums to customer loyalty, there are business models to consider for your startup.