Brainstorming Business Models

KNOW WHAT YOUR BUSINESS MODEL IS

Depending on the type of business you have, the products or services you sell, and the type of
person you are, there are many different business models.
Once you establish your business model, we can move into how to brand your business.
Be disruptive, no matter what you are. This is where you’re a true innovator and grab people’s
attention.
You may have a traditional bricks-and-mortar business, or just online. That’s fine so long as they’re
consistent.
For this use case I’ll assume you’re an online marketer.
7 Popular Business Models that are growing each day thanks to the power of the internet.

1. Affiliate model
I’m guessing you all know what this is? Maybe this is your main income online? There are so many
great programs out there that you can align yourself with to promote.
This is something I have done for around one year now and I make small commissions now and then.
While I love it, my focus is on my own products and services.

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You’re paid a commission (20-50% on the sale of the product) from the program owner and they’ve
done all the hard work creating the program. The good ones also give you pretty much everything
you need to then make money quickly (email swipes, images, training, etc)
Programs I am affiliated with are SAN, Friend or Foe, SAA, Clickfunnels, Aweber, Vimeo to name a
few.

2. Membership model
You charge a monthly fee and consistently feed the members new content to keep the hungry
followers interested in the subject matter of your market products and services.
This is a great way to get a recurring income but you have to give the customers constant flows of
top-quality content.
There are so many places you can host a membership model business, from a free Facebook group,
to paid places like Udemy, Clickfunnels, Lynda and others (they take a commission, not always a fee)

3. eComm site model
A place that you advertise products or services – be they your own or other suppliers products, and
people come to shop and buy based on searching for something they need.
eBay is a prime example, where you can sell your old stuff, or have an online shop that sells products.
This is a great model as you don’t need to create the site, the shopping cart, and people visit the
eBay site all the time for bargains.
Another type is the Amazong FBA model. This means Fulfilled By Amazon. Where you don’t even
take the stock or inventory, they take care of warehousing and shipping for a fee.

4. Online retail model
This is a really common option and you have probably used many, many times already.
You search in Google for something you want or need. Then a website is offered to you. That website
may have the exact products you want to purchase, so you browse, click add to cart, then checkout.
Simple and effective, yes. Easy? Well it depends. Getting ranked high enough in Google to be found
is super hard.
If you’ve built up a reputation, then you will get organic traffic from word-of-mouth customers
telling friends, etc.
Another challenge is getting people to actually checkout without leaving your site!
If they just leave without buying, they’re unlikely to come back.

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5. Service model
A fantastic way to save time and get exactly what you want from the comfort of your sofa!
Just Eat, Deliveroo, Seamless are examples of food services. You visit their website, order in a single
place, the type of food you’re interested in.
They sort the logistics of getting it to you quick smart. You don’t even see the commission they get;
it’s all built into the price you pay.
This is great for the restaurant because they don’t need to sort their own drivers and organise
deliveries, they just crank out the food!

6. Subscription model
We all probably use a subscription service. Previously I used to purchase magazines that were
delivered to the house. Now I can get that same magazine online and read on whatever digital media
platform I have.
Another example of this model is the TV packages such as Amazon Prime or Netflix.
You get so many channels to surf and watch your favourite programs or movies (yes the better ones
are upsold as premium offers! Clever marketing right!)
As with the membership model above, a great way to get a recurring revenue.

7. Freemium model
No matter what product you have, you should be able to offer a free version of something. If you
have a business that ships beauty products, you may have samples. Or free ebook or newsletter.
These are all examples of freemium.
Software companies offer their products for free, with additional functionality for the paid versions.
And if they’re smart, they have tiered levels too.

Start with free to create
interest, then ‘warm’ the potential customer up over time.

Your business may encompass one or more of these models but don’t try to do it all initially!
Which model is your preferred? Master that before thinking of scaling or broadening too much. The
thing is, you can have whatever dream business you’ve always wanted, the options are endless now,
thanks to the internet.
Plus, with minimal outlay too. Although, I find that if you have no costs or risk, you won’t treat it like
a million-dollar business!
You have to think of your company as a professional outfit from the off, so that it becomes one.

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ANALYSING YOUR BUSINESS MODEL

Here is the business model canvas by Alex Osterwalder and Yves Pigneu
within your business. Get the template free at https://www.strategyzer.

ur, which is a fantastic tool to help you visualise the components required
.com/canvas/business-model-canvas

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If we dive deep into each of the 9 components below, you’ll understand the importance of designing
correctly.

1. Key Activities: The most important activities in executing a company's value proposition. An
example for Bic, the pen manufacturer, would be creating an efficient supply chain to drive down
costs.
2. Key Resources: The resources that are necessary to create value for the customer. They are
considered assets to a company that are needed to sustain and support the business. These
resources could be human, financial, physical and intellectual.
3. Partner Network: In order to optimize operations and reduce risks of a business model,
organizations usually cultivate buyer-supplier relationships so they can focus on their core activity.
Complementary business alliances also can be considered through joint ventures or strategic
alliances between competitors or non-competitors.
4. Value Propositions: The collection of products and services a business offers to meet the needs
of its customers. According to Osterwalder (2004), a company's value proposition is what
distinguishes it from its competitors. The value proposition provides value through various elements
such as newness, performance, customization, "getting the job done", design, brand/status, price,
cost reduction, risk reduction, accessibility, and convenience/usability.

The value propositions may be:

Quantitative – price and efficiency

Qualitative – overall customer experience and outcome

Customers

5. Customer Segments: To build an effective business model, a company must identify which
customers it tries to serve. Various sets of customers can be segmented based on their different
needs and attributes to ensure appropriate implementation of corporate strategy to meet the
characteristics of selected groups of clients. The different types of customer segments include:

Mass Market: There is no specific segmentation for a company that follows the Mass Market
element as the organization displays a wide view of potential clients. e.g. Car

Niche Market: Customer segmentation based on specialized needs and characteristics of its clients.
e.g. Rolex

Segmented: A company applies additional segmentation within existing customer segment. In the
segmented situation, the business may further distinguish its clients based on gender, age, and/or
income.

Diversify: A business serves multiple customer segments with different needs and characteristics.

Multi-Sided Platform / Market: For a smooth day-to-day business operation, some companies will
serve mutually dependent customer segments. A credit card company will provide services to credit
card holders while simultaneously assisting merchants who accept those credit cards.

6. Channels: A company can deliver its value proposition to its targeted customers through different
channels. Effective channels will distribute a company's value proposition in ways that are fast,

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efficient and cost-effective. An organization can reach its clients through its own channels (store
front), partner channels (major distributors), or a combination of both.

7. Customer Relationships: To ensure the survival and success of any businesses, companies must
identify the type of relationship they want to create with their customer segments. That element
should address three critical steps on a customer’s relationship: How the business will get new
customers, how the business will keep customers purchasing or using its services and how the
business will grow its revenue from its current customers. Various forms of customer relationships
include:

Personal Assistance: Assistance in a form of employee-customer interaction. Such assistance is
performed during sales and/or after sales.

Dedicated Personal Assistance: The most intimate and hands-on personal assistance in which a sales
representative is assigned to handle all the needs and questions of a special set of clients.

Self Service: The type of relationship that translates from the indirect interaction between the
company and the clients. Here, an organization provides the tools needed for the customers to serve
themselves easily and effectively.

Automated Services: A system similar to self-service but more personalized as it has the ability to
identify individual customers and their preferences. An example of this would be Amazon.com
making book suggestions based on the characteristics of previous book purchases.

Communities: Creating a community allows for direct interactions among different clients and the
company. The community platform produces a scenario where knowledge can be shared and
problems are solved between different clients.

Co-creation: A personal relationship is created through the customer's direct input to the final
outcome of the company's products/services.

8. Cost Structure: This describes the most important monetary consequences while operating
under different business models. A company's DOC.

Classes of Business Structures:

Cost-Driven – This business model focuses on minimizing all costs and having no frills. e.g. Low-cost
airlines

Value-Driven – Less concerned with cost, this business model focuses on creating value for products
and services. e.g. Louis Vuitton, Rolex

Characteristics of Cost Structures:

Fixed Costs – Costs are unchanged across different applications. e.g. salary, rent

Variable Costs – Costs vary depending on the amount of production of goods or services. e.g. music
festivals

Economies of Scale – Costs go down as the amount of goods are ordered or produced.

Economies of Scope – Costs go down due to incorporating other businesses which have a direct
relation to the original product.

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9. Revenue Streams: The way a company makes income from each customer segment. Several
ways to generate a revenue stream:
Asset Sale – (the most common type) Selling ownership rights to a physical good. e.g. retail
corporations
Usage Fee – Money generated from the use of a particular service. e.g. UPS
Subscription Fees – Revenue generated by selling access to a continuous service. e.g. Netflix
Lending/Leasing/Renting – Giving exclusive right to an asset for a particular period of time. e.g.
Leasing a Car
Licensing – Revenue generated from charging for the use of a protected intellectual property.
Brokerage Fees – Revenue generated from an intermediate service between 2 parties. e.g. Broker
selling a house for commission
Advertising – Revenue generated from charging fees for product advertising.

YOUR DREAM BUSINESS

Mel Robins released a great mini-series around 13
topics of life-challenging stuff we all go through. One I
picked out was around career.
Even though she talks about getting the job you want,
I’m using it here to discuss the dream business that you
may want to create for yourself.

She uses the metaphor of book and chapters. How many chapters will your (career) business have
over your lifetime?
Just start with a blank page and write down the first sentences of the chapter. Then it becomes your
book over time.
At my age now and I’m more excited than ever about starting new businesses (Chapters)!
I was always motivated as a kid to be an entrepreneur and chased goals and dreams, so it comes
naturally to me to try new things.
However, in the podcast series, Mel said we’re not always able to work out exactly what we want
and the direction we feel we should go in. Continuing the metaphor – like writer’s block.
Sometimes you may get writers block – where you don’t know what to write. Or where something
is not your strongest subject you don’t know how to start.
What Mel gets you to think about is if money was not a consideration, what would you do?
What could you do that would really motivate you and inspire you?

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You may have self-doubt and have used many excuses in the past; the market is saturated, who
would buy from me, what could I possibly have that would make money and be something of value,
I’m a real technophobe, I hate public speaking, etc
Just start and see where it goes, don’t worry about the content.
What is your calling? If you don’t know that, just go in a direction and if that doesn’t feel like it, pivot
into something new. Just not every 5 minutes!
I love creation, coaching, teaching, helping, problem solving.
So for me, I always have too many thoughts and ideas I need to just blank out some until I finish the
ones I’m on.
Given the amount of businesses and the life I have, I cannot do it all. I’m good at the ones I’m
involved with so I should focus on those but expand those more, rather than new shiny objects that
look like the hot new thing.

MY DREAM BUSINESSES
My life is incredibly busy, plus I’m a single Dad! Here are some
of my dream businesses. Hey, they do get me down from time
to time, it’s not all a bed of roses! But this is what I’m
passionate about and love doing.

Business #1 - IT Consultancy
I love this business but at the moment it’s just me and I go into big corporations and help them
shape business transformation, help them with big change programs, define processes and develop
frameworks.
So even though it’s consultancy, it’s me exchanging time for money. Don’t get me wrong, it pays
really well, so I’m not complaining. And as I said, I love effecting changes in organisations.
But I’m limited to the amount of time I can input into this business.
Business #2 – Real Estate Properties
There are a number of properties I own and rent out. I find bargains in the market and develop
them. Then they’re rented out to families or business people.
Not quite a passive income but not far off it, once they are set up and running.
The downside to this business is that it takes money to invest. Then the management of the
properties are down to yourself. Unless you pay an agent (which cuts into your profits)

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Business #3 – Stocks and Foreign Exchange Currency trading
I’ve dabbled in the stockmarket for many years and done alright. Again here, you need capital to
invest and you have to be in for the long-haul. You’ll never guess the tops and bottoms and cycles
of the markets.
Now I just invest in a tracker fund (minimal charges) that over time will be my pension fund.
The Forex market is a $6 trillion a day market! This is the promised land for people, as gurus suggest
it’s easy pickings!
But governments trade currency, multi-national corporations trade currency for arbitrage of
imports and exports. It’s complicated but there are some big fish in this game! Sharks some would
say haha!
It’s something you need to put ‘flash cash’ into. That’s money you can afford to lose.

Business #4 – Digital Agency
Helping companies brand themselves, build their brand, build their websites, SEO. Following on
from starting their brand, they must use social media now or become irrelevant.
This is quite time consuming and at the moment I haven’t leveraged it enough to make serious
dough! But it’s fun and I love helping people design their company vision.
But it’s there and I consult with existing business owners and new startups on the best approach for
maximum effect. Again, it’s my time which is the bottleneck.
Business #5 – Affiliate Marketing
This is a fantastic way to get in to business and not have to do all the work up front yourself with all
the costs associated with that!
It’s not new but there are always emerging offers for you to promote.
Clickbank has been around many years and you can decide which products are in the market you’re
interested in, to promote.

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Then there are those around health and fitness, SAAS (Software As A Service) such as Clickfunnels,
learning how to be a marketer yourself, etc.
Options abound and although I’m not active in this space, I often get commissions from the affiliate
programs I am involved with.
(Just ask if you want to know which programs I’m making money from)

So, there you have a few ideas from the things I’m doing.
You can work out where your skillset fits and follow that. Listen to your heart and whatever moves
you, as that will be something you’ll spring out of bed for each day!
Invent and dream initially, until you can work out exactly what you want to do.
Mindmap and brainstorm, put words down on paper for your particular market.
The worked example Mel used in her audible podcast was animals. You could go to help at the local
dog pound, offer support for the woodland trust or nature reserve, help put out content for animal
shelters, volunteer at the local vets.
This is how you turn a single page into a chapter, then potentially your book.
Just think of the endless possibilities around your chosen field, market, niche or passion.

You can do it and have the dream (job) business you desire...
Just start writing.

From here, you can then start to think about your brand. You may have already established your
business and the model you’re working to.
But how strong is your brand? How do you stand out from the crowd?

Check out the next page for the next steps for exactly how to do that…

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