Entrep

• Business Model


  Who your customer is, what value you can create for the customer, and how you can do that at reasonable cost
• Different Types of Business Models

  • Manufacturing
  • Distributor
  • Retailer
  • Franchise
  • Brick-and-mortar
  • Bricks-and-clicks
  • Direct Sales
  • High Touch
  • Family-owned
• Manufacturing


  • A person or registered company which makes finished products from raw materials in an effort to make a profit
  • Goods are later distributed to wholesalers and retailers who then sell them directly to customers
  • Products are made in big-scale so as to meet the irresistible demand coming from consumers
• Distributor


  • An entity or a company that purchases noncompeting products or product lines, stores them in warehouses, and resells them to retailers or directly to the customers
• Retailer


  • A person or business that purchases goods from the wholesaler or directly from the manufacturer
  • Retailers normally do not produce their own items
  • They purchase goods to sell those goods in small quantities to end consumers
• Franchise


  • A franchisor provides access to his business' proprietary knowledge, processes, business system and a brand's trademark or trade name in order to let the franchisee to sell a product or provide a service under his business's name
  • A franchisee pays a royalty and often an initial fee for the right to do business under the franchisor's name and system
• Brick-and-mortar


  • A model that refers to the old-fashioned street-side business that sells products and services to its customers face-to-face in an office or store that the business owns or rents
• Bricks-and-clicks


  • A model where a company combines its online and a physical presence
  • Customers may place their orders online and then pick up the products from the physical stores
• Direct Sales


  • Products are directly sold to the customers, could be in the form of a face-to-face conversation or small gathering and salesperson gets a commission of every sale
• High Touch


  • Uses a lot of human interaction and involvement in order to the experience highly personalized
  • This type of business operates on trust and credibility to earn revenues for the company
  • The highest involvement of the customer with the business the more pay they give and the more loyal they become
• Family-owned


  • A family that is owned and operated by a family
  • Decision making are controlled by family members
• Types of modern business models

  • Nickel-and-dime
  • Freemium
  • E-Commerce
  • Subscription
  • Aggregator
  • Online Marketplace
  • Hidden Revenue
  • Data Licensing / Data Selling
  • Agency-Based
  • Affiliate Marketing
  • Dropshipping
  • Network Marketing
  • Crowdsourcing
  • Blockchain
  • Low Touch
  • Razor and Blade
  • Consulting
  • Social Enterprise
• Nickel-and-dime


  • Makes use of the lowest price strategy in selling basic product or service to the customers
  • Since the basic price is low, additional charges for the other perks and services that are offered are required
• Freemium


  • Combination of free and paid services normally used by tech companies in the Software as a Service (SaaS) or apps business model
  • Usually the basic services are free but for a limited time or with limited features
  • The basic service comes with app advertisements and storage restrictions but the premium plans do not have, to unlock upgraded features, the customer has to choose for paid services
• 1. Commerce


  • An upgradation of the old-style brick-and-mortar business model
  • It focuses on buying and selling of goods or services creating a web-store using the internet
  • Transactions of transfer of money and data are executed via the Internet
• Subscription


  • Offers a long term contract to customers by paying a fixed amount every month or year
  • The company needs to provide enough value to its customers for repeat purchases by visiting the website over and over again
• Aggregator


  • A network model, the company acts as a middleman between two individual parties
  • Under this business model, most companies provide information and sources on a single industry
  • It makes profit by through commissions
• Online Marketplace


  • There is a collection of different sellers into one platform
  • Sellers compete with each other to deliver similar product/service at competitive prices
  • Good brand built from factors such as trust, free and/or on-time home delivery and quality sellers is vital
  • Online marketplace earns commission on every sale carried on its platform
• Hidden Revenue


  • Company offers its services for free
  • The company earns revenue streams from advertisements which are paid for by identified sponsors when information is shared
• Data Licensing / Data Selling


  • Internet has given rise to the importance of data
  • Data is the major element in the web technology where companies need vital information to perform its operations and gain profit
• Agency-Based


  • This is a partner company that has specialization in doing non-core business activities such as advertising, digital marketing, PR, even janitorial and security
  • Usually, businesses that has no internal know-how hire agencies to acquire a customizable solution for their needs
• Affiliate Marketing


  • Commission-based model where companies make profit by promoting a partner's product and convince its followers and users to buy the same
  • In return, affiliate gains a commission for every sales opportunity it referred to their vendor companies
  • The affiliate website oftentimes provides product review
• Dropshipping


  • The owner has no ownership of the product or hold any inventory but he has an E-store
  • He has many different suppliers/ wholesalers to sell their product on the website
  • When an order is placed on a business owner's website, the partner sellers then deliver the products directly to the customer
• Network Marketing


  • Often called multi-level marketing, works on direct marketing and direct selling philosophy
  • There are no retail shops here but the offerings are sold to the target market directly by the participants
  • Commission-based model where participants earn income through selling and recruitment of members
• Crowdsourcing


  • Solicits intellectual information of users on what value-added concepts be inputted in the product and or service offering
  • There is an open call for contributions to help solve the problem
  • In some instances, the contributor of the solution is given monetary or recognition as rewards
• Blockchain


  • This is a digital ledger that is irreversible and decentralized
  • No one owns and monitors this digital database but anyone can contribute to it
  • Works on peer-to-peer interactions and document all on a digital decentralized ledger
• Low Touch


  • There is minimum human assistance or intervention in selling a product or service
  • No need to keep a big salesforce although companies may focus on improving technology to further lessen human involvement and make the customer experience better
• Razor and Blade


  • One item is sold at a low price or even given for free in order to intensify the sales of a complementary good, such as consumable supplies
  • This model is advisable if the business has a loyal customer base and has the ability to create some sort of lock-in situation with customers
• Consulting


  • Composed of experienced and qualified professionals that offer services based on their line of expertise
  • Most consulting firms charge their clients by the number of hours they have rendered service or a percentage of share once a project is completed
• Social Enterprise


  • Aims to put up a business more for creating a positive change but with profit
  • Profit though is intended to be used for humanitarian works to improve human living conditions
• Alexander Osterwalder described the Business Model Canvas for having nine segments as its building components
• Four Major Parts of the Business Canvas model

  • Infrastructure
  • Offering
  • Customers
  • Finances
• Nine Segments of Business Model Canvas

  • Key Partners
  • Key Activities
  • Key Resources
  • Value Proposition
  • Customer Segment
  • Channels
  • Customer Relationships
  • Cost Structure
  • Revenue Streams
• Key Partners


  • The network of suppliers and partners that may provide the business model more effective
  • Partnering can be for optimizing the use of resources, forming new resource streams or lessening risks on important business decisions
• Four Different Types of Partnerships

  • Strategic Alliances
  • Coopetition
  • Joint-Ventures
  • Buyer-Supplier Relationships
• Key Activities


  • The most essential activities in achieving a company's value proposition and to operate successfully
  • These four blocks considered when coming up with the key activities for the business model: bridge between the value proposition and the customer segment, the entrepreneur has to consider his channels and customer relationships
• Seven Categories of Key Activities

  • Marketing
  • Sales
  • Design
  • Development
  • Operations
  • Distribution
  • Customer Experience
• Key Resources


  • The most important assets required to make a business model work
  • These are the resources that allow enterprise to create and offer a value proposition, reach target market, maintain good relationships with customer segments, gain revues
• Four Categories of Resources

  • Physical
  • Intellectual
  • Human
  • Financial
• Customer Value Proposition


  A business's way of generating value in their product or service when targeting potential customers