2018 is proving to be an amazing year for entrepreneurs and investors. Cryptocurrency has caused millennials, who have made substantial gains trading digital assets, to leave top firms like Deutsche Bank AG in New York, Goldman Sachs Group, Inc. in New York and BlackRock Inc. in London.
These millennials are jumping into the pool of entrepreneurship quickly, which is shedding more light on the need to have an effective and profitable business model.
Out of the many business models that have created multimillions and even billions for entrepreneurs and small business owners, there are three that stand out from the rest. These business models provide proven strategies that aid in business growth.
1 The first business model that can be easily implemented and one that is the top one right now is the market place business model. This model simply requires that you bring sellers to buyers and buyers to sellers. Your company collects a fee because it is the facilitator of each transaction.
The main advantage of the market place business model on a small scale is having zero inventory and, for the most part, very little overhead. We see clearly that companies such as Amazon, Fiverr and Etsy are doing a stellar job at demonstrating just how successful this business model can be.
Amazon generates the majority of its net revenues through online retail product sales and, as of 2017, the company reported an annual income of over $178 billion. Fiverr reported an estimated annual revenue of $13.6 million and Etsy reported annual revenue of over $441 million.
2 The second business model is the infamous subscription model. Netflix has really taken this business model to infinity and beyond! For a small monthly fee, we get to view all of the TV shows and movies that we like 24 hours a day, every day. We are seeing a few companies have huge success with this model because it takes the guesswork out of purchasing. Once we subscribe to something, we know that we are going to receive our product or service for the same flat fee monthly. This is extremely valuable for consumers on the go. Netflix saw annual revenues of over $11.69 billion in 2017.
3 The third business model gives us what we want at the speed that we want it. This is the on-demand model. Uber leads the pack with this. A quick push of a button on our cell phones and we’ve purchased a ride that is more cost effective than calling for and using a cab service. The on, demand model gives consumers convenience and speed. Uber’s gross revenue for 2017 was $37 billion despite the loss of $4.5 billion due to frivolous lawsuits, scandals and the replacement of its chief executive officer.
There are several well-known companies successfully using this model. One company that I’m currently eager to try is Glamsquad. Again, with just a push of a button on your cell phone and you’ve got a beauty team at your door.