I personally think business models are a pretty important aspect of building your business plan because your business model is, essentially, a blueprint for how you'll run your business. Unfortunately, this was one aspect of business that we completely skipped during my time in college (much like the vision boards I wrote about last week.)
When it came to business types in college, we went over business plans under the assumption that everyone would be opening a barn of some form, and going by the business model methods below, all barns basically fall under the same category.
That said, all equine businesses most certainly don't, which is why I made sure to discuss them during this series.
In their book The Smarter Startup, Neal Cabage and Sonya Zhang defined a new framework called business model archetypes, of which there are seven.
You’ve got your three major archetypes, the Product, Service, and Trade, and every business falls into at least one of these categories no matter what you do. Some of them fall very neatly into an archetype while others… not so much.
For those less neat businesses, there are three secondary archetypes which combine two of the primary archetypes in some way: Marketplace, Subscription, and Brokerage.
Additionally, there is a seventh archetype (for those overachieving business personalities) that combines all three major archetypes called the Ecosystem.
Not sure which archetype you are?
Read through this article on business model personalities, think about what defines each one, and how you plan to do business. For bonus points, you can check out Neal and Sonya's book here, and download further resources that go along with their book and concepts. (I also recommend reading the book. There's a lot more to it than just business model personalities and archetypes. [FYI, that's totally not an affiliate link. I just love recommending books!])
Second up, I want to briefly discuss the 15 business models, which you can study more in-depth on Digital Business Model Guru.
As I mentioned earlier, selecting a business model is the part where you settle on a strategy for running your business. Your business model works like your play book in that it gives you not only somewhere to start, but a strategy to work with as you run your business.
Digital Business Model Guru lists 15 business models in total on their site, each having its own pros and cons. As you read through the list, compare how you plan to operate in your own business with the listed definitions for each business model.
If you find that you’re gravitating toward multiple business models, that’s fine! Mixing and matching is totally a thing in fashion (or so I’m told?), so why not in business, too?
Now that you’ve settled on a business archetype and a business model, it’s time to get detailed by filling out your business model canvas.
But don’t worry, this is the fun part!
There are a million examples on Pinterest using real-world companies like Starbucks, Airbnb, Groupon, Netflix, Amazon, and more, so if you find yourself stuck on a question, hit up Pinterest.
(Which reminds me, are you following Writing Dressage on Pinterest yet?)
Take all the time you need and if you have any questions, comments, or what have you, you can reach me best on Twitter or in the comments.
Next week, it’s time to get to work on constructing your business plan. Trust me, you’ll be glad you got your vision board and business model canvas all set up for this one.
Read the rest of the posts in the series:
- Building Your Business Plan: Vision Boards
- Building Your Business Plan: Business Models (that's this one!)
- Building Your Business Plan: Business Plan Must-Haves
- Building Your Business Plan: Business Plan Additions
- Building Your Business Plan: Keeping It Legal