Example of a Business Model

Crafting a top notch business model is all about your customer.  Your main objective is to deliver value to that customer, and I’ll give you an example of a business model to do this.

Example of a Business Model

Before you even begin to wonder how you’re going to drive revenue with your business model, or how to structure your costs around your revenue; you need to think about your value proposition.

A Value Proposition Example in a Business Model

Value is what you’re giving your customer.  In other words, what are you giving them that makes you sooo special, they want to come to you, and not some other business?  Your value proposition is the key driver of your business model, which is why I started with this example.

Your value proposition can include:

Less Costs, More Value.

Saves Time, Saves Money.

Brand, Relationship.

Cost Structure Example in a Business Model

Now let’s think about your cost structure in your business model.  Is there ways you can deliver that value to your customer without spending a lot of money (these would be your marketing costs).  You can help cut back on marketing costs in your cost structure by utilizing internet distribution channels, partners, or affiliates.

Costs can be structured to be one or both:

Cost Driven (cheap)

Value Driven (high quality)

My own personal example of my preferred cost structure is to use cost driven (which means cheap) ways to sustain my business.  In other words, my ongoing expenses are cheap.  With one time expenses, such as a big video or software development, I like to use value driven (meaning not cheap, but instead focusing on very high quality).

Revenue Steam Example in a Business Model

Now that you’ve figured out your value, and your cost structure, you should have enough information to decide where to generate your revenue streams. Here is a revenue stream example in a business model:

Subscription Fees (generated by subscribers)

Transaction Fees (generated by transactions, sales)

Sponsorships (not generated by customer)

Advertising (not generated by customer)

Free as an Example of a Business Model

As we can see from the above revenue streams, money doesn’t always have to come directly from your customer.  Many business’s revenue streams are generated solely from 3rd parties that target the same market.