Understanding, Benefits, and 4 Types of Business Models
Corporate Secretary Service Indonesia – Your prototype may be ready to be presented to investors. Still, it is useless if you do not have a business model. How will you explain what your business will do, what product you want to present, and how it can create value for customers and the company? This is where you need it.
A business model refers to a business strategy developed to generate profits. It is an explanation of a company’s plan to provide value to clients at a reasonable cost. The company will determine which products or services will be sold, which markets will be targeted, and what fees may be incurred for the business.
A business model allows companies to experiment, test, and model different ways to structure costs and revenue streams. For companies just starting before Company Registration, exploring potential work plans can help you determine if your business idea is feasible, attract investors, and guide overall management strategy. Even established companies should have this modelling strategy reviewed and updated regularly. Otherwise, they risk missing out on trends and being unprepared for new challenges.
Business Model Components
In its simplest form, a business model can be broken down into three parts. The main components of this are:
- Everything related to the product/service: design, raw materials, manufacturing, labour, etc.
- Everything related to the sale of the product/service: marketing, distribution, delivery, customer service, and sales process.
- Everything related to payments and cash flow: payment methods, pricing strategies, payment times, etc.
Benefits for Business
A solid business model will help potential investors evaluate and understand the company they are interested in. In addition, the report also allows investors to get an overall view of the company’s products, business strategies, and future prospects. In addition, this strategy also provides several benefits for the company, including the following:
- Competitive advantage in the market industry
- A good reputation for the company that encourages investors to continue investing
- Sustainable business profits that lead to new investments
- Financial stability in the company and future expansion
Read Also: Main Benefits of Using Under Name Import Services
Four Types of Business Models
If you are starting a business and Company Registration, you must know the business model that fits your idea. It will help you think creatively about the opportunities and threats that you may face.
1. Business to Business (B2B)
When transactions occur between two companies, this business model is known as a business-to-business model. B2B transactions generally have a longer sales cycle, with higher order values and repeat purchases. In 2020, almost half of B2B transactions were made by millennials. The younger generation is now entering the age of doing business transactions, and online B2B sales are becoming very popular.
2. Business to Consumer (B2C)
The B2C model sells products or services to end customers. The B2C model is the most common business model. Anything a customer buys from an online store as a consumer is part of a B2C transaction. The B2C buying process is much shorter, especially for lower-value products or services. For example, it is much easier for you to buy a pair of shoes than it is to buy a laptop. Because of the shorter sales cycle in marketing, this concept also has lower order values and lower repeat purchases compared to the B2B business model.
3. Consumer to Business (C2B)
The C2B model allows individuals to sell products or services to businesses. In this business model, a site will enable customers to post jobs they want done and bid on those opportunities. Upwork was an early innovator in this regard by hiring freelancers. The competitive advantage of the C2B business model is in pricing products and services. It gives consumers the power to set prices and allows businesses to compete directly to meet their needs. Many types of C2Bs today connect businesses with social media influencers to market their products.
4. Consumer to Consumer (C2C)
This model can also be called an online marketplace that connects consumers to exchange products or services and usually makes money by charging specific fees such as transaction fees or shipping costs. The C2C business model offers a more straightforward buying and searching process. Consumers only need to visit the site or application and find the goods they need.
A strong business model can pave the way for your company’s success. Preparing this strategy by Company Registration is like laying the foundation for your company. It will help you see business ideas objectively and realistically, increasing the chances of your business success.
Whatever the business model, consumers are an essential aspect that will remain and continue to be considered by the company. Don’t worry about developing your business by setting up a company in Indonesia, because Portcorp is here as a solution for your business, also when you need Company Registration. Portcorp is your comprehensive corporate secretary service in Indonesia. With our presence, you can get a dedicated company secretary to support you to what you need. Our company secretaries will track deadlines and file paperwork so your business keeps running smoothly. Contact us now on +6221-5020-8090 for your business succeed in the future!
