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Chris Bell

What are the Strongest Business Models?



The number of business models for a business to adopt has increased over the past few decades due to the new ways in which businesses are able to deliver their products and services to their customers. But are some of these models stronger than others?

Ultimately, the strongest business model for your business will depend on the specific characteristics of your offering. Adopt the wrong business model and it could go horribly wrong, adopt the right one and the same business could be a major success.

So, let’s take a look at some of the strongest business models available and how to determine if they are the right business model for you to adopt.

B2B

B2B or Business to Business, is a business model which does exactly that. It is when one company sells a product or service which is used directly by another business. This may be consumed at their end or used as a component for their own product which they integrate and sell further down the consumer chain.

Whilst the overall customer base is likely to be more restricted with this business model, the value of the transactions is likely to be significantly higher. It often involves contractual agreements as opposed to one off transactions, which once again can provide security and insight into future profit.

Whether or not this business model is right for you would strongly depend on the offering you provide. For example, this would not be suitable for a hairdresser, would be ideal for a growth strategy consultant and could be chosen or not chosen by a cleaning company depending on their scalability.

B2C

B2C or Business to Consumer is a business model where a company provides a service or product directly to the person who is going to be using it. For example, a clothing store sells clothes directly to those who are going to be wearing them.

Opposite of B2B, the transaction value for this business model tends to be much smaller, but the frequency and volume of transactions can be significantly higher. This is because there are more consumers than there are businesses.

Often overlooked are children and pets within this type of business models. People often consider B2C as the person paying for the option, but it also refers to those who are ‘consuming’ the items. Therefore, a toy store selling dolls to parents is also a B2C company, as if a vets who provides healthcare to animals.

Once again whether or not this is the right business model for you will depend on your offering.

Combining the two

Briefly touched upon above, when choosing a business model, it is not essential for a business to adopt one business model exclusively. You may find that you benefit from adopting B2B and B2C business models simultaneously.

For example, a green grocer may provide a B2C business model selling fresh produce to passersby at a market stall. But may also adopt a B2B business model providing weekly fruit hampers to office blocks and business.

If deciding to go down this route, it is important that you clearly define the structure and processes of how this will be carried out in your company to ensure optimum outcome. This could be having different departments for each, split budgets and dedicated personnel for example.

It would alway be recommended to adopt one business model to start with and expand your business accordingly once you have it growing strong and steady.

Which to choose?

As previously mentioned, the strongest business model for you will depend on your business. Therefore, it is essential to review how your business will fit with each individual model and whether or not it is likely to provide the outcome you desire.