Business Models:

A business model provides a rationale for how a business creates, delivers and captures value,
and examines how the business operates, its underlying foundations, and the exchange activities
and financial flows upon which it can be successful.

Business Plan: A business plan is a formal document that typically describes the business and
industry, market strategies, sales potential, and competitive analysis as well as the company's long
term goals and objectives.

A business plan is a formal document, presented to prospective investors, that typically includes
elements such as an executive summary, business description, marketing strategy, and
competitive analysis. A business plan may also include a business model canvas as supplemental
material in an appendix.

Revenue Model: A revenue model outlines the ways in which your company will make money
(e.g. revenue streams). A revenue model focuses on an organization’s revenue streams, e.g., how
a company will make money, whereas a business model also concerns itself with other issues
such as who the product is serving, how it is distributed and promoted, and key partnerships used
in implementing it. In short, a revenue model is just one component of a business model. A
typical business model has multiple. A revenue model is primarily focused on how a company
will make money.

∙ Although there is not a single definition to the term business model and usage varies widely, in
standard business usage a “business model” can denote how costs will be covered as well as
how a business creates and delivers value for itself and its customers, including the ways in
which products are made and distributed.
∙ A business model canvas is a tool to map out and plan the different components to a business
model. The components vary based on the canvas tool you use, with the most widely used one. ∙
Each business model is unique to the company it describes. A typical business model addresses
the desirability, feasibility, and viability of a company, product, or service. ∙ At a bare minimum,
a business model needs to address revenue streams (e.g., a revenue model), a value proposition,
and customer segments. In non-jargon English, this means you want to address what your idea is,
who will use it, why they will use it, and how you will make money off it.

The Osterwalder and Pigneur canvas include revenue stream, customer segments, value
proposition, cost structures, channels, key activities, key partners, key resources, and customer
relationships.

∙ These are in many ways the most critical aspects of starting a new venture (customer segments,
value proposition, channels, and revenue streams).
∙ The most fluid (revenue streams, channels, and value propositions will likely differ for the
differing customer segments and as you iterate and pivot throughout the customer discovery
process could change).
∙ It follows a logical temporal order (there’s no need to focus on the costs of building a company
if you won’t have customers).
⮚ Customer segments: groups of people or organizations that a company plans to achieve
 and maintain
⮚ The value proposition: product or service that provide value for a particular client
⮚ Distribution channels: Companies facing with customers
⮚ Customer communications: all kinds of communications that a company creates and
preserves with a specific customer segments.
⮚ Revenue streams: revenue of a company that comes from each customer segment ⮚ Key
sources: assets needed to provide and deliver the elements mentioned above ⮚ Key activities:
activities involved in providing delivery of the elements mentioned above ⮚ Key partners: a
network of suppliers and partners that supports the implementation of the business model
⮚ The structure of costs: costs incurred in the implementation of a business model.

A business model is completed with the following functions:

⮚ Professional expression of a value proposition (the value created for users through a
proposal based on the technology)
⮚ Identifying a specific market segment and revenue generation mechanisms (e.g. which
technology and for what purpose is useful for users)
⮚ Determining the structure of value chain needed to create and distribute supply and
complementary assets that are necessary to support the position of the company in the
value chain
⮚ Explaining the details of the income mechanism through which in return for supply of
the company, it is paid
⮚ Estimating the cost structure and profit potential (value chain structure and valued
proposition)
⮚ Explaining the company's position in the value network that connects suppliers to
customers (including identifying potential amendments and competitors)
⮚ Formulation of competitive strategies by which the innovative company acquires more
advantages than competitors
∙ Most people are familiar with Business to Consumer models (also referred to as BTC or B2C).
In a Business-to-Consumer model, the business primarily provides services to consumers.
Many of the common media content plays are considered B2C. Newspapers, television
shows, films, and video games are primarily B2C companies.
∙ Many apps that individual users download and then consume content from are B2C. ∙ Because
media companies are typically providing content that is of value to consumers, they look like a
B2C, however, they use the attention of those consumers to sell advertising space to businesses,
effectively operating as a B2B. Business to business to consumer (or B2B2C or BtoBtoC) is
another prominent e commerce model, that combines Business to Business and Business to
Consumer in a complete product or service transaction.
Advertising and subscription still remain the most dominant forms of revenue streams used in
most content business models. Content plays involve the creation and dissemination of content,
such as news or entertainment, which users will want to receive.

∙ Some of the most common forms of revenue streams used in content companies include: ∙
Subscription: When the newspaper industry moved into online content delivery, many
companies initially gave its content away online for free. Within the past decade or so, most
newspaper companies have offered digital-only subscriptions and bundled online delivery along
with the traditional print product.
∙ The trick with a subscription-based business model is to provide continual value. You can’t just
earn a customer one month and lose them the next, you need to keep them satisfied and
paying for your service. Examples of the subscription business model: Netflix, Amazon Prime
∙ Another common subscription model used for content and technology plays is that of a
freemium model. Under a freemium model, access to basic content is free, but users can
choose to subscribe to premium content for a fee that provides improved access (such as an
ad-free experience) or additional services.
∙ The freemium model lets users access the base application or service for “free” before enticing
them to upgrade to a “premium” license to unlock advanced (often necessary) features. ∙ The
online music streaming service Spotify is a classic example of a freemium model, with basic
access to ad-supported music online available for free, with monthly premium subscriptions for a
fee. Zoom and Canva as examples.
∙ Membership is another subscription model. Under a membership model, the content can either
be free or paid, but users who purchase a membership receive perks and bonus materials,
exclusive access to supplemental materials, and so forth.
∙ In many instances, these content companies have been focused on a certain content form
(technology, politics, sports) rather than general interest publications. Musician fan clubs and
sporting teams are classic examples of non-digital content entities that excel at offering
memberships.
Advertising: Advertising networks are still prevalent for digital media content and technology
companies, alongside selling direct advertising on various platforms.

∙ Advertising business models offer free services in exchange for ad views. Consumers get to use
the product for free as much as they want, but the more they use it, the more ads they’ll see
(which is a win-win for businesses).
∙ This business model works perfectly for services that customers might not be willing to pay to
use, but they’d be happy to consume ads. Businesses collect behavioral data about customers
and offer it to advertisers to better reach their target audience.
∙ The better the advertisers do, the more money you make—and the cycle continues. ∙ Native
advertising, the use and sale of microsites dedicated to paid clients, the use of Google AdSense,
are common on web-based content and technology plays.
∙ Examples: Hulu, Instagram, TikTok, Google Search, YouTube
∙ Content and technology companies can sell display advertising, search advertising, video ads,
text/SMS advertising, mobile and digital forms of advertising, and location-based advertising
among other forms, particularly in the mobile space.
∙ Content and technology startups can also develop their own proprietary forms of advertising
content based on the system. For example, Twitter developed and sold promoted tweets and
sponsored ads in its platform.
∙ Sponsorships, particularly used in podcasts, are another form of advertising available for
content and technology plays.

Merchandise: Whether you’re a nascent startup or a more established company, selling

merchandise with your company’s brand, name, logo, and slogans can serve as an additional
revenue stream in addition to serving marketing purposes. T-shirts, mugs, keychains, and hats are
commonly sold merchandise. Google, for example, has a physical store on its main campus that
sells all sorts of Google-branded merchandise. Companies can also sell merchandise online.

Some other forms of e-commerce:

Crowdfunding: Crowdfunding, defined as “an open call, essentially through the Internet, for the
provision of financial resources either in form of donation or in exchange for some form of
reward and/or voting rights in order to support initiatives for specific purposes.” offers a novel
way of funding projects. Crowdfunding involves creators of a project soliciting donations from
funders, or backers, of the project, through an online platform that features the project request.

Events/Conferences: Mainstream media outlets like The New York Times excel at organizing
live events and conferences as an alternative revenue stream, but startups can also do the same.
Media organizations sponsor live events, such as conferences and banquets, and charge a fee to
attend.
Sell Archival Access: Content companies who have created archives of past content can sell
access to the archives to users for a fee. Sell Data and/or Analytic Services: Analytics are usually
more of a B2B play, where the business sells access to user data and analytics to other
companies. In some instances, companies can sell analytic tools and services to users as well.

Drop shipping business model:

∙ The drop shipping business model is when your startup sells products online but doesn’t keep
any physical inventory. This means you don’t have to worry about storing your goods in a
store or warehouse—and you don’t worry about storage fees or expiring products.
∙ Instead, you just sell and market the product, while your third-party dropshipping supplier takes
care of all the inventory, shipping, returns, and customer service. It’s a low-investment way
to do business, especially if you have a small team but want to scale your customer base.

Examples of dropshipping suppliers:

∙ AliExpress

Affiliate Business Model:

∙ With the affiliate business model, you don’t sell or manufacture your own products or services.
∙ Instead, you get paid for recommending other businesses’ goods. When a customer uses your
link (or coupon code) to make a purchase, you get paid a percentage (or commission) of the sale.
∙ Affiliate business models are popular with influencers, bloggers, teachers, and coaches. These
 individuals usually don’t have their own businesses, but they make money by recommending
trusted products and services.

Creating Value: What’s Your USP?

A USP explains how your product is different from and hopefully better than the competition’s.
This is similar to a “unique value proposition, which focuses more on the benefits people receive
from working with you. As a freelance consultant, you are your business, and you’ll need to
figure out the USP or “magic power” that is your service offering. This can be a unique thing that
you do, or the way that you do it. For instance, you might be a journalist with a certificate in
programming; a broadcaster who knows how to do animated explainer videos; a communicator
who specializes in conveying the messaging of clients in a certain industry; or a photographer
who does two-hour turnarounds.