- 5.1.1 -

How to develop a brilliant business model

There are some vital parts of a brilliant business model, and crucial steps to developing them.

1. Endless stock

If you have a digital product that you can sell again and again without ever running out of stock, you have what is known as an “endless-stock inventory.” If you’re in this situation, your profit margin (compared with production costs) is nearly 100%, particularly when you spread the tiny actual costs out over time. This is quite different from most products in earlier times, when fresh inventory had to be produced continually. A business with an endless-stock inventory is highly valued by many investors – as long as the rest of the business is sound and well managed.

2. Subscriptions

Where they are feasible, subscriptions make a great component for your brilliant business model. They give you a good degree of income prediction, along with loyal customers, firmly connected to your company. Such customers are easier to cross-sell and up-sell than others. If you give good attention to adding more subscription customers, while giving your existing subscription holders excellent service, you’re on your way to a really big and steadily-increasing cash flow. A start-up structured this way has an excellent chance of being a big, flourishing success.

3. Big orders, little work

If you can readily sell your service or product at a high price, with little or no work required to provide it, you of course have a great cash generator – and that makes your business attractive.

4. Passive income

Being well paid without having to do anything is a dream for many. Although “something for nothing” never works out, it’s becoming more and more usual to find people setting up successful business models on this sort of mindset. This is especially true for software companies. Just bear in mind that there is usually a lot of up-front work and expense involved in creating a worthwhile product that can go on generating passive income.

Each of the above-mentioned advantages can enable you to build sustainable cash flow. And that makes it possible for you to build your company further, hire the very best people, come up with even more brilliant offerings and expand even more. And more, and more, and more.

The list above could be longer, but the essential message is that you should be focusing on things that generate predictable income, with minimum work and risk going forward. This is what is valuable, even priceless to any online company.

Share this