So, you want to start your own business. That’s great! But which business model should you choose?
For entrepreneurs, there are several different types of business models available that can have a major impact on how your business operates. Some allow you to work in a traditional brick and mortar environment, others from home and others even on the go! But how exactly do they differ from one another?
So, Just What are the Different Types of Business Out There?
These are the different types of business models that exist:
- Brick and mortar business
- Mobile business
- Home business
It’s very important that entrepreneurs understand how each works in order to determine which business model works best for them. Here’s a quick look at just that!
Brick and Mortar Business
Brick and mortar businesses are the most traditional business model out there. Typically located in malls, retail outlets and standalone buildings, brick and mortar businesses have been commonplace for centuries. Many food and restaurant, retail and business service companies use this model.
The main advantage of the brick and mortar model is the extensive foot traffic that it offers, but it’s important to note that this model is also generally the most capital intensive. It can also be expensive and time-consuming to find the right physical location for the business, which can in many cases make or break the company. As they say: location, location, location!
Are you an entrepreneur on the go? A mobile business is another business model type to consider. The mobile business model is when companies operate out of cars, trucks and vans and seek out clients and customers on the road.
This business model type is for entrepreneurs who don’t like to be cooped up in offices all day. It’s also simple to start and has low startup costs, not to mention a lot of flexibility when it comes to schedule and work location. Home maintenance and personal fitness businesses often operate with this business model type.
There are downsides to consider, however. Remember, mobile businesses don’t benefit from the walk-in foot traffic that brick and mortar businesses in physical locations do. This means that marketing and customer targeting are especially important for a business like this to succeed!
Imagine a commute that’s just from your bedroom to your laptop. Sounds great, right? Home businesses are a trend that have surged in popularity in recent years. Per Forbes , they’ve grown 23% over a decade’s time as of 2016! Many professional service, accounting, consulting and digital marketing businesses use this business model type extensively nowadays.
This business model brings many advantages, some of which include low overhead costs, low startup costs and the comfort of working from your own home. Plus, you don’t have to hunt for any physical locations or negotiate leases! However, this business model type requires great discipline and time management skills, as many distractions abound that can throw off even the most dedicated entrepreneur.
Start an Independent Business from Scratch or Franchise: Which Should You Do?
It’s also important to consider whether you want to start your own independent business from scratch or go into franchising.
Many key factors should be considered when entrepreneurs examine these options. Specifically, they should weigh which ownership model they prefer, what their startup costs budget is, whether they wish to launch their own unique brand or become a part of a larger global brand, what their own business experience is and how much support and training they think they’ll need.
Often entrepreneurs decide to franchise rather start from scratch. Buying a franchise can be a viable alternative to starting a business from scratch, particularly if it is an industry the entrepreneur is inexperienced in. Franchises offer the independence of small business ownership supported by the benefits of a bigger business network. You don’t necessarily need business experience to run a franchise. Franchisors provides the training needed to generate their food and products, and operate their business model. You may find it easier to secure finance for a franchise, and it may cost less to buy a franchise than start a business from scratch of the same type. And franchises often have an established reputation and image, proven management and work practices, access to national advertising and ongoing support.
Which Business Model Works Best for You?
When it comes to which business model to use, it’s important to factor in your lifestyle, time management skills and personal goals. The type of business model you choose may directly impact both the success of your business and personal happiness. Consider them carefully and choose which works best for you!
By Steve Longo and Jim Notaris
 – Forbes