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9 Most Profitable Business Models

Most Profitable Businesses

To provide you and your business with the start-up solution, we’ve broken down the nine most profitable models based on the success found under each of them by many of the true titans of the industry today; the strategy you choose could be the deciding factor in finding yourself among their ranks.

  • The Subscription Model
  • The Social, Authentic Business Model
  • The Partner-Centric Business Model
  • The Platform-Based Business Model
  • The Employee-Centric Model
  • The Data-Driven Business Model
  • The Customer Value Model
  • The Constant-Innovation Model
  • The Freemium Model

Read on for more detail about each of these proven profitable business models.

1. The Subscription Model

Companies have used recurring payment plans in exchange for regular access to their products since the invention of the printing press, but in the modern era, this model is truly harnessed to its full potential by such streaming juggernauts as Netflix and Amazon Prime, with many popular alternatives, such as Disney+ and Apple TV, following suit.

Clearly, the demand for film, TV and music is one option your business can capitalise on, but with the precedent of long-running physical delivery services like Hello Fresh and Lootbox, the subscription model can truly supply anything to its customers; it’s up to you to decide what those customers need most.

As technology progresses, another explosion in subscription popularity came with the expansion of the gaming sphere. Many of us grew up watching content creators like Pewdiepie achieve celebrity-level status, but over the years even a mild following has proven lucrative with the aid of monthly donations and paid subscriptions through subsidiary platforms like Patreon, which you can easily attach to your YouTube or Twitch channel.

These fees don’t even have to be daunting to consumers – by now we’re all familiar with the ‘Buy me a coffee!’ link attached to most profiles – and the incentives you can offer are simple, such as early access to content.

It bears mentioning that this is one of the most competitive markets out there, and one of the most popular business models. With the ease of access and low cost of entry – for both you and the consumer base – as well as the potential for the kind of meteoric rises enjoyed by the most successful streamers, your content has to impress and stand out from an increasingly saturated crowd.

2. The Social, Authentic Business Model

We’ve mentioned Pewdiepie, and he, like many others, falls under the banner of ‘Internet Personality.’ This is capitalising on the social, authentic business model, giving your brand the personal and approachable touch needed to connect with your followers.

Another pioneer of this model is author and entrepreneur Gary Vee, AKA Gary Vaynerchuk. His story follows a familiar path to hundreds of well-known figures on social media today: achieving a large following through his daily review content, Vaynerchuk was able to effectively build on this popularity to expand his humble YouTube channel into a household name.

His skills as an online wine critic transferred seamlessly to his co-founding of Resy, a restaurant reservations app, and from this launchpad sprung his creative agency, VaynerMedia, completing Vaynerchuk’s journey from simple content creator to becoming a global media conglomerate. Critical to his initial success, however, was the ability to ensure said content was fresh and interesting.

Even more important than that is authenticity. This is a public-facing business model. You’re the one in front of the camera, and your audience needs to feel like they can connect with the person, the individual, rather than a faceless business. As with the subscription model, providing regular content is also crucial to giving your brand the initial push it needs to start rolling, but the resulting snowball of success you may find is well worth the legwork.

3. The Partner-Centric Business Model

Going it alone is one of the most daunting barriers to entry in the business world. Perhaps the best place to begin is by aiding another business, so that they can foster your business in turn, each partner playing to their strengths to create a more solid foundation for your customers.

See potential partnerships as bonuses for both your customers and your business. Take Salesforce: by managing customer relations alongside a plethora of industry-staple brands like Mailchimp, DocuSign and Fujitsu, the combination of useful services provides those customers with all the tools they need under a single, easy-to-use umbrella.

Reaching out to other companies and putting in the mileage when it comes to initial networking will go a long way in boosting the success of your business under this model. This means offering a worthy and watertight addition to their existing services is paramount, but if your efforts prove fruitful it will secure mutually beneficial relationships that will give you, your partners, and your customers a shoulder to lean on and the breathing room to forge ahead.

4. The Platform-Based Business Model

What do Facebook, Airbnb, and Uber all have in common? They’re all based around a centralised platform, be it social media or apps, and this is the hallmark of the Platform-Based business model. The key here is connections between your users and a ready flow of the goods they can offer one another.

Look at popular shopping platforms like eBay. In exchange for a small fee on every transaction, this platform allows people to sell their items in a regulated, well-monitored environment. It gives customers peace of mind when looking for niche goods, and sellers the platform they need to connect with buyers of everything from electronics to toys.

Rather than you and your business providing the services, you’ll be offering an easy-to-use and streamlined platform on which customers can exchange the product amongst themselves. At the turn of the millennium, the idea of a platform rather than a straightforward transactionary business was a realm of uncertainty.

But the myriad of applications out there prove that by offering customers the wider exposure they need to sell their vintage clothes, rent out properties to holidaymakers or even look after pets, it’s entirely possible to find success under this model.

5. The Employee-Centric Model

If capitalism is a pyramid, the Employee-Centric Model places employees at the base, as the widest-ranging asset and foundation of the entire company. The satisfaction of your workforce and high levels of employee retention can act as the cornerstones of a successful business, and therefore the difference between plentiful customers or empty stores.

How do you ensure the most skilled employees want to remain in employment with your business? The answer is an even simpler question: do they enjoy working for your company? It’s only natural that recruiters worldwide seek out highly versatile candidates with the best resumes, including ones already in employment. You can secure these employees by making your company the most appealing option with a flawless working environment and a range of work perks.

This model is underpinned by this high morale, but also offset by the management of increased costs. Those office dogs won’t pay for themselves! Workers want to see they’re valued, but overspending on cycle to work schemes will torpedo the success of your business. Strike the right balance, and your employees’ eyes won’t wander for a second.

6. The Data-Driven Business Model

Whatever the business, there’s one thing underpinning it all, whether you focus on it or not: data. Be it customer’s tendencies towards certain services, profits, or inventory, calculated management of this resource is the essential strategy under the Data-Driven business model. Google is a textbook example: utilising Google Analytics, search patterns and keyword phrases are measured and acted upon to target ads and promotional results.

Data analytics is a field of its own, and it will take a measured approach both to fully understand the graphs and statistics you’re looking at, and to separate your ideas and expectations from the cold, hard facts presented by the data. Data collection and analysis methods will allow you to tailor your business to your customer’s sensibilities and capitalise on them to maximise efficiency.

Naturally, this analysis must be supported by the necessary data management teams. With a wide range of options available to kickstart a Data-Driven business, choosing how much weight you place on that aspect of your business will decide the budget you should allocate to obtaining and processing customer data to steer your business decisions.

7. The Customer Value Model

Many would argue the only surefire way to ensure a product will be successful is to create a good product. But the business world is no stranger to tectonic industry shifts, and nowadays there are many more factors beyond simple quality to consider, chief among them being customer loyalty.

Loyalty means commitment to a brand despite the draw of competitors’ products, and it is achieved by building an unshakeable image and undeniable appeal. Look at Apple; the only word to describe your average Apple customer is as a fan. That certainly fits; you only need to watch footage of iPhone launches to witness this fervour.

Supported by tailored customer service in their Genius Bars across international Apple retail stores, the company continues to set itself apart from the competition with characteristic elegance. User experience is first and foremost: Apple’s dedicated accessories and apps just work across their catalogue of devices.

Apple – as required of any company hoping to maintain customer loyalty – acts swiftly upon shifting consumer sensibilities and carries its founders’ near-zealous commitment to the most seamless and accessible customer experience.

8. The Constant-Innovation Model

Staying ahead of the competition is one of the most basic guiding principles of commerce. A guaranteed means of achieving this is with the Constant-Innovation model. As its name suggests, this entails technological advancement in your field and maintaining the most innovative and pioneering approach.

A figurehead of this method is Tesla; their electric cars are lightyears ahead of other manufacturers, reaching for the limits of what the humble automobile can achieve with features which sound straight out of science fiction, such as AI autopiloting, smart summon and sentry mode.

This model, perhaps more than any other, will require the diligence of a team with a strong and secure engineering background with a proven ability to innovate and excel.

All that engineering prowess won’t sell itself; with the hyper-specific research and in-depth development going on behind the scenes with the Constant-Innovation model, the layman will need an accessible and exciting advertisement of your product to truly grasp its potential. Promotion and marketing campaigns to match the rapid expansion of your business under this model will make certain that when you shoot for the moon, you won’t miss.

9. The Freemium Model

Finally, we turn to a lesser-documented business model, in no part due to its subtlety: the Freemium model. By offering a free version of your service with fewer features (often within a particular software, like Microsoft Office) you can present the paid option to unlock additional tools in the premium version.

Slack, the messaging application, utilises this model to great effect. As described, the free version is entirely functional, but places small, unobtrusive limits on customers’ capabilities within the app. As mentioned, these don’t have to be conspicuous; simple things such as only keeping message history for thirty days, but offering the option to pay for unlimited storage, are simple ways you can gently encourage your customer to support the service you’re offering.

In fact, the appeal presented to the customer is a main reason this model is the go-to during the inception of many a small business. By providing solid groundwork with your software, customers and even other businesses will incorporate your product into their day-to-day operations, and it will reach the point where they will acknowledge the value of your product. All you have to do is earn their subscription to your premium model.

The fine balance to strike here is one between a free service which doesn’t limit customers too severely, but in turn doesn’t give them unlimited access to all its features, making a premium model unnecessary. On the other hand, the premium model needs to be a worthy upgrade to the basic edition; the necessary budget injection in this area will likely pay off in kind.

Final Thoughts

Keep in mind that this is not an exhaustive list of profitable business models, and the pathways to running a successful business are many and varied. In this article, we barely scratched the surface of combining these models and the blossoming scalability that comes with those mergers.

The most important step is the first, and for you that likely means deciding which model fits your particular set of skills, and which meshes most smoothly with the scope and aims of your business.

Above all, putting in the time to research the model your endeavour should follow will be one of the most important choices you make in running your business.

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