11 Business Models Used By Top Global Brands

One good news that eased the tension amongst Nigerian youth during the #EndSars protest was the acquisition of Paystack by Stripe for a whooping sum of $200 million. Converting it to naira is very scary so let’s not do that.

Paystack is a 5-year old Nigerian payments startup that serves as a middle man between service/product providers and their clients.

An article by Techpoint.Africa shows that over 60,000 businesses in Nigeria and Ghana use this payment platform. Paystack’s business model is something I feel should we should study in order to learn from them.

I saw a tweet by one of the #techtwitter community members about people wanting to start a fintech company upon hearing the success of Paystack. Well, it is normal for people, particularly Nigerians, to want to copy any successful business. That is why a woman will start a snacks business in a small stand by the road and in a few months, several other snacks outlets will emerge to compete with her.

Several business models can be used to develop and kick start your business idea. These models have been used by several businesses and have proven to be profitable. Do you have an existing business idea or are you still thinking of what to do? Take a look at these business models to see how you can fit it, build a profitable business and maybe become the next most talked about and celebrated startup/company.

Peer-to-peer business model

This is a model deployed by Paystack, Airbnb, Uber and Upwork. These companies act as middlemen between two individual parties. They create value for both the demand and supply side of the business relationship and make their money via commissions.

Affiliate marketing business model

Popularly known as referral business, this model is currently putting money into the pockets of people. Companies that use this model make money by featuring, reviewing, and recommending other company’s products or services.  Examples are product review websites that are paid based on sales opportunities that they bring to their vendor companies.

eBay Partner Network, Amazon Associates and ClickBank are some of the companies using this model.

E-Commerce business model

There is a noise about e-commerce that will soon become louder. This is a simple yet most promising business model as it allows buyers and sellers to connect and transact using an online platform otherwise called online shop. Small businesses are also leveraging on this model to make more sales (SalesCabal is doing this for SMEs).

It can be deployed in catergories such as Business to Business (B2B), Business to Customer(B2C), Customer to Customer (C2C), and Customer to Business (C2B).

Jumia, Alibaba, eBay, Amazon etc are using this model.

Blockchain-based business model

Blockchain is believed to be the future of technology. It has changed the entire landscape of transactions, involving decentralized network system on a global scale.
Many cryptocurrencies like Bitcoin and Ethereum use this business model.

Consulting business model

You do not need a product to start a business or a company. Therefore, if you are an expert in any subject, you can offer consulting services to brands. This is one business model that can generate revenue for you to even start another business. You can decide to charge on an hourly basis or certain percentage on completion of the project. McKinsey and Boston Consulting Group are multi-billion-dollar businesses that are based on this model.

Online educational business model

Covid-19 pandemic has made people appreciate online education more than ever. This method can take over the relevance of the four walls of the physical classrooms. If you have a skill that you can teach, you can use this business model to give out educational resources to teachers and students.

Khan Academy, FutureLearn, LinkedIn learning, Coursera, Udemy and edX are some of the common learning platforms that are using this model.

Freemium/Premium business model

Evernote, Canva, Zoom, Mailchimp and some other software have made life easy for us. They allow the use of their software for free although users have limited access to some of the features. To unlock these features, users are expected to pay. This is where the Premium Business Model comes in.

The Freemium Business Model is a good way to encourage customers to use a software or application. 

Subscription business model

Did you pay to watch Citation? King of Boys? And some Netflix Series? Maybe you get to download them somewhere else but some people actually pay to see movies on Netflix. Netflix uses a Subscription Business Model which allows the customer to watch movies by paying a fixed amount every month or year depending on the customer’s preferred and chosen plan. In this type of model, the company has to provide enough value to its customer, so they can visit the website over and over again. 

Some online educational sites also run on this model.
This model is useful for content or service-based websites. 

One-for-one business model

The one-for-one business model can be referred to as a social entrepreneurship business model. It combines both profit and not-for-profit services. An example is TOMS shoes. The best example is TOMS Shoes that provides shoes to underprivileged children globally for every pair of shoes sold.

Annually, HultPrize is an annual, year-long competition that crowd-sources ideas from MBA and college students after challenging them to solve a pressing social issue around topics such as food security, water access, energy, and education. If you are looking to participating. You might want to adopt this model and/or combine it with other business models.

The sustainability of business built using a one-for-one business model is usually questioned as it is not majorly profit-oriented.

Razor and blade business model

You buy a printer once but you keep buying a new ink cartridge (an ongoing expenses as a user). This is a model, that sells an item (Razor) at a low price while another associated item (blade) is sold at a premium price. It allows for continuous generation of revenue.

User-generated content business model

Content creators now find a place to display their art via videos, pictures and writing because of this particular model. This model is fast-growing and creates value for the content creators, platforms and users. Content is compiled and sold to companies who want to exploit consumers’ ideas and get content to promote their brands as well. YouTube, Quora, Reddit are few platforms using this model.

There are over 50 business models but these 11 have been carefully sourced out to give you a nudge that you can explore several business models to build your business.

Did you find the post helpful? Feel free to express yourself in the comment box.

Launching Your Business – 5 Things to Know

Are you an aspiring entrepreneur or an existing one?

Have you launched your business or planning to? Do you have a hobby and want to make a business out of it? It doesn’t matter the phase or stage you are currently, if you wish to get ahead in some ways then I think what you are about to read will be helpful.

Launching your business is beyond getting your logo done, sending broadcast messages, doing countdown, getting designs and constant use of the social media platforms. All these actions are good and useful to put your brands out there but there are basic things you need to put in place.

 1. Your mindset is key

Your mindset about your business is important. Negative thoughts and energy can hold you back from taking that idea from the ideation stage to the doing stage. If you started your business from the standpoint of a hobby, stop viewing it as a hobby. Start seeing it and treating it as a business. Choose to stay positive. Get rid of negative energy and thoughts so you can have more space for new and better things. 

It is possible to have negative people around you whose negative energies rub on you. They say and do things to lower your energy or excitement about the plans for your business. They do not give you constructive criticism or opinions rather they discredit your plans. You have to identify these kinds of people. Spend less time with them. Stick to people who motivate you. Before and after launching business, you need your energy level to be high to start and remain in business.

2. Know your why

Your why is the reason you are launching the business, what makes you do what you do, the problem you identified and are trying to solve with your business and the goals you have set to achieve. Identifying the reason why you started or why you are about to start your business saves you from distraction or demotivation. Your why makes you stay focused and channel your energy towards accomplishing your goal even in the face of rejection. 

When rejection comes, the knowledge of why you are in business helps you accept it, learn the lessons from the rejection and restrategize. 

It is your business so you have to sit down, make plans, stick to it, evaluate the plans and if there be need for a change in plan, review it and effect it. 

3. Stay focused

Sometimes, it is possible to get distracted.  Distractions can come from happenings in your personal life or from other competitors. While it is good to have an idea about what your competitors are doing, do not drown it. You are only expected to learn and get ideas on how to stay ahead of them. 

Staying focused is good for you as an entrepreneur. Identify your goals and plan out everything you will need to achieve those goals. Create a schedule and stick it. Manage your time well. Time management is key for an entrepreneur. You can not afford to live life as it comes as an entrepreneur. Plan ahead. Proactivity will help you much more than being reactive. As much as possible, be focused on your business. That is why knowing your why is important.

4. Start doing productive activities 

It is better to stay from unproductive activities and let time management become part of you. Identify your daily activities and assign a time frame to each activity. At the start of your business, you tend to do everything from procurement of inputs to production to packaging to marketing to managing your social media handles to attending to customers to delivering the goods and even handling your finances. To be effective at this before you expand and have people to help you with your processes, you need a schedule to stick to. Manage your energy and channel it into productive activities in the interest of your business. Make a ‘To-do list’ and a ‘To-stop list’. Anything that does not yield results should be on your ‘To-stop list’.  

Business owners are disciplined people so you need to be disciplined. Set a schedule for your productive activities, put them on your calendar, set alarms. Alarms have a great way to remind you of your task per time. Take advantage of the several productive tools technology has offered such as Google calendar, Google Keep, Evernote, Todoist and similar apps.

5.  Learn to ask for help

You can wear a million hats but you can not do it alone. Ask for help from your friends and family members when needed. If you can afford it, outsource some part of your duties to those you can trust to deliver the best. 

Tell your friends and family to help you tell the people in their network about what you do. Learn to ask for help and accept support.