Types of business models

What are the different types of business models? Most business owners don’t think much about what type of business model to use when they’re first starting up. We tend to just get on with generating our first sales.  

As we become more experienced as entrepreneurs and start thinking about how to grow the business, we then consider what type of business model we’re currently using. And often realise that we need to pivot to a different model.  

Typically, we start off selling services and trading time for money. I call this the “prostitute business model”. It’s the oldest type of business model in the book. From there, you might want to upgrade and change to the recurring income business model for secure cash flow or the project or set fee model. 

The nine types of business model

Over the years, I’ve noticed nine primary types of business models. Each has its own strengths and weaknesses. I’ve written a full guide for each of these business models, so you can decide which is most suitable for the next stage of growing your business and the results you want to achieve.  

My own favourite business model and growth strategy?

Over the years, I’ve gone from selling my time in consulting through to productised services, and now I’m concentrating on productising what I do.

Read why this is my favourite business model and growth strategy

The prostitute business model

Well, it’s probably not what you think. The prostitute business model is the one where you sell an hour of your time for a fee. It's also called the billable hours model. This is one of the models I use myself and it doesn’t involve selling sex.
The Prostitute business model

Recurring income business model

By thinking more in terms of your company using the recurring income business model, you can provide a better service to your clients, increase cash flow, and have predictable revenue. What’s not to like?
Recurring income business model

The curation business model

When a client comes to me looking for a way to pivot their business into something new and more successful, I’m always looking for a successful model to use. The curation business model is a great favourite of mine.
The curation business model

The products business model

We usually talk about the products business model when you’re making (or buying) something which you sell lots of. With products, you can scale your business up and sell hundreds. Dive in here for some tips on this business model.
The products business model

The project business model

This is the model that I use when I’m writing business plans for people. The project business model is where you do a piece of work, and then charge for that piece of work for a set fee. The big prize is that it’s really simple for everybody.
The project business model

Productised services business model

This is a bit different to the traditional divide between products and services. This is where you package up what you do and offer it as the solution to a particular set of client problems. Take a look!
Productised services business model

The membership business model

You probably use lots of things which are software as a service where you pay a monthly fee and you get to use the software. Instead of offering software as a service for a monthly fee, why not offer a membership subscription instead?
The membership business model

The freemium business model

The idea is that you give people a free, easy to sign up to, service with basic functionality or with irritating ads. Should you use the freemium business model? Read on because this article explains a lot more.
The freemium business model

The Charlie’s Angels business model

In this new version of your business, you are Charlie. You’re behind the scenes, maybe bringing in the assignments, but you don’t do the work. Let me tell you why Charlie’s Angels can lead to a new version of your business.
The Charlie’s Angels business model

Here are some next steps for you to think about:

Get a copy of my Sweetspot Pricing book. As well as helping you to work out what you should be charging your customers, it has lots of tips for changing your business model to one where you get more monthly recurring revenue. Get Sweetspot Pricing here…

Think about pivoting your business model to a product-based business. Lots of help in building productised services and your entire product ecosystem.

Set up a call to talk about business mentoring, ongoing help and support for your business. This is how my business mentoring works…

Book a strategy session with Julia Chanteray

Get my best content exclusively by email

I’ll also send you some exclusive resources by email for running a successful business. Let me know how you like them.

Image credits

Charlie’s Angels photo – PictureLux / The Hollywood Archive / Alamy Stock Photo

Thanks to Mike Boudreaux