Whether you already have an online business or would like to start one, developing a business model is a must. A business model spells out how you are going to generate revenue from your business.
If you really want to succeed online, then your must determine how you are going to generate revenue and make profit. Otherwise you won’t be in business very long.
According to the small business administration, about 50% of small businesses fail each year, and 95% of small businesses fail within the first 5 years. I’m sure you don’t want to be included in those statistics.
That’s why if you haven’t done it already, you should choose a business model, now. Ask yourself, how will my online business generate revenue?
Here are 3 business models frequently used for online businesses.
1)The Ecommerce Model
Revenue is generated by selling goods or services over the Internet. Examples of goods and services include products such as ebooks or candles and service such as consulting or virtual assistance. Selling products from affiliate programs would also be considered ecommerce. This is not an exhaustive list but it should give you an idea of what ecommerce is.
2) Content-Rich Model
Revenue is generated by selling advertising on your site or in your ezine. Lots of quality content is provided to visitors/subscribers to attract them and to keep them returning to your site or subscribed to your ezine.
The more visitors/subscribers your site or ezine has the more you can charge for advertising. Generally, advertisers pay a certain dollar amount per thousand visitors/subscribers.
3) Membership/Subscription Model
Revenue is generated by charging subscribers for access to your site or certain parts of your site. This model can also be used with ezines. You can charge subscribers to receive your ezine or generate a premium version of your ezine and charge a fee.
These are the 3 basic business models online businesses currently use. Of course these 3 models are not the only models out there. There are others.
Many online businesses use a combination of models. For example, you can develop a content-rich site about gardening and sell advertising space on that site to advertisers who are trying to reach people who are interested in gardening (content- rich model).
You can charge visitors for access to a premium area of your gardening site where you provide more quality content that can’t be accessed without becoming a member (membership/subscription model). You can also sell gardening supplies and books from your site (ecommerce model).
Choose a business model and you might succeed online. Don’t choose a business model and your business may not be around next year or five years from now.
So choose a business model now so you can have success online!
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