The business models

The best business model for the start of a small business is the direct sales model. It explains how an organization delivers its products and services on its business procedures. These business models include:

Direct sales model

The business model explains how sales of different products give revenue through a chain of salespersons who sell the products directly to customers.  The salespersons are associated with a huge main company and are given the devices to become personal entrepreneurs (Osterwalder, Pigneur & Clark, 2009). 

Licensed business model

The model shows how the business owners buy another organization’s business plans.  Instead of the company making a new product and the distribution chain to deliver the product to the customers, the licensee sells an ownership venture in a business model that has already grown. The license owner has a portion of the revenue that is produces by their sites and the licensor collects the licensing fee and the sales revenue from the licensee (Osterwalder, Pigneur & Clark, 2009).

Freemium business model

For the companies that give individual and business services through the internet, this model is usually common.  Under the model, businesses give away the services with no charge to the customer as a way of developing the foundation for the future business connections.  This models works well for the businesses that are based on the internet as they have less customer acquiring costs and a high future value (Osterwalder, Pigneur & Clark, 2009). 

            The reason as to why I chose the direct sales business model as the best for the start of a small business is because the direct sales are done through presentations and demonstrations of the product or the service during an event at a projection business. The owners of the businesses have a portion of their sales while the company that provides the product maintains their revenue. 

 

 

 

 

 

 

 

 

 

 

 

 

Reference

 Osterwalder, A., Pigneur, Y., & Clark, T. (2009). Business model generation: A handbook for visionaries, game changers, and challengers. Amsterdam: Alexander Osterwalder & Yves Pigneur.