Choosing a business model
Your business model is how you deliver your business and how it makes money. You could start from scratch, selling services or products, or buy into an existing business or franchise.
Service-based business
You provide skills, expertise or labour to a client and charge them for your time.
Examples of service-based businesses
- Childminder or nanny
- Freelance teacher or tutor
- Gardener or decorator
- Solicitor or accountancy firm
- IT or design consultant
- Online influencer or content creator
- Mechanic
Advantages
- Low start-up costs
- Quick and simple way to start
- Uses your existing skills and contacts
- Low start-up costs
- Quick and simple way to start
- Uses your existing skills and contacts
Disadvantages
- Income can be unpredictable
- Can be hard to scale and grow
- Finding new clients takes time
- Income can be unpredictable
- Can be hard to scale and grow
- Finding new clients takes time
Product-based business
You make, or source, a physical or digital product and sell it to customers for profit.
Examples of product-based businesses
- Food or drink production
- Sportswear manufacturer or retailer
- Furniture or home décor retailer
- Beauty and makeup brand
Advantages
- High profit margins
- Better opportunities to build brand identity
- Easier to scale and grow
- High profit margins
- Better opportunities to build brand identity
- Easier to scale and grow
Disadvantages
- Can be highly competitive
- Inventory, storage and shipping costs
- Importing and exporting materials and products can be confusing at first
- Can be highly competitive
- Inventory, storage and shipping costs
- Importing and exporting materials and products can be confusing at first
Subscription-based business
Clients or customers pay a regular fee for ongoing access to your content, products or services.
Examples of subscription-based businesses
- Food preparation and delivery
- Cloud-based software or storage
- Fitness or other apps
- Specialist content provider
Advantages
- Regular, recurring and predictable income
- Loyal customer base
- Regular, recurring and predictable income
- Loyal customer base
Disadvantages
- Requires ongoing creation and delivery
- Changes need to be managed well to avoid customer churn
- Requires ongoing creation and delivery
- Changes need to be managed well to avoid customer churn
Buying a business or franchise
You take over a business that's already running or set up a branch of an existing, proven brand.
Examples of buying a business
- Buying a shop
- Taking over a service firm being sold as a going concern
- Opening a food franchise
- Setting up a branch of a learning or sports franchise
Advantages
- An existing customer base
- Established systems and processes for running the business
- Franchise management often provides training and support to branches
- An existing customer base
- Established systems and processes for running the business
- Franchise management often provides training and support to branches
Disadvantages
- High upfront costs
- May be less room to innovate or change established ways of working
- Must pay franchise fees
- High upfront costs
- May be less room to innovate or change established ways of working
- Must pay franchise fees
