How Businesses Create Value

Uncategorized Oct 01, 2018
How Businesses Create Value

To be successful, your business will have to create something that somebody finds valuable enough to pay for.

The way that businesses create and deliver value is described in terms of business models — basically, how businesses make money.

"A business model describes the rationale of how an organization creates, delivers, and captures value." 

Alexander Osterwalder

There are many different business models. Technology and social movements enable new ones all the time. Still, most businesses operate using one of a relatively few simple, proven approaches:

SERVICES Service businesses help people do or accomplish something. Sometimes, but not always, the provider has specialized skills or knowledge. Examples include: consultants, tutors, tour guides, housekeepers, dog walkers, psychics, and gardeners.

PHYSICAL PRODUCTS Physical products are tangible, physical goods. Some are durable, like books, wallets, or handmade quilts. Others are consumable, like gourmet mushrooms, handmade chocolates, or balloons.

VIRTUAL/DIGITAL PRODUCTS Physical and virtual products, like software, online courses, and downloads, aren’t necessarily that different from physical ones, but considering how a physical product (like smoothies) could be a virtual one (like an e-book of recipes) can help you find new opportunities.

SUBSCRIPTIONS & MEMBERSHIPS Subscriptions and memberships deliver ongoing goods or services for a recurring fee. Examples include magazines, Netflix, and subscription boxes carrying anything from teas of the months and weekly snack packs to quarterly shipments of socks and underwear.

RESELLING Reselling is acting as the “middleman” — buying goods from one place (like a wholesaler) and selling them to another (like a retailer). It’s a key component of standard retail and is also relevant to businesses involved in things like up-cycling and vintage goods.

Not sure what business to start? Check out this FREE GUIDE to generating business ideas!




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