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Entrepreneurship For Dummies
Developing the Right Business Model
Adapted From: Entrepreneurship For Dummies

Suppose you've come up with a new software program that helps small business owners manage all the activities of their business just like the big companies do with their enterprise management software. You can let the customer select for you the business model that you will use in selling your product:

  • The customer uses the program free of charge, but a small window in the lower left-hand corner of the computer screen displays advertising while the program is running. In other words, in this model, your end user isn't your customer. The companies that display their advertisements are your customers, and you receive your revenues from them.
  • The customer purchases the program for a one-time fee that entitles the customer either to download it from your Web site or request delivery of a standard shrink-wrapped CD version.
  • By continuously come up with new versions and enhancements, you encourage the customer to purchase more from you — another stream of revenue.

Going one step further with this example, let's say you also establish a Web site for users of your program. There, they can find additional information and entertaining features. So how do you make money off that? Well, again, selling space for advertising is one way, but you can also charge a membership fee that puts your users into an elite club, perhaps giving them access to personal application services that you host.


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