Business Models

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Create a Product with Superior Margin

The most profitable industrial product of all time is the Xerox copier. During the 1960s and 1970s, margins on the product were obscene. The copiers were so profitable that Xerox quickly determined that [more…]

Increase Your Profit Margin

If you’re looking for the gold standard of margin innovation, look no further than the Minnesota Mining and Manufacturing Company (3M). Growing from a humble sandpaper manufacturer, 3M is now a Fortune [more…]

Gain Staying Power from Proprietary Margin

Proprietary margin is the ability of your business model to make more money from the same customer than a competitor can make. You can accomplish this by [more…]

Win Big by Creating Proprietary Revenue Streams

A proprietary revenue stream is a revenue source unique to your business model. By creating a proprietary revenue stream, you’ve figured out how to monetize something that your competitors haven’t. As [more…]

Watch Out for Potential Drags on Margin

As you design your business model, focus on your product’s positioning, marketing, and sales process without worrying excessively about competition. You don’t win the race by looking backward. By the same [more…]

How to Assess Your Competition

Any competition drags down margins. Fighting for customers always leads to price/margin cutting. The only way to maintain high margins is to preemptively move to new and better markets before the competition [more…]

Create the Right Product Mix: Gasoline, Cigarettes, and Soda

Having the right product mix can be an important component of your business model. Most businesses have several product or service offerings. Some of these offerings have low gross margin, some have high [more…]

Create a Meaningful Cost Advantage

When a company has a meaningful cost advantage, it has contrived a business model that’s more efficient than the competition. If you’ve ever had to compete with a company that can deliver the same thing [more…]

Economies of Scale

The most time-tested method of creating cost advantage is to create economies of scale. The great companies from the industrial revolution — railroads, steel, oil, banking, and automotive manufacturing [more…]

What Is a Hybrid Corporation?

Efforts to create new corporate entities, which blend the best of the nonprofit and for-profit worlds, arise largely from the corporate social responsibility movement, which has grown substantially during [more…]

Sole Proprietorships

A sole proprietorship automatically exists whenever you engage in business by and for yourself, without partners and without the protection of an LLC, corporation, or limited partnership. Although it sounds [more…]

What Is a General Partnership?

When a sole proprietor takes on one or more partners, a general partnership is born. Because a sole proprietorship by its very nature can be owned by only one person, there is no exception to this rule [more…]

What Is a Limited Partnership?

Think of a limited partnership as a general partnership with a little bit of protection against lawsuits thrown in. Whereas a general partnership doesn’t protect any of the owners against the business’s [more…]

What Is a Limited Liability Partnership (LLP)

A limited liability partnership is like a limited partnership without limited partners. An LLP has only general partners who are held personally responsible for the debts and obligations of the business [more…]

What is a Limited Liability Limited Partnership (LLLP)?

A limited liability limited partnership (try saying that ten times fast!) is sort of a hybrid between a limited partnership and a limited liability partnership. Like a limited partnership, an LLLP has [more…]

Corporations versus Limited Liability Companies

If this is your first venture, you may think of all corporations as massive multinational conglomerates, but that isn’t the case. Corporations have been around for centuries and, until the recent introduction [more…]

S Corporations

All S corporations start out as regular corporations. An S corporation is formed only when a regular corporation elects a special small-business tax status with the IRS. This is done by filing an S Election [more…]

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