Entrepreneurship Final Assignment

BUSINESS IDEA 1

BUSINESS IDEA 5

For the Business Model slide, incorporate the feedback you received from the assignment, Business Models, to describe your selected business model, and explain why you chose it.

Business Idea.

One of the important information that an entrepreneur needs to understand is the types of business models. According to Nielsen & Lund (2014), a sustainable way of conducting business operations is called a business model. There are many types of business models. They include direct sales business model, distribution, freemium business model, premium, monopolistic business model. In the direct sales business model, the entrepreneur sells his/her business items directly to the consumers. This is done away from a fixed retail location. In most cases, sales are made through personal contact arrangements.

The second business model is the monopolistic business model. The entrepreneur is in this type of business model is the sole provider of products in the market (Parenti et al, 2017). The entrepreneur is free to make any adjustments to the prices of his/her products. More so, the entrepreneur enjoys the huge profits alone. In this type of competition, usually, there is no competition from similar firms. The monopolistic type of business model attracts most entrepreneurs. Entry into the market through a monopolistic type of business model depends on the availability of the products to be sold.

Additionally, the third business model includes the freemium business model. In this business model, the entrepreneur uses the internet to conduct business operations. Freemium business model is not a reliable model because it attracts a small number of users. Since the entry into this kind of model is free, there is no barrier in usage; hence the consumer may buy counterfeit goods. In this model, there is a lot of competition between entrepreneurs. Therefore, due to differences in pricing, fewer profits are made through this model. Freemium's business model cannot be reliable in a small business that aims to start without making too many losses.

As earlier mentioned, the main aim of this business idea is to build based on the beauty industry. Since a starting business should avoid making excessive losses, this business will use a direct sales business model. This model will help attract customers for the cosmetic products before settling at a specific location in town. Through this model, the entrepreneur cuts the overhead costs that may be incurred when conducting business operations. More so, it reduces the cost of advertising the products. Therefore, this will be an appropriate business model to apply in this business.

In conclusion, the direct sales business model is very beneficial to the entrepreneur since he/she will interact directly with the customers. Due to this reason, it will be able to learn more about the needs of the consumers. This will help the entrepreneur to offer quality products, thus winning the largest share in the market. This will help in gathering customers when the business is settled at a specific location within the town. Through a direct sales business model, the business is intended to make a lot of profit. Hence, this will help in sustaining the customers through offering quality goods that fulfill their demand.

References

Nielsen, C., & Lund, M. (2014). An introduction to business models. In The basics of business models (pp. 8-20). Ventus.

Parenti, M., Ushchev, P., & Thisse, J. F. (2017). Toward a theory of monopolistic competition. Journal of Economic Theory, 167, 86-115.