Working with Proven Business Models

Written by Marc on April 20th, 2012

Proven Business Models Like Franchises Can Provide Great Return on Investment.When it comes to launching a business, you have many options including creating something completely new or working with established business systems and models.  What I am talking about here is the “business in a box” style company where the products, market research, and business systems have already been established.  A classic example of this would be a franchise – the idea here is that most of the usual unknowns that go along with starting a new business can be avoided in this type of setup and can give you the opportunity to get a return on your investment in a shorter period of time.  Basically you are buying into a business system that works and should provide you with results.

But when it comes to the online space, there initially seems to be little in the way of established business models you can buy into.  Sure, you could buy an established website and in many cases that can launch you into a position where you have an immediate return on investment.  There are also chances of the business failing as well, but that is the same challenge you would face if you were buying a brick-and-mortar business as well.  Buying these proven properties can quickly add revenue to your business and with the small investment that you need to get started (typically in the 6 to 20 month earnings range), you can recoup your investment quickly.

There are other options available to you as well.  Instead of buying an established business, you could clone an existing one.  This can be done a little easier online, but there are many examples where this can be done in the “real world” as well.  When it comes to cloning a real world business, you will find that unless you know their business intimately, you will have to do a lot of testing, base your projections on some educated guesses, and evaluate the results.  This method of creating a new business can definitely be profitable, but there are also pitfalls as well.  When you consider that a business can appear successful but really be in financial trouble, the thought of cloning a real-world business does pose a lot of risks.

Cloning an online business also has its own share of risks and rewards.  In this case, the financial risks are usually a lot smaller and there are more resources at your fingertips that you can utilize to research your competition.  I will get into this subject in a future post and share my methods of finding, researching and duplicating online businesses.

Working with proven business models not only help you to reach success with your business in a shorter time frame, but they can also reduce the amount of stress that comes with creating a whole new business.  By following a proven model, you should be able to succeed in a shorter period of time, but just like any other business venture, there still is an element of risk.  So, the next time that you are thinking of starting a new business venture, take a look at the franchises that are out there as well as your competition – you might find the inspiration that you need to start your next business.

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2 Responses to “Working with Proven Business Models”

  1. I was a little skeptical at first starting with a franchise, but it worked out for us very well. We bought in to one of the most popular donut shop chains here in Canada and it has gone so well for us that we are looking at our third store. I really don’t think that we could have built something from scratch that would have been as successful.

  2. If you’re going to “clone” an existing online site, you better put a lot of research into how they are monetized, how they’ve acquired their users, how they continue to acquire users, etc. Also know that they probably have a lot more extensive of a backend than you will, so you’re going to need to budget a lot more for development than you probably think.

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