Latest posts by Deborah Sweeney
- 3 Dangers of an Unincorporated Business (and How Incorporation Can Resolve These Problems) - March 24, 2021
- Selecting a Side Hustle Based on the Right Business Model for You - February 24, 2021
- LLC or Corporation: Which Entity is Best For My Business? - January 19, 2021
When it comes to choosing the right side hustle, is it possible to pick a gig based off the business model you wish to explore? Absolutely.
A business model is the method in which a business plans to make money. And in order to define your business model, you need to pay attention to the following four factors:
- Differentiation and pricing. How will your business differentiate from competing companies? Consider your products, services, pricing and how you’ll create an exceptional customer experience.
- Marketing and sales. Keeping customers interested in your products and services means creating a marketing and advertising strategy that keeps your business top of mind. This includes creating a company website, establishing social media accounts and relying on word-of-mouth marketing, among other initiatives.
- Production and delivery methods. If your business sells physical products, you’ll need to figure out how these products will be produced and delivered to customers.
- Customer experience and satisfaction. Over time, your business will continue to differentiate itself by the way it meets customer expectations. What do you think customers expect from your business? How will you meet their needs and pain points? And how will you continue to keep meeting the needs of customers as your relationship together evolves and grows stronger?
Now that you understand the factors that define business models, let’s take a look at various side hustles you can start based on different business models:
The subscription business model is quite popular as it stems across a wide variety of industries. Streaming services like Netflix are considered to be under the subscription services business model. This is also true of personalized beauty and apparel companies, like Birchbox and Stitch Fix. A subscription business model makes
money off of consumers who pay a flat monthly fee to subscribe to the company. In return, they receive access to its offerings.
What kinds of side hustles are best suited for a subscription business model?
These may include offerings where you can guarantee recurring revenue from consumers. Let’s say you launch a startup that sells customized care packages. Subscribers would sign up through your subscription and receive a different care package each month.
A subscription business model gives subscribers the chance to pay for premium offerings, as well. Through premium payments, subscribers pay a little more each month but get the chance to customize their subscription. This helps create and nurture long-term customer advocates for the business.
A marketplace business model is fairly easy to sum up. Sellers join marketplace communities to sell items, which they may already own or are creating, to interested buyers. These sellers may also connect with other sellers on the platform.
Which side hustles are ideal for marketplace business models? It all depends on the type of hustle. Some individuals may be eager to sell gently worn items they no longer have a use for, like clothing and accessories. They may join a marketplace like Poshmark or eBay where they can connect with buyers seeking these items for less. Other individuals may be budding entrepreneurs with products they are selling, like handmade jewelry. They may start an account with an e-commerce platform like Shopify or Etsy. This gives entrepreneurs a specific space to build their side hustle and start generating sales through an online storefront.
What does freemium mean? This is a business model in which businesses give away something to the consumer at no cost. However, this is not the same as a free trial. In a freemium model, only basic features may be accessed through the platform. If a user wishes to access more features, he or she can subscribe through a subscription services business model to more advanced features within a freemium model.
Certain types of software platforms often do well in a freemium setting. This includes social media scheduling platforms like Hootsuite and e-newsletter generators like Mailchimp.
Apps are another side hustle that does well with a freemium model. Consider dating apps or gaming apps, which often give users the chance to unlock more profiles and features if they pay a small monthly subscription fee. If you have a particularly unique idea for a software or app that lends itself to a freemium business model, you can offer basic features for free and allow users to buy into more features over time through the platform.
When it comes to starting a side hustle, it’s smart to not only consider the gig itself, but the business model, too. You want to make sure you’re selecting a side hustle that matches your personality and your overall goals.