These days there are a number of different business models that allow you to get your product to market. As such, it can be wise to explore the options and see if your current model is really the most profitable and effective for your business.
As serial entrepreneur Mat Collett explains, his current business – Solar D – operates multiple different models concurrently in order to maximise revenues.
“We’ve got three business models. One is getting our product on the shelf. The second one is private labelling. We manufacture on behalf of X and put their label on it and give it to them,” explains Mat while speaking on the My Business Podcast.
“The third part is licencing. Basically, we just have an agreement with whoever it is, call it L’Oreal, and say, ‘You can use our technology and every time you sell a tube with our technology, then we’ll take five per cent or 10’, whatever that agreement is.
They’re three very different models, but we’re working on all three of them.
According to Mat, the latter model is the most lucrative option, as the production costs and risks are assumed by a third-party rather than your own business.
“It alleviates a lot of things when you’re talking about licencing because you don’t have to worry about manufacturing, you don’t have to worry about sales, you don’t have to worry about marketing,” he says.
“In theory, you can go live on a boat in the Bahamas.”
Check out more insights from Mat on manufacturing, patent protections and more on the My Business Podcast below:
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- Taking digitisation out of the ‘too hard’ basket for SMEs
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- The insanity of consumer expectations
By Jason Dooris