Sustainable Startup: 4 Lucrative Business Models to Consider

Written by Kara Masterson

When you’re looking to start a business that will last, the business model you choose plays a key role, and it needs to be a good fit for the type of business you have. The right business model can make your idea far more profitable, but the wrong business model will leave you destined for failure. If you have some ideas and you’re trying to decide on a business model, here are four potentially lucrative options that you should consider.


The freemium business model is most common with online services, apps and digital products. You offer the basic version of your product free of charge, but then charge customers if they want the more advanced version with superior features. The many music apps, such as Spotify and Pandora, are excellent examples of this. You can use them without paying a dime, but if you want to play songs with no ads and download anything to your phone, then you need to pay.

This business model works well because you get your foot in the door with the free version of your product. It’s much easier to convince customers to give you a try when they don’t need to spend any money. Once they see what you have to offer, they’ll be more likely to make a purchase.


The hardest time to make a sale is when you haven’t sold the customer anything before. That’s why it’s smart to make the most out of every sale, and the subscription business model helps you do that. Instead of a sale being a one-time transaction, your customers sign up to pay you at regular intervals in return for a product or service that you continually provide.

This could be a physical product, such as clothing sent to customers weekly. Or it could be a service—think Netflix and its streaming video content.

Direct Sales

As the name suggests, the direct sales business model involves going directly to the customer. It doesn’t need to be you doing this, and in fact, most direct sales businesses have sales reps who make contact with customers and pitch the products for a commission.

Businesses that have used the direct sales model include Nu Skin and Rodan and Fields. You benefit from low overhead costs with this type of business, as you don’t need to rent a location for a store. Because your sales reps meet with customers directly, they can provide individual attention, which means your products will make more of an impression. They can also give you any customer feedback, and that may include some valuable insights.


The franchise business model certainly takes some time to set up, but it can be a fantastic way to grow your brand. Once you’ve established at least one successful business location, you allow other people to get in on the action and become franchisees. They open their own businesses under your brand name in new locations, taking care of the startup and operating costs.

Franchisees benefit by getting to open a business under your guidance and brand name, while you benefit by expanding your business without footing the bill for those expansion costs. Some of the largest brands in the world have grown through franchising, including McDonald’s, 7-Eleven and Ace Hardware.

These are just a few of the lucrative business models available to you. See if any of them would be a natural fit for any business ideas you have, and remember that you can always adjust these models as necessary.

Kara Masterson is a freelance writer from Utah. She enjoys Tennis and spending time with her family.