FORMS OF BUSINESS VALUE

In order to make money in business you must provide value. Economic value takes the following forms:

    • Service: You can provide help or assistance, then charge a fee for the services rendered
    • Subscription: Provide a benefit on an ongoing basis and charge a recurring fee
    • Product: Make a single tangible item or entity, then sell and deliver it for more than what it cost to make it.
    • Shared resource: Create a durable asset that can be used by many people then charge for access
    • Agency: Market and sell and asset or service you don’t own on behalf of a third-party then collect commission.
    • Lease: Acquire an asset then allow another person to use that asset for predefined amount of period in exchange for a fee
    • Resale: Acquire an asset from a whole sale then resell that asset to  a retail buyer at a higher price
    • Loan: Lend a certain amount of money, then collect repayments over a predefined period of time equal to the original loan plus an interest rate
    • Insurance: Take a risk on the risk of some specific bad thing happening to the policy holder in exchange for a predefined series of premiums, then payout claims only when the bad thing actually happens.
    • Capital: Purchase an ownership stake in a business, then collect a corresponding portion of the profit as a one time payout or dividends.