Good Business Model Components

good business model

One of the things I noticed when I moved to Florida was that there are a lot of lawn care companies here. There are probably more lawn care companies than lawns. I’m exaggerating now, but I’m telling you, there are thousands. Maybe because the majority of the population is retired and doesn’t lawn their yard themselves.

I started to analyze why this business model attracts so many people and came out with an idea for this post, a list of most of the components that make this a good and attractive business model to follow. It is useful for everyone to look at some of these components to find other solid business models.

Easy to start
It doesn’t require a master degree or a lot of knowledge. Some networking and a little marketing should be enough to get you off the ground.

Low cost to start
To get you started a lawn mower and a vehicle large enough to fit it in or a trailer should be enough to get you going.

Easy to scale
It’s easy to scale:Hiring people is not that difficult because it doesn’t require specialized employees. The training should be fairly quick and getting more lawn mower, trailers and trucks depends on how good the business is doing.

Market
There are many companies because the market here is HUGE and before the crisis it was constantly growing.

Revenue Model
I think the main appeal of this business is the revenue. You have recurring revenue, which is great. During the summer people have to mow their lawns at least four times a month. You get into a contract and you have your fixed income for at least 8 months of the year. There’s also commercial work which should be done all year and also municipalities.

Not everything is pretty though
Some negative aspects  about this business models remain though. The biggest downside might be the huge competition. The same way the market is big here, the competition is ridiculous. Like I said before there are more lawn care businesses than lawns. Also, the change of seasons make it difficult.In Florida the season doesn’t affect this type of work as much as in other places, but still there’s not so much work to do in the winter. At least here in North Florida.

What are the components that I’ll look for in any good business model?

To sum it up, there are some basic components to every great business model that are essential keys to success. And the top 3 in my opinion are: a big market for your service or product, scalability and recurring revenue. One thing I learnt is that there’s nothing better than recurring revenue. Although it doesn’t work in all businesses like that,  I think that it is an advantage to have it in any business model.

Take the WordPress plugin and themes market for example.The market is huge, there’s always room for another company, it’s easy to scale, and there are many ways to earn recurring revenue.

What do you think about it  and which  components of a good business model do you think are a must have?

Picture By Robbie Wagner

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2 responses to “Good Business Model Components”

  1. Jens P. Berget says:

    Hi Ric,

    Awesome picture 🙂

    There are not many lawn care companies in Norway. I actually just know about one in the city where I live. But that’s also because the market is not very big. It’s way too cold here, and the summer is only about 2 months long!

    When it comes to business models, you’re right on. I also believe in a big market, scalability, and recurring revenue. I especially think that recurring revenue is important. Because the hardest part of a business is to constantly keep looking for new customers.

    Jens

    • There’s some funny pics with flickr with kids and their lawn mowers, I thought this one fits better the post 🙂
      Recurring revenue have been the savior of most of the projects that I have build. It helps to get of the ground with some money coming in, enough to get things going for a while.

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