Choosing a business model might sound like a “later” decision, something you figure out after building your product. But the truth is, your business model is the foundation of how your startup will survive, grow, and make money.
If you're in the early stages of validating your idea, you don’t need a 30-page business plan. But you do need a clear answer to one question: “How will this make money and from whom?”
This guide breaks down how to choose the right business model for your startup, even if you’re starting from scratch. We'll also show how GrowthApp makes this easier with growth plans, templates, and micro-courses — all available in the free plan.
Why the Right Business Model Matters
Your business model isn’t just about pricing. It impacts:
What you build (product, service, platform)
Who you serve (audience fit)
How you grow (acquisition & retention strategies)
Where you focus your energy (profit vs scale vs loyalty)
Picking the wrong model can lead to:
Unprofitable operations
Misaligned customer expectations
Product/market mismatch
At GrowthApp, we’ve simplified this process with our “Pricing Strategies and Models” micro-course and Lean Canvas. It helps founders match their idea to real-world, beginner-friendly models without jargon or fluff.
What Is a Business Model?
A business model defines how your startup creates, delivers, and captures value.
In plain English: It’s how you make money while solving a problem.
5 Beginner-Friendly Business Models to Explore
Let’s look at a few proven models that work particularly well for first-time founders, side-hustlers, and solo entrepreneurs.
What I tell founders is not to sweat the business model too much at first. The most important task at first is to build something people want. If you don't do that, it won't matter how clever your business model is. - Paul Graham Y Combinator
1. Subscription Model
Best for: Content creators, SaaS tools, niche communities, digital wellness, education, AI products
Example: “$9/month for access to premium content and expert templates.”
Pros:
Predictable revenue
Easier to forecast growth
Works well with community building
Cons:
Requires consistent value delivery
Higher churn risk if users lose interest
🛠 GrowthApp Tip: Our Sales Forecast Calculator (free template) helps you outline pricing, retention tactics, and value-add ideas before you launch.
2. One-Time Product Sales
Best for: Ecommerce, digital downloads, physical goods, print-on-demand
💡 Example: “$29 for a branded planner or $99 for a mini-course.”
Pros:
Simple and clear for customers
Great for bootstrapping
Easy to test with landing pages
Cons:
Unpredictable revenue
You’ll need constant acquisition
🛠 Try GrowthApp’s Idea Validation Tools to test interest in your one-time offer before investing in product creation.
3. Freemium Model
Best for: Software tools, learning platforms, creator ecosystems
Example: “Free plan with limited features, upgrade to unlock full access.”
Pros:
Low friction to acquire users
Great for building an audience
Cons:
You’ll need to optimise for conversion to paid
Can get expensive to maintain free users
💬 This model inspired GrowthApp’s own free plan which includes one user, a previewable growth plan, 6 micro-courses, and starter tools.
4. Service-Based Model
Best for: Coaches, consultants, freelancers, niche experts
💡 Example: “$750 for a brand audit. $2,500 for a 6-week programme.”
Pros:
High-margin if positioned well
Can start with no upfront cost
Builds trust quickly through 1:1 delivery
Cons:
Limited scalability
Time-for-money trap if not packaged wisely
🎯 GrowthApp includes templates for scoping services, pricing experiments, and turning services into products later (i.e. digital courses or group programmes).
5. Marketplace or Commission Model
Best for: Multi-vendor platforms, aggregators, or two-sided networks
💡 Example: “We take 10% of each booking made on our platform.”
Pros:
Scalable if you find product-market fit
Encourages user-generated content or listings
Cons:
Complex to build and moderate
Requires trust and liquidity on both sides
🛠 Our Lean Canvas Micro-course guides you through mapping both sides of a two-sided model and identifying your early adopters.
How to Pick the Right Model for Your Startup
You don’t need to marry your business model today but you do need to date the right one.
Here are 4 quick questions to guide your decision:
What is your audience most used to?
(e.g. Customers may be more familiar with monthly subscriptions than lifetime deals.)How quickly do you need revenue?
(Services and one-time sales usually deliver faster income than subscriptions.)What are your resources and strengths?
(Are you more comfortable coaching, building tech, creating content, or managing products?)What’s your long-term vision?
(Do you want to scale or keep it lean and flexible?)
👉 Answer these questions using GrowthApp’s Startup Model Canvas Template and validate your thinking using our MVP Builder all included in the paid plan.
What’s Included in GrowthApp’s Free Plan?
You don’t have to build alone. GrowthApp helps you plan, validate, and launch smarter with:
✅ 1 user access
✅ Preview of your personalised growth plan
✅ 6 beginner-friendly short 11min courses including:
Market Positioning
Lean Canvas
How to Launch an MVP
✅ 10 plug-and-play startup templates
✅ Task Manager + Weekly Goal Trackers
No jargon. No overwhelm. Just startup momentum.
Final Thoughts: You Don’t Need to Guess
Picking the right business model isn’t about copying what others do. It’s about aligning your idea, audience, and strengths to something sustainable and adapted to your lifestyle.
Start simple. Test fast. And let the data guide you.
GrowthApp makes this process frictionless from picking the model to testing it and building your first revenue stream.
👉 Start for free today and choose a business model that fits your startup journey.
Author: Guido Picus
Linkedin My book: Maverick Soul
Guido Picus is CEO of GrowthApp.co, helping first-time founders turn ideas into real businesses. He’s a serial entrepreneur with 20+ years of startup and marketing experience, including a successful exit to Deloitte Digital.
