Entrepreneurs who are considering business formation know having a strong business model is important to securing investors’ funds. A report from ReadWriteWeb.com suggests it may be time for startups to consider moving away from advertising models and shift toward building new businesses on micropayments and subscriptions.The source reports that many businesses are not seeing a return on investment in advertising, but allowing customers to pick and choose features on a micropayment level increases interest in products and services. At least this proved true for ZooLoo, an SEO service provider.
ZooLoo’s director of communications, Aaron Baer, says that lack of ability to find startup funds also played into the implementation of this business model. Baer told ReadWriteWeb.com that “the investors said, ‘You have a solid product, but I want to see you find a better way to package it, and a better way to sell it.'”
Since adding a micropayment system, ZooLoo has seen increased purchases and investments. Entrepreneurs might keep the micropayment and subscriber models in mind as they undergo business formation.
In addition to a promising, well-planned business model, future business owners might consider that business incorporation is usually a good way to show venture capitalists that a new enterprise is a legitimate investment.