Whether you’re starting a seasonal business or a year-round business, you have many decisions to make before your grand opening. One of the most important aspects of a business is its business model. There are four main types of business models.

Manufacturer

As the name implies, a manufacturer creates and sells goods. This doesn’t mean you have to build an industrial factory for your seasonal business to be defined as a manufacturer. You could also be considered a manufacturer if you knit scarves or build wooden stepping stools. Manufacturers can sell their goods directly to consumers, or they can use another vendor to make money from what they create.

Distributor

When you are a distributor, you purchase goods from a manufacturer and in turn sell those goods to either retail shops or directly to consumers. For example, people who buy cosmetics from companies that don’t have retail stores and sell them to their clients could qualify as distributors.

Retailer

A retailer buys products and sells those products to the public. If you set up a little sunglasses kiosk at the local mall, you would be a retailer. You could also be considered a retailer if you set up an online shop.

Franchise

With a franchise, you would have the power of a well-known company behind you. Franchises follow the business model of the parent company, so they can be manufacturers, distributors, or retailers.

Choosing a Business Model

The above-listed types of business models cover only the basics. In reality, a business model is a detailed plan that sets out how you plan to make money. Some companies, such as rideshare businesses, have unique business models that inspire other companies to follow in their footsteps. With your seasonal business, you probably aren’t looking to start a business revolution, but you should still give serious thought to your business model.

Keep in mind the difference between a business model and a business plan. A business model is an overreaching strategy, a principle that impacts how you conduct business on a day-to-day business. A business plan, however, is a malleable, detail-rich document that gets into the nitty gritty of how you intend to accomplish things like marketing and attracting and retaining customers.

If your seasonal business is your first entrepreneurial endeavor, you may want to talk to experienced businesspeople to learn more about business models and business plans. Once you understand the basics, you’ll be in a position to make sound decisions that set your business up for success.