Guest Post: New Economy Business Model Basics

Today, Sachin writes about how the New Economy is forcing businesses to tighten their belts and make smarter, leaner decisions. New business models are subsequently emerging. Are you on board with them?

The New Economy is based on a totally different set of principles to its predecessors. The New Economy businesses are the first post Industrial Revolution business models, and they’re definitely making inroads against their outdated and logistically outmaneuvered competition. All a New Economy business needs for a supply chain is SEO.

New Economy Business Models: Explained

These are the basic principles of the New Economy:

  • The New Economy is based entirely on functions.
  • New Economy employers hire skills, services and products, not people.
  • Administration can be outsourced with a phone call, guaranteeing services, eliminating payroll, HR, and related costs.
  • New Economy businesses are all about core business.
  • "The office" has now been replaced by "The workspace", and the workspace is anywhere on Earth.
  • New Economy people usually have multiple jobs and income streams.
  • Everything but business unit functions is outsourced as much as possible.
  • Outsourcing is done on a strictly business-to-business basis.
  • New Economy businesses don't carry any overheads if they can help it.
  • Online New Economy businesses outperform their conventional counterparts in all areas of cost effectiveness.

You can see why a New Economy business would be using search engine optimization for its supply chain rather than a conventional approach. It’s possible to source services from all over the world, and that’s exactly what they do. This method drastically reduces operating costs. It also provides more capital for business development.

The working mechanics of the New Economy- Free capital, and lots of it

New Economy businesses have enough capital to be able to afford top quality outsources and suppliers when they want them. The real cost efficiencies are built in to New Economy business models, and costs are always under control. Perhaps more importantly, there’s also a working safety net for New Economy businesses. The low overheads and straightforward outsourcing are much less demanding financial commitments, if anything goes wrong with the business.

These are extremely flexible business models, ideal for any business that wants to be able to operate with strong controls over outlays and minimal operating costs. It’s not uncommon for a New Economy business to have multiple operations working on this basis, generating multiple revenue streams across often quite diverse areas of operations.

The New Economy businesses in the marketplace

The result of these business models has been a literal global cloud of micro businesses, punching above their weight in the marketplace. Being able to work in different commercial environments has been a huge advantage, and there are now indications that they’re making huge dents in traditional markets.

Even furniture, white goods and electronics, which are staples of the retail trade, have been affected. This is economically significant, because these are major stock items. New Economy businesses basically use warehouses and online sites to do business, and their profits, free of retail outlet costs, are excellent. They can undercut their competitors with ease.

If you’re looking for working business models with a high survival rate, check out the New Economy businesses before you do anything else. These businesses are literally changing the face of the global economy.