‘Businesses within a business’ – Applying different ‘models’ to the same business

Jul 29th, 2019

Business benchmarks


Many businesses are ‘mixes’ of basic revenue models – and in particular, are a mix of ‘retail’ and ‘labour-based’ models.  So to analyse it effectively, you might need to think differently about each part of the business, using a different ‘model’ in the process.


Here are a few examples to prove the point:


  • A newsagency earns revenue by retailing – buying and selling product; it also earns some revenue on a commission basis from its ‘soft gambling’ sales.  A newsagency with a sizeable ‘delivery round’ might even have features in common with a ‘courier/taxi truck’ business.


  • A taxi operator has limited scope to increase its prices, because fares per kilometre are generally set by Government agencies.  So instead, just concentrate on the ‘usage’, ‘efficiency’ and ‘cost control’ issues.


  • A car dealership has a mix of revenue from ‘retailing’ of its new or used cars (big ticket items at comparatively low margin, either sold off the floor, or ordered for a specific customer); from labour and materials in the workshop; from retailing parts (typically holding a few pieces of each item, from a wide range of parts, and backed up with a buy-in service for the rest); and possibly even a commission income stream from finance or insurance packages.


  • A Vet Surgery is a mix of professional time (sometimes packaged as a flat fee for each surgical procedure), with a substantial merchandising component.


  • A jewellery business might be just retail-only, or it might offer labour-based services such as repairs or even jewellery design.


  • And my favourite is a hotel – it could contain up to 6 different ‘businesses’!


  • A retailer selling high margin product with some potential for ‘wastage’ issues to creep in (the bars)


  • A retailer selling low margin, high turnover product (the bottleshop)


  • A restaurant or bistro (relatively high labour content, plus the need to manage a perishable stock range)


  • Accommodation


  • A commission-based business (the PubTab, Keno or similar gaming services)


  • An entertainment venue (high fixed costs, where profit depends on the number of patrons)


Need a competitive edge with your clients, try the Benchmark Suite FREE today!

Are you an Accountant or Business Advisor? Fill out the below form for a FREE TRIAL of the Benchmark Suite.

Recent Articles

Talking Benchmarking

04th February 2021

The Benchmarking Suite is a product designed for accountants, business advisors and management consultants to support their clients and... Read More

The Bottom Line for Professional Services

18th December 2020

It can be difficult for small business owners to determine what success looks like, as there is no ‘one... Read More

The FTE Equilibrium

19th November 2020

           In economics, a state of equilibrium is the balancing effect of supply and demand.[i] Thus, the quantity the producers... Read More