What are the Different Types of Business Models in India?

While the most conventional business models in 2025 include B2B, B2C, C2C and C2B, an understanding of the fundamentals will not only help you choose the correct model but also help you tweak it as per your needs.

A robust business model establishes how your business will create, deliver and capture value. Amid India's growing economic landscape, choosing a relevant model for your business not only provides a roadmap to clear goals and strategies but also enables successful implementation.

Read this blog for a complete explanation of different business models to know in 2025 and understand what works the best for your business.

What is a Business Model?

A business model is the plan or strategy to generate value for its target customers, provide that value in its products or services, and then capture that value in terms of revenue or profit. It describes the operation of a business to make a profit by identifying what, who, and how it makes money.

Business models are significant to new and existing businesses. They assist enterprises in drawing in investment, hiring talent, and inspiring management and employees. The major elements of a business model normally include:

• Value proposition: The special value or advantages that the company gives to the customers.
• Target market: The particular customer groups that the business is targeting.
• Revenue streams: The way the business makes money.
• Cost structure: The costs and expenses of operating the business.
• Critical resources and processes: The critical resources and processes required to provide the value.

Also Read: Latest MSME Classification Explained: Criteria, Structure, Features

Different Types of Business Models

All businesses function inside one of these 6 basic model structures at their most fundamental level:

1. Business-to-Consumer (B2C)

Business-to-Consumer is a business model where businesses provide goods or services to the end-users. The model covers a wide variety of retail models, including online stores, brick-and-mortar stores, and omnichannel strategies. An example of a B2C model is Amazon and Netflix, which sell their products and services directly to consumers.

2. Business-to-Business (B2B)

Under the B2B model, businesses market their products or services to other businesses as opposed to individuals. This model is the basis of wholesale, manufacturing, and service industries in which transactions tend to be in bulk or specialized products. In this model, companies have longer sales cycles and more enduring relationships with customers. An example of B2B is Zoho, which offers software services to other companies.

3. Direct-to-Consumer (DTC)

Although it is closely connected to B2C, the DTC model puts a particular emphasis on the situation when the brands or manufacturers do not use traditional intermediaries to sell their products to consumers. It is usually based on digital platforms, such as proprietary e-commerce sites or brand applications, where companies can develop a more intimate relationship with customers. Mamaearth and BoAt are both examples of DTC business models.

4. Consumer-to-Consumer (C2C)

The C2C business model allows peer-to-peer transactions where people sell products or services to one another. This is usually done by using third-party platforms, which serve as intermediaries. Examples are online marketplaces and classified networks where users are allowed to list and trade goods such as electronics, clothes, and even services.

5. Consumer-to-Business (C2B)

In C2B business models, individuals sell goods, services, or expertise to businesses. It is becoming an important part of the gig economy and of the creative industries, where influencers, freelancers, and content creators earn money by partnering with businesses through this model. The advantage of C2B is that businesses have access to various talent pools and consumer-directed innovative insights.

6. Subscription-based Model

In a subscription-based business model, businesses sell their products or services at a fixed fee that is usually paid monthly or yearly. Customers have unlimited access to services without necessarily owning them. This model usually gives the buyer the option of paying in installments or paying in a lump sum in order to be more flexible.

7. On-Demand Business Model

On-demand business models serve the needs of consumers who believe in instant access and convenience by delivering products or services at the touch of a button. This model is mostly observed in internet-based platforms where the users are linked to suppliers or service providers whenever they are required. Such applications are ride-hailing, food delivery, online travel booking, and freelance marketplaces.

Also Read: 9 Different Types of Business Loan In India

Modern Business Models in 2025

Besides these 7 traditional business models, below are some modern business models that you must know in 2025:

• Software-as-a-Service (SaaS): Software-as-a-Service companies offer cloud-hosted applications that are delivered through subscription instead of conventional licensing.
• Marketplace Model: This model links buyers and sellers, and pockets a small percentage per transaction. Amazon and Airbnb are examples of such businesses.
• Freemium Model: As a consumer, you are free to begin with, and pay only to get extra features in this model. Canva is free to use, but premium templates are charged.
• Franchise Model: Companies do not have to grow everything on their own, but allow other companies to operate their business elsewhere for a fee/commission. This is how McDonald's or Domino's grew so quickly across the global market.
• Licensing Model: In this case, a business licenses its brand or technology to other companies. Disney, for instance, earns billions through the licensing of characters.

How to Choose the Best Business Model?

Below are important tips that you can follow to choose the right one among different types of business models:

• Know Your Target Audience Well: Know the type of customers you are targeting, their likes and dislikes, their pain points, and their buying patterns. It helps you justify demand and make your model suitable for the actual needs of your customers.
• Understand the Problem You Are Solving: Define the targeted problem or need that your business satisfies. This problem must be directly related to your value proposition, which will determine how you design your revenue streams and interactions with customers.
• Evaluate Your Resources and Capabilities: Assess your financial, human and technological resources. Select a model that plays to your strengths and counteracts resource limitations.
• Consider Scalability and Flexibility: Choose models that are capable of expanding with your business and also respond to changes in the market. Scalable models enable you to grow revenue without the same amount of cost growth.
• Align with Your Business Goals: Choose a model that aligns with your business goals, whether it is quick user acquisition, consistent cash flow or better positioning.
• Assess Competitor Strategy: Research the existing industry norms and innovations to identify what works and where you can differentiate.

Also Read: 7 Different Types Of SME Loans Available In India

To Conclude

Every business starts with a plan and then grows with the type of structure it chooses. The business model not only helps you bring your products and services to market but also establishes appeal and generates profits and scales with purpose. Choose the right model for your business, as it also supports long-term profitability. Finance the expansion of your business with a Business Loan from Poonawalla Fincorp with minimal documentation. Simply fulfil the minimum eligibility criteria for a Business Loan and apply online in just a few taps!

Frequently Asked Questions

How many types of business models are there?

Depending on the fundamental types of market interaction, there are primarily 4 different types of business models namely Business-to-Consumer (B2C) model, Business-to-Business (B2B) model, Consumer-to-Consumer (C2C) model and Consumer-to-Business (C2B) model.

What is the most appropriate business model for startups?

There is no one-size-fits-all business model for startups. What is right is based on your product and your customers. A lot of tech startups tend to be subscription or freemium, whereas food or retail companies tend to be direct sales or franchise.

What distinguishes a business plan from a business model?

A business plan outlines the operating procedures, schedules, and financial projections, whereas a business model specifies the framework for value development.

Is it possible to transform the business model of a company later?

Yes, business models change frequently with company development. Netflix changed its focus to streaming as opposed to DVDs, and Amazon changed its focus to a global marketplace as opposed to books.

Why do most companies fail even when they have a good product?

If the company's revenue-generating strategy does not match what customers actually want to pay for, even the most creative and well-designed product will suffer.