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This Cow Illustrates 8 Business Models (Infographic)

It's not as silly as it sounds.

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Knowing what type of business model to use for your new venture is no easy task -- and even the difference between each of the major models can be difficult too.

Roelof Bos | Getty Images

Related: The 7 Elements of a Strong Business Model

Don't worry though. Funding solutions company Business Backer has found an easy way to explain the difference between using a cow to help describe them. Before you roll your eyes, this metaphor will help you understand everything you should know about business models.

For example, do you know what the direct model is? If not, think of it like this: You have one cow, you sell door to door. It's as simple as that. Still not sold? Try this: If you have one cow, people can buy milk for 50 cents, and people can also buy high , lactose-free, low fat yogurt for $50. Do you know what model this is? It's the loss leader model -- where a product is sold below average market price in order to increase sales for other products with a higher demand.

Related: 7 Actionable Steps to Craft a Lean Business Model

So if you're unsure what model to use for your business, or if you simply want to educate yourself on the differences between major business models, check out Business Backer's infographic below.

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