People attending a concert

What are Option Businesses?

Many businesses have different types of transactions that occur within them. An option business is one example. Option businesses allow the customer to purchase something for a certain period of time for a previously set price. The option is the ability for the purchaser to take action but is not necessarily required to. Often times options are used for an action that takes place before another transaction.

The perk of options is the flexibility they present. Not everyone is willing to commit to a transaction and be forced to take action. Option businesses allow the purchaser to decide whether or not they want to do so.

Concert Tickets

Concert tickets are just one of the many examples of an option business. The ticket company sells tickets to customers that enables them to go to the concert. The customers are not required to go to the event but they have the option to do so. Most of the time the purchaser will go to the event unless something more of value comes up.


Retainers are payment agreements between a customer and a company. They can be consultants, lawyers, freelancers, etc. The option business comes in with the transaction. A retainer has a specific amount paid by the customer to the service provider. The service provider usually has a period of time they offer that follows a specific rate. The customer is not required to take action and go to the appointment but has the opportunity to.

Understanding the Option Business Model

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