Updated: Jan 11, 2020
Here we will discuss what business models are, why they are important and how to create a holistic framework to understand your business and monitor growth
What is a business model?
A business model conceptual structure supporting the viability of a business. Think of a business model as your roadmap to success that turns your brilliant idea into a profit-making business. You need to sit down and create a business model that tells you holistically how your business will make a profit.
Building your business model
A business model will tell you if your company has sustainable or unsustainable growth.
A well-rounded business model will include your value proposition, market demographics and analysis, expenses of creating your products/services, start-up costs, allocation of start-up and maintenance funds, profit-making strategies, and revenue and expense projections. Most of this information you can find in your business plan. Its start to finish purpose is to explain your product, who your product will best serve, how much it will cost to make your product, how you will get it to your customers, how long it will take you to turn a profit, what is your growth projection for up to 10 years? Your business plan will also help you tailor your operating procedures to support your long term goals. High-level business models will also incorporate predictions like market trends, and be regularly updated to maintain a business competitive in today's market.
Choosing a business model right for your product or service:
There are successful business models proving profitability that you can research and adapt components from.
Examples of traditional business models are: Direct Sales Franchising Advertising
Brick and Mortar Examples of hybrid business models are:
Social Purpose Corporation
Nonprofit with UBIT