The business model is the structure that defines how an idea generates value for its customers and how a reward is obtained by doing so. With it, it is possible to identify whether a project is viable, sustainable and scalable.
Knowing what a business model represents and can do for your brand will give you a great tool to improve existing ventures, or generate new, more profitable companies with more solid strategic foundations.
Therefore, in this article, we are going to review the concept of a business model and show you how to use the Canvas model , one of the most popular methodologies for graphically representing your entrepreneurial project.
Let's go
What is a business model?
The business model is the structure phone leads that explains how, through a product or service, an organization creates, delivers and receives value in relationships with its customers, as well as explaining the reward it receives for completing this process.
It is the plan that allows you to organize in a concrete way what your company does to be considered a business, starting from what you give to customers and what you obtain as profit.
In his book Business Model Generation (2010), Swiss business and innovation expert Alexander Osterwalder simplifies it even further: “A business model describes the foundation of how an organization creates, delivers and captures value.”
What is a business model for?
A business model helps you understand and define the strategic elements that make your business work.
Establishing these components makes it easier to analyze them separately or together, in order to better manage them and make the necessary adjustments. This way, you will demonstrate whether your business, in addition to being viable, can be sustained and scaled .
So, a business model serves, among other things, to determine:
The key elements that make your business work.
How these elements interact with each other.
What your customers are like and what you can offer them.
The resources needed to develop your value proposition.
The elements that will allow you to grow and innovate.
How much will it cost and how much will you get from the success of your business.