Chapter 1

What Is a Business Model and Why Does It Matter?

In This Chapter

arrow Examining advanced business planning, also known as business models

arrow Speeding time to profit with a better business model

arrow Discovering why governments, families, churches, and businesses all have a model

arrow Predicting the future of business models

So what is a business model anyway? Is it the way you make money? Yes, in part. Is it competitive advantage? Yes, in part. Is it your business plan? Not really. Simply put, a business model is your profit formula. It’s the method you use to acquire customers, service them, and make money doing so. I like to break down a business model into three primary areas: Offering, monetization, and sustainability. What is your offering? How will you monetize the offering? How will you sustain it?

Your business model creates not only the formula by which you make money, but also the strategic context of the organization.

Simply put, a business model is the framework of rules and “moral” imperatives within which the business operates. It provides the strategic context for both the ...

Get Business Models For Dummies now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.