Entrepreneurship For Dummies, 2nd Edition

Chapter 11

Developing and Testing Your Business Model

IN THIS CHAPTER

Building a traditional business model

Looking at Internet business models

Using several business models with one product or service

Building a successful new business takes a great team, customers, a value proposition, a product or service, resources, and a business model that can create and capture value for the company. In simple terms, you need to find a way to make money. It’s exciting to come up with a new idea for a business, but it’s essential to figure out a way to make money from that idea. Will customers actually pay for what you’re offering? That’s the critical question that must be answered before you invest time and money in trying to launch your venture.

Understanding Business Models

The business model reflects all the strategic decisions and trade-offs entrepreneurs make to generate a profit for their company. The components of the business model begin with the problem/solution, the unique value proposition offered, the unfair advantage, and the customer segments being addressed. These serve as the basis for developing the cost structure and revenue streams the business model will generate. In ...