Chapter 3
Creating a Business Model
IN THIS CHAPTER
Examining who needs a business model
Finding out what all business models have in common
Breaking a business model into its simplest form
Perusing popular business models
Considering how competitive advantage fits into your business model
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. You can 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?
Many businesspeople mistakenly believe that a business plan and a business model are one and the same. They’re not. Your business model is the core concept upon which you build your business plan. Therefore, your ...
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