Last modified:Thursday 31 October 2019
A business model is a strategic reference tool which presents the way in which a company intends to ensure its profitability, and describes its added value.
Before starting your business plan (long process), it is a good idea to have previously approved a viable business model (more flexible research process).
In fact, when researching a business model, you need to properly define the essential elements for your company. The process helps you answer key questions such as:
- What is my company's value proposition?
- Who are my customers?
- What is unique about my value proposition and why does my customer prefer them to their current alternatives?
- How will I deliver and capture this value?
Your task consists of formulating hypotheses and comparing them to the reality of the market / to your customers. This will prove or disprove your hypotheses and adjust your global model as a result. After a number of iterations, you will have a "viable" business model, as this is based not only on hypotheses but on verified facts.
In contrast, the development of a business plan requires each point to be developed in detail. As a result, this plan should be based on the most accurate facts available.
If you are still at the "business model" research stage, we recommend you to work with the reference tool in this field, namely the "Business Model Canvas".