What is a business model?

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A business model is considered the foundation of most companies. What is a business model and what elements does it consist of? Why should every company develop one? We will answer these and other questions in the following article.

Business model – index:
What is a business model?
Why is it worth creating a business model?
Elements of a Business Model
Business Model Canvas
Lean Canvas
What is a business model?
A business model for a company is a long-term plan for selling its products or services . This concept varies depending on the approach taken:

financial approach – focuses on how the company will generate profits,
strategic approach – analyzes the company’s development and market position,
operational approach – takes into account the processes that occur within the company and their impact on creating value for customers.
Why is it worth creating a business model?
A company that wants to operate legally must analyze its bolivia whatsapp number database model. It guides the company towards pre-defined goals . Having a model also helps to maximize the use of available resources , which translates into profits.

You can formulate a business model not only at the beginning but also at later stages, as it can evolve as the business grows. This model allows the company to organize all the information about the product. It is also easier to identify potential flaws and shortcomings.

Elements of a Business Model
The basic way to create a business model is to answer four questions:

Who? – Who is the company’s customer? What are their wants and needs?
What? – What product does the company offer? How does this product meet customer needs?
How? – How will the product be delivered to customers?
Why? – Why should customers pay for this product?
Business Model Canvas
Alex Osterwalder developed the Business Model Canvas , which has become an essential tool for defining how a business operates. In addition, it allows you to determine whether the business meets the needs of its customers with its proposal and whether it is profitable. The Business Model Canvas consists of 9 elements:

Customer Segmentation – Customers are the foundation of any business model. To better respond to their needs, a company can group customers into smaller segments based on, for example, common interests or demographic characteristics. Once the groups have been successfully defined, the company must isolate those whose needs it intends to meet.
Value Proposition – This is the element that determines why customers choose a particular company’s offering over a competitor’s product. The value proposition somehow solves buyers’ problems or meets their needs.
Channels – This is another element of the business model. It defines how the brand communicates with customers and communicates the value proposition to them. Channels help define the touchpoints with the audience that influence the final customer experience.
Customer Relationship – This is the type of interaction that occurs between the company and the customer. A company must specify how it wants to build relationships with a particular customer segment and what buyers expect, such as whether they prefer direct contact or more automated contact, etc.
Revenue Sources – This model determines the financial sources generated by the company. The focus should be on determining the right price that the customer will be willing to pay and the most appropriate business model: subscription, one-time payment, subscription, etc. You can also consider additional sources of financing, such as loans, grants, etc.
Key Resources – this is the set of all the infrastructure necessary for the proper functioning of the company's processes. Physical resources (equipment, hardware), intellectual resources (knowledge, patents), human resources and financial resources must be taken into account.
Key Activities – these are the most important activities that the company must perform in order for the model to function properly. The activities performed will vary depending on the nature of the company. When selling a physical product, one must consider its design and manufacturing, while when offering a service, one must know how to fulfill the commitment to the customer.
Key Partners – this is the entire network of partners, suppliers, associates that affect the smooth functioning of the business.
Cost Structure – is a set of all expenses incurred as a result of the activity in a given business model. These can be both fixed and variable costs.