13 Your business model: The beating heart of your business

 

This chapter covers

  • What is a business model? How do you determine what yours should be?
  • Who is your real customer: consumer or business?
  • What are examples of standard business models to provide you guidance in nailing yours down?

The business model is the heart of your business and of your business plan. It’s tempting to think, “I have a product, and I just go sell it, right?” Well, how are you going to sell it, and how do you get paid? That’s the critical question a business model answers. To determine the right business model for your company, you will carefully consider all the possible business models that might make sense and choose the right one for your product and how you want to get it to customers. You must also be able to clearly articulate why it is the right one to achieve the goals you have set out for your company.

Definition  A business model is how a company sells and delivers its product and generates revenues from customers.

A business model explains . . .
  • How you will make money
  • How your customers will pay you
  • How you will deliver your products and services to your customer

13.1 Business-to-consumer

13.2 Business-to-business and its variants

13.3 Software-as-a-service (SaaS)

13.3.1 GeoTrust

13.4 B2B services

13.4.1 Open Environment and Borland

13.5 Internet advertising

13.6 How your business model affects hiring

13.7 The moral of this anecdote