business model

Related Terms
Description of means and methods a firm employs to earn the revenue projected in its plans. It views the business as a system and answers the question, "How are we going to make money to survive and grow?"

Use 'business model' in a Sentence

Obtaining a business loan can be a difficult task, especially if you have a low credit score, so it is important to have a clear business model to present
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The business model that the restaurant I run uses, is one of high customer volume and turning over the tables as quickly as possible.
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When starting a new business, it is important to have a solid plan for your business model and some examples of other businesses that have succeeded with a similar model.
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Notable Quotable

One Consideration in Building Your Business Model
"One way to build a business is to find a market which is divided into categories in which certain feature subsets are unavailable, and to offer that subset. For example, traditional brokerages was divided into deep discount (inexpensive trades, without advice) and full-service (expensive trades, with advice). Although the markets later blended together, there was an opportunity for a service provider to decouple the two features and sell just the advice without the expensive trades."
- Tom Murcko
How Irrational Behaviors Affect Your Business Model
"When crafting your business plan, don't assume that all market participants will behave rationally. Customers, vendors, partners and competitors sometimes do irrational things. When customers or partners seem to be behaving irrationally, make sure your business model makes sense, the problem may be on your side rather than theirs. When vendors or competitors behave irrationally, it can sometimes hurt you in the short run, but will generally help you in the long run, as long as your business is sufficiently flexible to withstand the temporary irrationality."
- Tom Murcko

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