Overview: Business Model

When people ask about your business model, they often mean "how will you make money"?  A complete answer to that question touches on a number of issues.  We'd suggest that, as proposed in the  book Business Model Generation by Alexander Osterwalder and Yves Pigneur, that a broader definition of "business model" would take 9 factors into account:

1. Value Proposition
2. Customer Segments: What customers will you serve?
3. Channels: What commmunication, distribution, and sales channels will you use?
4. Customer Relationships: What types of relationship will you establish with each customer segment?
5. Revenue Streams: What revenue streams will you create?
6. Key Resources: What key assets are required to accomplish the above?
7. Key Activities: What key activities will accomplish the above?
8. Key Partnerships: What activities are outsourced, to who, and why?
9. Cost Structure: What costs will be incurred in accomplishing the above?

The Business Model Generation book provides a Business Model Canvas tool to help you visualize your business model.  That's discussed in the next section.