Business Model Basics
A business model distills a business concept down to the most essential details:
- Value: What is the product and what makes it valuable to customers?
- Marketing: Who are the company's customers and how will they connect with the product?
- Infrastructure: How does the business plan to design, produce, and deliver the product?
- Finances: How much sales or other revenue can the company generate? How much will it cost to operate the company?
Business models are often a preliminary to writing a formal business plan, which covers the same questions but in more detail. They should be written simply and without technical jargon or nonessential details.
The Business Model Canvas
The Fairfield StartUp competition has adopted the Business Model Canvas (BMC), a framework that organizes the essential questions into nine categories. (See below.) While the BMC is a great tool for organizing your ideas about your business, it also provides a necessary common language for discussing essential business ideas with prospectives recruits, mentors, advisors, and investors.