A business model plays a vital role in the success of any company, as it explains how that business will earn revenue. For entrepreneurs, a business model aids in acquiring investors and establishing partnerships.
For aspiring entrepreneurs, developing a business model forces you to thoroughly think about the overall business plan. According to an article written for Bloomberg Business Weekly by business professional Gwen C. Edwards, topics an effective business model should address include the type of product or service being offered, how to draw revenue from the product or service, and what advantages and disadvantages the company has compared to others in the same industry.
Many types of business models exist, from the basic pay-for-product model to advertising and e-business methods. Various business models can be blended together in a business plan. For instance, in addition to traditional practices, a retail store might sell advertising on the store website in order to accumulate extra revenue.
Chris Brogan, the president of the media marketing agency New Marketing Labs, advises on his website to be on the lookout for new elements that you can implement into your business model. Methods Brogan recommends for doing this include reading business books and discussing industry-related ideas with other professionals.