What is a Business Model?

One of the main steps in starting a business is developing a business model. The latter is essential to lay out the financial and commercial strategy from a brand strategist of the company how it will generate profits.

So, what is a business model? What is the business model canvas and how to write it? Legal start helps you see things more clearly.

Business model: what definition?

The business model, or economic model, is the core of the business plan. Its purpose is to expose the concept of the future company by explaining how it will develop it to derive benefits from it.

• In the simplest definition of a business plan, this document will describe:
• The offer of goods and/or services proposed.
• The added value that the offer brings to the customer (e.g., advantages over the competition);
• How this offer will be delivered to customers.
• The expected financial return.

Indeed, the business model makes it possible to take into consideration the different matrices allowing the project to be carried out successfully. In any case, the more the business model is innovative, the more the company will have a chance of standing out from its competitors and thus capturing a larger clientele.

How to establish your business model?

Establishing a business model takes time and requires thoroughness.

Drawing up your business plan requires answering some questions regarding the implementation of the project. Among these questions, it is particularly possible to raise: what customer need does the project meet? What are the advantages of the proposed offer compared to the competition? By what do human and material mean to set up this project? Is such a project profitable? What are the levers for long-term growth?

However, to make sure you don’t leave anything out, you can follow a business matrix, usually referred to as the term business model canvas in English.

The business model canvas aims to bring together, visually, the essential points of a successful. The objective is to bring together on one page, all the main elements of the activity of the future company.

Business canvas: how to use it?

The business model canvas is very easy to use. This is a table that helps you to take up the essential elements of your future project. To complete it, it is necessary to be both precise and succinct.

Here are the 9 key points that are generally developed there:

Partners: the idea is to identify the different people and companies on which the activity will rely on. These may be suppliers, certain individual customers, or business partners.

Activities: This involves listing all the goods and/or services offered by the future company. Otherwise, all the tasks are likely to create added value, thus making it possible to generate profits. To have a global vision of the activities, it can be interesting to establish a commercial strategy with a brand consultant.

Resources: this covers all the elements necessary for the delivery of goods and/or services. It can be raw materials, human resources, machinery, software, etc.

Value propositions: this makes it possible to define the aspects that will allow the company to stand out from the offer of its competitors (differential qualities or characteristics).

The customer relationship: this is how the company will communicate about its goods and/or services to reach customers. The customer relationship is one of the components of the communication strategy.

Customer segments: this consists of determining the different customer groups targeted by the products and/or services offered. For this, it is possible to determine “typical customers” as part of the marketing strategy.

Distribution channels: these are how goods and/or services will be delivered to customers. It can for example be a physical point of sale (shop) or a point of sale on the internet (e-shop).

The cost structure: it is necessary to analyze the expenses to know the current expenses while taking into consideration the exceptional expenses. The cost structure is an integral part of the financial strategy or trade advertising.

Income streams: this allows to consider the deadlines as well as the different sources of income.

You wonder how to make a provisional budget, do not hesitate to consult our file.

Feel free to use the business model canvas example below to develop your business model. Be aware, however, that many business model canvases may be more suited to the activity you want to carry out.

Are you launching your project? Do not hesitate to consult our sheet on the ten tips for entrepreneurship.