Given the changing business landscape business leaders are taking a good hard look at their businesses. More than just a general “maximize revenue, flatten expenses” approach, the new economy requires an in-depth reflection of how the business works. Not strictly from a business plan perspective, but an assessment of the business model.
But what exactly does a business model include?
Saul J. Berman provides a useful guideline of what comprises a business model in “Not For Free”:
“A business model encompasses how a firm creates value, how it delivers that value to customers, and how it captures revenue from those customers. Value creation, value delivery, and revenue capture are obviously interlinked.”
Despite the obvious importance of getting the business model right, it isn’t as widely recognized as one might think. There are progressive entrepreneurs such as Steve Blank who are preaching the importance of the business model and whose blog is a great read for those interested in entrepreneurship and business model generation.
The plan, product, and distribution are all important, but entrepreneurs must establish a recurring model of how value is created, how that value is to be delivered, and how the revenue is created – in other words, a business model.
1. Saul J. Berman: Not For Free:
2. Steve Blank: http://steveblank.com