What do ‘models’ give? A model gives a perspective of an actual thing is likely to be. The key aspect here is that it gives an idea about the shape of anything. The most important element here is that it eliminates the situation of ‘blind men and the elephant’.
As per Wikipedia – ‘A business model describes the rationale of how an organization creates, delivers, and captures value, in economic, social, cultural or other contexts. The process of business model construction is part of business strategy.
In theory and practice, the term business model is used for a broad range of informal and formal descriptions to represent core aspects of a business, including purpose, business process, target customers, offerings, strategies, infrastructure, organizational structures, sourcing, trading practices, and operational processes and policies including culture.’
A business model is key to bring clarity within and without. There are multiple business modelling strategies and methods. One of the most famous methods is ‘Business Model Canvas’. The advantage of Business Model Canvas is that it captures the essence of a full blown model in a single frame, enabling a contextual understanding without deep-dive.
I have seen half-filled sheets of this, and a real deep dive and insightful representation in a pitch deck. I spent about an hour on this, before I bet on this startup. Concise clarity is what this puts up.
It takes a lot of revisions to make it a good representation, and may be backed up with a detailed documentation. The whole idea is to bring time value of money when sharing with a prospective investor.
Look forward the efficacy of business model canvas and other forms in the comments section.
~ Ashok Subramanian