What is a Business Model?

During the 1990’s a number of examples of new business terminology cane into vogue. Among these was the term Business Model. The usage of this term has become so capricious that the original definitions and intent of these two words has been diminished and confused.

In essence, the Business Model is simply how an enterprise will organize processes to make money. The ability to adjust, change, innovate, learn the lessons of history while looking ahead and streamline systems is the best way to describe this crucial element of business development.

As an entrepreneur, success requires that you identify and perfect a Business Model that will enable your new opportunity to launch, gain traction, grow and keep growing. This is the difference maker for successful and unsuccessful budding entrepreneurs trying to self-market through their own company structure.

Remember that success starts with ideas that initially seem small and grow very big. They didn’t seem particularly fantastic when initially created, but who knew that the transistor, vacuum tube, Coca-Cola, internal combustion engine, laser, or tin can would have such an important place in each of our lives.

Franchising is a Business Model that today we easily understand and recognize. Licensing is another. Kiosk retailing is a style many entrepreneurs utilize to launch their business, gain experience and gauge market acceptance before attempting deeper, broader market penetration.

E-Bay is one of the latest inventors of an innovative market disruptive model. The ability to use the inter-net to construct an online community and establish a huge commercial opportunity for that population is stunning. If E-Bay’s sellers were counted as employers, E-Bay would be among the largest employers in the world. E-Bay takes a small listing fee and sales commission, and caveat emptor reigns. With software, servers and rules, E-Bay has transformed how many people buy, sell and earn a living. The use of a computer and a small supply of saleable product allows anyone the chance to succeed, and earn their daily bread as a “do it my-selfer”.

I encourage entrepreneurs to concentrate on the product or invention that they are attempting to commercialize. The Business Model is only important if they are keen and able to self-market their idea. The innovative product or service idea is more important initially. A better mousetrap or widget can always find a commercial home if properly presented.