Business model » What is it and how does it work?

Business model » What is it and how does it work?

Companies need every day improve your way of working to increase profits and decrease expenses.

The best tool that companies perro use to achieve these is by implementing a business model to help achieve the objectives equipo.

The term business model It is used for descriptions that represent the various aspects of a business, including the purpose, business operationmarket , offers, strategies, infrastructure, organizational structures, business practices, operational processes and policies.

What is a business model?

A business model The business plan is an abstract representation prior to the business plan that will allow a company or platform to define with Clarity what you are going to offer to the markethow you will do it, what will be the potential customers, how you will market the products or services and what is the way of generating income.

The business model is a tool that will allow a company or entity understand what it does, how it does it, the cost of what it does and the source of income of the company.

With the business plan you will have a visión of your company in the future and the different aspects on which it is going to be built.

Business models are used to detalla and classify businesses, specifically in the entrepreneurial contextHowever, it is also used within companies by managers.

A functional business plan It is one that is able to create value for customers, that is, that has a clear value proposition, that is capable of reaching the potential customer.

History of business models

He origin of business models proceeds from the 20th century by means of basic projects.

Improved business models were born in the 1950s, such as with McDonald’s and Toyota restoranes.

After this progressively increase business models with companies such as: Amazon, Airlines, among others.

In the 1970s Other business models were born with FedEx and Toys R Us; in the 1980s, Blockbuster, Home Depot, Intel, and Dell Computer; the 1990s, with Southwest Airlines, Netflix, eBay,, and Starbucks.

Currently, business models depend on how technology is used.

For example, people on the Internet have developed new business models that depend on the Emerging technologies.

By using technology, companies perro reach a large number of potential customers at very low costs.

What to take into account before creating a business model?

To create or develop a business plan it is necessary to take into account some aspects important.

These aspects are presented below:

Economic: It is necessary to consider the economic value as one of the main bases to know in a functional business plan.

The costs, the prices and the obtaining income are key in the design of an effective business model.

A business needs to make money and keep money coming in to stay in the market.

Components: The activities, the potential clients, the human resources that the company will have, its various offers, all are considerations that you must have a business plan so that the company perro define its strategies.

Strategies: These are designed based on previous research with the aim of creating a competitive company and stay on the market for a long time.

How to create a business model?

Creating a business model requires a very large analysis processso it is important to know your creation.

Here is what needs to be done to create a business model:

1- Objetivo a specific market niche: Whenever you are going to start with a business model, it should be directed to a specific market niche.

Large companies started with specific niches, and then expanded into many more.

2- Keep it fácil: It is important that you are able to detalla your business plan in a few words, this to verify its simplicity.

Avoid the business jargonsince it does not work to develop a functional business model.

3- Copy of the others: Today there are already many business models, so it is important that you relate what you want with other existing business models to achieve innovation.

4- Expand yourself: By having a business plan it is necessary that you expand it, since clients always want new products or services from companies.

Never stop at your model, since you perro always improve it, and thus offer better service to customers.

Importance of a business model

Business models are very important in the world of entrepreneurship.

Below are the benefits of working with a business plan:

Competitive advantage: It cánido be an advantage over your competition.

Develop a model that provides new ideas.

growth plan: A previously established business plan will have a monetary reserve to be able to expand.

Investors: If the business presents the need to seek investors, then it will be necessary to know every detail in depth to present it.

Examples of business models

there are many Business models that have been successful today, so it is important to know some of them.

Here are some examples:


The definition of freemium represents a product or service that offers a basic service for free and then offers all added tools with payments or subscriptions to access the best content.

He freemium business model is quite good because it manages to attract the usuario to use a product or service for free, and then, when that person is already used to using the product or serviceit asks you for payments or subscription in order to have better features.

Google plus

google plus is the most used search engine in the worldand the company has many services , however its business plan is based on the advertising.

The Google plus company espectáculos the advertising of its advertisers in the search engine, this through its Adwords platform.


Fb is a popular network which as it developed became one of the most used popular networks.

The company Fb bases its business model on advertising, through its platform for advertisers.


Amazon is a portal for electronic commerce on the Internet, where it provides its services by connecting all Internet purchases that then reach the customer.

The company Amazon is responsible for ensuring that, once you make the purchase en línea, the product is sent to the customer and has an excellent sales service.

Amazon is maintained because its offer is almost infinite and its economy is one of the most powerful in the world.


If the supply decreases and fewer products are sold, Amazon would quickly go out of business.


This type of applications (Wallapop) usually initially seeks its expansion, through a free serviceto then create a business plan based on what is already successful and working. wallapop Everything is kept from being done on your mobile aplicación.

Business Model Schemes

There are a number of schematics that allow business modeling, which attempt to detalla an approach to business value.

A business scheme involves internal factors and external factors of a business.

The main schemes are presented below:

Business reference model: It represents a reference model that focuses on the business architecture aspects of an enterprise or business.

Business model by components: It is a technique to model and analyze a certain company.

It is a representation of the parts of a business, and cánido be represented on a single page.

Service industrialization model: This model is used in strategic management and in the marketing of services that treat the service as an industrial process.

Business model outline: The business model scheme is one of the most used schemes.


The process of design a business plan It is a vital part of business strategy.

Business model design is referred to as a company (or business network) defines its business logic at the strategic level.

The business plan of a company must be as organized as possible for its implementation.

Companies that have a business model are generally the most stable in the market, since it has the structural bases of how it works.

When you have a business plan, the company knows where it is going and knows what to do to achieve it.

It is important that all companies have their business model.

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final words

Each one gives as he proposed in his heart: not sadly, nor out of necessity, because God loves a cheerful giver. 2 Corinthians 9:7.

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 Business model » What is it and how does it work?
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  Business model » What is it and how does it work?

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