How to Create a Business Model That Works - dummies

How to Create a Business Model That Works

By Steven D. Peterson, Peter E. Jaret, Barbara Findlay Schenck

You will probably be asked about your business model sometime during the business planning process. Before writing your business model description, use the questionnaire to describe how your company makes money. After completing it, ask two more questions:

  • Can I spot additional potential sources of revenue that I may be able to develop in the future?

  • Can I come up with alternative payment plans — such as membership or subscription fees — that would entice new customers, keep customers loyal to my company, increase my revenue stream, or develop recurring streams of revenue down the road?


Use your findings to adjust your financial projections. Your calculations don’t have to be fancy; you just want a good indication of the likely success of the cost and revenue projections that will form the basis of your business model.

Assemble all the elements of your business model, including your business description, value proposition, competitive strategy, target customer, marketing approach, revenue generation approach, revenue and cost structure, and timing and success milestones.

Your business model is the key to your business plan and the formula for your success over the long term. Include a summary of your business model in the Executive Summary of your business plan and early in your Company Overview.