A company’s business model describes the framework and core aspects of the business. This includes the purpose, offerings, functions, strategies, trading practices, policies and corporate and organizational structures. It is general practice to include the company’s business model in a business plan.
When writing about the business model, the writer should break down his/her conceptual ideas about the business structure into different building blocks. Once the categories have been created, describe the relationship between them. It is a good idea to create a flow chart which describes the various departments and strategies and how they will work together. This helps individuals understand the business model conceptually.
For example, Company A differentiates itself from the competition through customer service. One of Company A’s strategies is to have customer service 24 hours a day through a toll free number. This strategy will be connected to the in-house customer service department. The employees will need to be trained according to the values of the company. These employees will then be connected directly to the target customer. In order to work through this strategy, Company A will need to write company procedures and provide a facility for the customer service.
This example is only one direction a company may choose to take with a single strategy. Companies should have a number of goals and strategies and should decide how they will achieve them. This should be explained through the business model.
Written by Shosh Pincus
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