Part one: A beginner’s guide to business models

A business model is a company's plan or framework to ensure it makes profit. The core function of a business model is to define the products or services you will sell, your target market and expected cost of production. A strong business model answers fundamental questions about the problem you’re going to solve (the business opportunity) and how you are going to solve it (your value proposition).

When you work with one of our mentors to define your business model, they’ll help you address questions like - do you understand all current and potential opportunities of the business? Do you have enough resources (cash/talent/equipment and tools) to take your business to the next level? Can you define your value proposition, customers, key partners? They can also help you gain a deeper understanding of what each of these elements means for your business.

Both a business model and a business plan are integral to a profitable business, but they each serve different functions. A business model is the basic foundation that clarifies exactly how you will create revenue, whereas a business plan is the next layer that’s built on top. It will include more detail about how you will bring your business model to life, including timelines and financial projections. The two are very closely linked - and need each other to succeed.