A business model is like a game plan for how a company makes money. It explains who your customers are, what value you offer them, and how you deliver that value in a way that earns a profit. Think of it as a recipe for running a successful business.

Let’s say you’re opening a coffee shop. Your business model answers key questions: Who are you serving—busy commuters, remote workers, or students? What makes your coffee shop special—locally roasted beans, fast service, or cozy vibes? How do you make money—selling drinks, offering subscriptions, or charging for Wi-Fi?

Every business, from a local bakery to a tech giant like Netflix, uses a business model. For example, Netflix’s business model is subscription-based. You pay a monthly fee, and in return, get unlimited access to movies and shows. That’s different from a pay-per-movie model, like renting a DVD in the old days.

There are many types of business models:

• Retail (selling products directly to customers)
• Freemium (offering a basic version for free, then charging for premium features)
• Marketplace (connecting buyers and sellers, like eBay or Airbnb)
• Franchise (letting others use your brand and system, like McDonald’s)

A good business model isn’t just about making money today—it’s about creating value that lasts. It needs to evolve as customer needs, technology, and markets change. That’s why companies constantly review and refine their models.

So, if you’re dreaming of starting a business, your first step is to map out your business model. It’s your foundation—and the clearer it is, the stronger your business can grow.