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What is a Business Model?

A business model is a blueprint that describes how your business will generate income. A model will also include the various revenue streams that your company will have. Some of these are cost per customer, the number of repeat customers, and the size of the potential customer base. In addition, it will be essential to note your costs and expenses related to creating value and delivering it.


A subscription model requires a high level of customer acquisition costs. This business model is designed to keep customers for long periods and generate recurring revenues. For example, the Dollar Shave Club is a subscription service. Another model is an aggregator business model, which involves aggregating services and earning commissions.


Ryanair is another airline that successfully used a low-cost business model. The company was on the brink of bankruptcy in the 1990s but re-invented itself to become the Southwest Airlines of Europe. The company's new logic of organization was centred on creating value for stakeholders while simultaneously capturing it.


Depending on the nature of your business, you can use either of the two business models. The first is a "customer-centric" business model, where you can sell goods to customers or create a service that makes money for other companies. Unfortunately, these business models often involve low-profit margins.

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  • Sep 24 2022
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    26 Sep 09:39am

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