As you start up your business you may find people asking you “What is your business model?”. A business model is the approach you will choose to follow to achieve your business goals.
An even simpler way of thinking about it is that a business model is a description of how you will make money.
Working out your business model is an important step for any business. As your business is not fully up and running, much of the information you use to work out your business model will be based on assumptions i.e. you don’t really know at this stage, there is a bit of guesswork involved. But a business model will provide a framework for you to test your assumptions, benchmark against other available information and get feedback from other business owners, potential customers or experts.