I am sure you must have heard of the word "Business model" before? It can be regarded as a framework tool that explains the organization of a business venture, and how it would evolve. Business model describes the business values, the business goals, what it can offer to customers of different space, partnership, capital, profit generation, and sustainable revenue.

There are nine building blocks to an effective business model and I will be explaining them one after the other in this post.


![](https://fa42cf2086b5b4ffa910-42905546d373f150b1b6e131d3710cf2.ssl.cf3.rackcdn.com/business-model-et-business-plan.jpg)
[image credit](https://www.thebusinessplanshop.com/blog/en/entry/business_model_vs_business_plan)

**The customer Value proposition,** which is a column that expresses what the business plans to deliver to its customers. It would involve both the product and the service it intends to sell to its audience

**Customer Segment** Dealing with who your customers are, as a business, identifying the type of customers you want to serve is important.

**Channels** is about how the business intend to get its goods or services to its consumers. If a business cannot identify how to reach its consumers, then it is not worth kicking off at all.

**Key Resources** as the name implies are everything needed to get the business up and running. These resources include human, financial, intellectual and physical resource.


**Key Partners** includes the distributors, suppliers, network of people who will get the business running and going.

**Customer Relationship** deals with how to get new customers, how to keep new customers, and how to grow the business revenue with its current customer base.

**Cost Structure** attends to the way the company wants to serve its customers financially. The company can either be a value driven company or a cost driven company. When it is cost driven, it intends to sell low price goods and services to keep customers, when it is a value driven company, it focuses on product and luxury, rather than cost.

**Revenue Stream** of the business, deals with the method at which the business intends to generate revenue and make profit. What does the business intend to generate revenue with, is it Asset sale, Usage fee, Advertising, subscription and so on.

With business model, it is important to know that if it is not well-designed, it is bound to fail.

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