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Entrepreneurship & Startups vocabulary · Ideas & Business Models

Business model

Meaning in entrepreneurship & startups, with examples

/ˈbɪznəs ˌmɑːdl/nounCore term

In entrepreneurship & startups, business model means: The way a company creates value for customers and earns money from it: who pays, what they pay for, how much and how often.

In Turkish: iş modeli, gelir modeli

How it is used

One of the first things investors ask about. You test, validate, change or explain your business model. Common types are subscription, marketplace, freemium, advertising and transaction fees. The Business Model Canvas is a popular one-page tool for describing it.

Example sentences

  1. Our business model is simple: restaurants pay a monthly fee, and diners use the app for free.

  2. The investor liked the team but wasn't convinced by the business model.

Common collocations

  • test a business model
  • subscription business model
  • scalable business model
  • Business Model Canvas
  • value propositionA short, clear statement of the main benefit a product gives its customers and why they should choose it over other options.
  • subscription modelA business model in which customers pay a regular fee, usually monthly or yearly, to keep using a product or service.
  • marketplaceA platform that connects buyers and sellers, or customers and service providers, and usually earns money by taking a fee or commission on each transaction.
  • freemiumA business model in which the basic version of a product is free and customers pay for extra features, more usage or a premium plan.
  • unit economicsThe revenue and costs connected to one unit of the business, such as one customer or one order, which show whether each sale makes or loses money.

More terms: Ideas & Business Models

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