How to create an irresistible Business Model: A Step-by-Step Guide

A well-crafted business model is the blueprint for a successful enterprise. It outlines how a company creates, delivers, and captures value, making it a fundamental component of a business strategy. In this guide, we will take you through creating a detailed business model that will be the backbone of your business’s success. 

What is a business model? 

The concept of a business model came about when personal computers and spreadsheets became popular. According to John Magretta, an editor at Harvard Business Review, a business model is used to see how different decisions might affect the bottom line of a business. A new business model could be based on a different way to produce or sell something. For example, discount retailers like Kmart and Walmart applied a supermarket strategy to the market by introducing a discount retail model known as “half sales”.

A business model outlines how your business will make money by providing value through its products and services.

Business Model vs. Strategy

A strategy “Is how you are planning on bringing your business to the market and how you plan on executing it”, while a Business Model describes the rationale for how a business or venture will accomplish, like:

Key Components of a Business Model

1) Creating: Solving problems and providing long-lasting solutions through products and services. 

2) Delivering Value: This includes all the activities involved in delivering to customers, such as marketing and distribution channels. 

3) Capturing Value: This involves selling a product at a price people are willing to pay while considering costs. 

Types of Business Models: 


These businesses offer services and products directly to consumers and plan to expand to other locations. They make deals with investors (franchisees) to help finance the business in the new location. In return, the franchisor receives a percentage of earnings from the franchisee. Examples include restaurants like McDonald’s and Domino’s Pizza. 

E-commerce Retail: 

It is the most common model in which people buy directly from manufacturers or distributors in large quantities and sell to consumers. Examples include popular supermarkets like ShopRite, Best Buy, Target, and Walmart. 


This is the first entity in the supply chain to outsource raw materials and produce finished products. They sell to distributors, retailers or directly to customers. Examples include Sumal Foods, Toyota Company, and Electrical Works. 


These businesses offer services and labour to the public and can charge hourly, weekly, monthly, or a fixed rate. Examples include salons and photo studio rentals, almost daily services you patronise. 


These are common for digital products, where you pay a certain amount to use their services for a fixed time. Examples include Netflix, Prime Video, and Spotify Music. 

Freemium to Premium: 

These offer free access to their products or services, and if users want better features, they have to pay. Examples include LinkedIn and Canva Pro. The owners strategically convince users to convert to premium by showing them the benefits, discount offers, or free options for a limited time. 

Discount Model: 

This is when you offer products or services to your first-time customers at a discounted price. Example: Buy now and get 5% off the sales price. 


This is when you package multiple products or services together and sell them to customers. This way, customers experience other business products or services, first-time products, and make preferences. Some businesses offer discounts during special seasons. Examples include December Sales Spa and Facial Cleaning and AT&T. 

Affiliate Marketing: 

This is a business model in which you pay certain entities to advertise your products or services in return for compensation. Some brands give influencers a personalised link to help promote their products, and they get a percentage of sales from customers who use the link. Examples include social media influencers and product links. 


This is when customers pay for goods or services immediately at the point of purchase. 


This business model connects buyers and sellers without selling the goods themselves. The company makes money by taking a percentage from the deal sales. An example is real Estate. It is important to note that some companies use multiple business models simultaneously. For instance, the Canva Application has a Free version and a Subscription-Based model. 

Book Resources: 

Business Model Steps to create an irresistible brand: 

Step 1: Understand Your Business

Before diving into creating your business model, it’s essential to have a deep understanding of your business. 

  • What problem will your business plan to solve? 
  • Who are your customers? 
  • What are your core values and goals? 
  • What’s the market you are trying to penetrate like? 
  • Who is already serving your customers the services or products you plan to use? 

Answering questions like this will help you gain clarity and guide your business model development.

Step 2: Identify Your Customer Segments

To create an effective business model, you must know your target audience. Identify your customer segments based on demographics, preferences, and needs. You want to properly understudy them according to their peculiarities, interests and dislikes. 

Tailoring your business model to specific customer groups allows for more effective marketing and resource allocation. For instance, some of your Target Audience might want Free and Premium when they have cash. At the same time, some would never select the free version, so you have to segment your target audience according to their preferences, which will help your marketing efforts. 

Step 3: Define Your Value Proposition

Your value proposition is what sets you apart from your competitors. It explains why customers should choose your product or service over others. To create a business model based on your value proposition, take into account the unique benefits you offer, such as quality, quantity, speed, convenience, cost-effectiveness, or innovation. Make a list of all your products and specify what makes you different from others.


How to Write a Great Value Proposition [7 Top Examples + Template]alue Proposition

Step 4: Choose the Right Revenue Streams

Your revenue streams define how your business will generate income, and you need to evaluate each one to select the right fit for your offerings. Whether it’s product sales, subscription models, advertising, licensing, or something else, you must choose the revenue stream that aligns with your value proposition and customer segments.


Step 5: Map Out Key Deliveries 

This step covers how you plan to deliver your products and services to your customers. Create a detailed document for each activity, such as product development, digital marketing, ads, customer support, distribution, investors, and more. Prioritise every step you need to take to ensure operational efficiency, which will help you stay aligned and build a cohesive business model that is sure to succeed.

Step 6: Identify Key Resources

To effectively carry out your business model, it’s important to figure out the resources you need. These can include physical things like inventory, as well as intangible assets like patents and brand reputation. Allocate resources very carefully, focusing on the most important activities.

Step 7: Formulate Partnerships

Strategic partnerships can be a wonder for your business. They can help you reduce costs, expand your reach, and improve your capabilities. Evaluate potential collaborators and outline the terms of your partnerships with a clear vision of what you need to achieve.

Step 8: Financial Liability and Cost Structure: 

Validating your business’s profitability is paramount at this stage. This includes your cost and expense breakdown analysis, which covers fixed costs like rent and salaries as well as variable expenses like production, marketing, and equipment. Balancing your cost structure with your revenue streams will help you determine profitability and determine the prices you will offer to customers to make a profit. Be assertive when deciding on your pricing strategy.

Step 9: Test and Iterate

Testing your business model in the real world is non-negotiable. Collect feedback, analyse results, and be prepared to make adjustments without hesitation. The business model should evolve with changing market dynamics and customer feedback. Stay alert and be assertive when making changes.

Step 10: Constructively Communicate Your Model: 

Your business model is not just a document for internal use but also a constructive communication tool for stakeholders. Therefore, explain it in a clear and positive manner to employees, investors, and partners. A shared understanding of your business’s operations is crucial for achieving alignment and promoting growth.

Practical Example: A Clothing Store Business Model

Women in a Clothing Store

Imagine you own a small clothing store that caters to young adults. And the goal is to provide trendy, affordable fashion that appeals to college students and young professionals.

Bringing It All Together

For this clothing store, a successful business model would look like this: “Providing trendy, affordable fashion to young adults (18-35), leveraging both physical and online sales, and collaborating with local influencers and designers to create a unique shopping experience.”


To succeed in business, it’s important to understand how successful companies create business models that exceed customer expectations and offer competitive prices. It’s helpful to study the strategies of popular brands you regularly interact with. Analyse how they market their products and services and compare their approach to your own. This analysis can provide valuable insights to help enhance your business and meet or exceed customer expectations.


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1 Comment

  1. Hello,

    This is advantageous information.


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