While the innovative nature of the venture means that its exact business model would be a somewhat … [+]
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When entrepreneurs use the term business model, they often mean “how the business earns money.” To understand the implications of this question deeper, however, it’s important to make the distinction between business model and revenue model:
- A revenue model is a narrow answer to that question. The revenue model is the combination of all your revenue streams. It’s concerned narrowly with the area of your business that involves clients transferring money to your organization.
- The business model is a more broad term. It involves the revenue model, but it’s also concerned with other aspects of the business like e.g. the cost structure. (This is well illustrated in the popular