What does poor business model mean?

A common mistake of a poor business model is when the business occurs high costs with low profit margin.

A poor business model can also means that the business has no clear commercial or monetisation model.


Definition of business model

A business model is a company’s plan and core strategy for making a profit in its business.

It is the means and methods a firm employs to earn the revenue projected in its plans.

The two levers of a business model are pricing and costs.

Read Mark Johnson’s list of various business models at Harvard Business Review’s article, "What is a business model?", written by Andrea Ovans (2015).

Source: What is a business model? by Andrea Ovans

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Last edited on 18 June 2019.