What is a Business Model?

What is a Business Model?

The term ‘Business Model’ is all around in recent years: you hear about it in the news, and you read about them in newspapers constantly. It is also a common question asked to everybody that starts a new project or organization: “What is your business model?”

For many creative people, whether they design new fashion articles, create graphic designs, write new pop songs or work on visual art works, the term business model seems abstract and economic. “I don’t have a business model” is therefore the often heard response.

However, this is not true at all. Every individual working on a creative project, and every organization, whether working in the arts or in more commercial fields, whether they are for-profit, not-for-profit, or social-profit in nature, in every instance these cases have a business model. And the essence of a business model goes beyond the mere question of how you make money.

Every project intentionally, or unintentionally has the ability to create a certain value for others. When an architect finds a creative solution to the spatial challenge presented to him/her, different values are created for the client. For instance, the solution might be very functional in the sense that it provides enough bed and bathrooms for the whole family, or the value might be more emotional in the sense that the design could be very unique and the realization of the clients’ long-held dream of their future habitation. Moreover, the whole design process in which the client and the architect pingpong ideas back and forth could be a unique experience for both, bringing another distinct value to the process. The design could also bring value to others, for instance neighbors that now will see the once neglected plot in their street transformed to a beautiful addition to the streets’ aesthetics. Otherwise, the design might call for unique materials to be used in a new and innovative way, bringing new challenges and assignments to the providers of these materials.

As is evident in the example above, by making a unique solution to the design brief, the architect doesn’t just deliver a design, it delivers packages of values to a range of stakeholders: the client, the neighbors, the providers of construction material, etc. And exactly this is the essence of business modelling: Defining what packages of values you create, knowing for who you create these values and finding a manner of system of delivering these values to your stakeholders. If you are able to do this in a well though-out system, you will in the end be able to capture some of the create values in returns for yourself.

A business model is a system through which you’re able to create, deliver, and capture value.

Returns in this sense are not necessarily economic returns. It might be that your goal is to make high profits, in which instance the return that you seek is monetary. But for many creative projects, the aim is not to make a high profit. A positive return resulting from a creative business model could also be an increase in your reputation, a larger reach of your core message, the start of a public debate on certain topics, etc.

So how do you create a strong business model for yourself?

Unfortunately, there is no one-size-fits-all business model solution as every situation is specific and personal. However, there are definitely several guidelines you can follow. On this website you will find an explanation of these principles.

  1. Go over the different articles highlighted on the right hand side of this screen under “Creative Business Models 101” to get started learning more about business modeling.
  2. Read the different posts to understand better how other creative organizations have made specific business model choices that helped them deliver better value.

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