marketing
Business Model
How the business creates, delivers, and captures value. The shape of the money flow.
Definition
A business model describes how the business makes money: who pays, what they pay for, how much, how often, and what it costs to serve them. Common service business models: project-based (charge per engagement), retainer (monthly recurring), productized service (fixed scope, fixed price), value-based (% of outcome delivered), subscription (SaaS or membership). The model shapes everything downstream - cash flow patterns, sales motion, growth trajectory, valuation multiple. Changing the model is one of the biggest strategic levers available.
In your business
- →Stress-test the model: what happens at 10x scale? Is it still profitable?
- →Recurring revenue models (retainer, subscription) command 2-3x higher valuation multiples than project-based
- →Run a 'model audit' annually - whether your current model is still the right one