Simplified Business Model

Abstract

The purpose of this paper is to introduce the concept of business model to small, medium, and as well to large businesses in a simple framework. The paper presents the conceptual framework for the business model grounded with the quantitative business model that emphasizes profit motives. The quantitative business model, which has been in existence from the inception of business and commerce, refers to revenues minus costs and expenses equal to profits. The business model is created with the understanding of the quantitative model that is, and it shows how revenues are generated, profits are made, and costs are managed. The paper presents a simplified framework for developing a business model in a three-step process. In the three-step process for creating a business model, all participants' profit motives are considered critical for the success of the business process. The simple procedure for creating a business model presented in the paper would help both small and large businesses improve the business model creation processes to generate more value for both the customers and the companies.