Business model is a company’s plan or diagram for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the profits it generates.
The main reasons that having a clearly articulated business model is important are as follows: It serves as an ongoing extension of feasibility analysis, it focuses attention on how all the elements of a business fit together, it describes why the network of participants who are needed to make a business idea viable would be willing to work together, and it articulates the core logic of a firm to all its stakeholders.