A simple definition of a business model is how every component of your business works on its own and in relation to every other component of your business.
Let’s unwrap that definition. A business is made up of many separate components like marketing, creating and improving the product, finances, employees, consumer relationships, inventory management, and much more. What is important in a business model is that its different components are not just great individually, but work well together. This might sound simple, but it is difficult to make everything fit just right because the details are ever-changing and you have to constantly adapt while ensuring that the overall plan is still tightly put together.
Neither your business model nor your business plan is static. They evolve over time and you must constantly refine them. The stronger your business model is during the planning phase, the better your business will be positioned to succeed.
As businesses get started, grow, and evolve, the management team must constantly evaluate every component of the business model to ensure that they continue to work well together.