Understanding Business Models
- The primary component of the business model is the value proposition. A value proposition is a description of the goods or services a company offers and why they are desirable to customers or clients.
- A new enterprise's business model also covers projected startup costs, financing sources, the target customer base, marketing strategy, a review of the competition, and projections of income and expenses.
- When evaluating a company as a possible investment, the investor should find out exactly how it makes money by looking through the company's business model.
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