Business model is key to company success

4/22/2011

It's one thing to own one successful business, but it’s a completely different challenge when it comes to owning a successful chain of companies. Business models can help entrepreneurs establish a system that will work throughout their army of stores.

Business models describe how a company generates its revenues by assessing marketplace needs, risks and costs as well as the basic framework that will lead an organization to success. By having a successful business model, entrepreneurs can use the same approach to opening subsequent stores.

"The first item to include is a description of the products and services your business will offer and why customers should purchase them," notes Jim Terrell, senior vice president of business banking for Comerica Bank. "You must consider in your business model how you will transform your product or service into something attractive to consumers and how it will be made available to them."

With small business lending conditions improving, more entrepreneurs are considering expanding their companies. Before they apply for a commercial loan, business owners should be sure they have a business model in place.