As I mentioned before, there is no different between online and offline or conventional business. Once you’ve outlined your first thoughts about your new business, it’s time to learn more about a business model. What is in a business model? How does the information in a business model apply to your new business?

There are six basic elements in a business model:

Element 1: Value Proposition – the value your business will provide to its customers; what the value of your business is to your target customers.

Element 2: Target Market – the customers your business will serve; people who will gain from using your product or services.

Element 3: Value Chain — the way your business will be organized to deliver the product or service you provide.

Element 4: Cost Structure and Target Margins — all the sources of business revenues and the contribution each source makes to the total profit picture.

Element 5: Value Network (or, how much money will I need and how will I get it?) - the amount of money you need to launch the business and how much working capital you need to keep it running.

Element 6: Value Network – the unique product or service you will offer that gives your target market an advantage, compared to what your competition offers.

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