Is there any difference between Business Ideas and Business Models?


15th Feb'22
Is there any difference between Business Ideas and Business Models? | OpenGrowth

The idea is the foundation of a business. It's what initially attracts your customers, and what makes them return. The model is how you maintain their loyalty and ensure that the business will be profitable for years to come.

A business idea is a concept or plan for starting a business. A business model describes how a company makes money, how it interacts with its customers and suppliers, and how it relates to other companies in its industry. 

Where does your idea come from? Is there a need for your product or service in the market? Does anyone want to buy what you are going to sell? It is important that you do some research before you start and grow a business from scratch. Your research will help you develop your business ideas.


The differences between Business Idea and Business Model 

A business model is not just a business idea. It's the collection of activities, resources and processes that deliver value to a customer. You need to understand the difference between a business model and a business idea and it's a difference that is often overlooked. 

To summarize, a business idea is your unique value proposition, while a business model is how you plan to execute that value proposition.


Business Idea

When you compare a business model versus a business idea, we also require complete knowledge of each one better. This will help us to draw some final conclusions appropriately. 

The main goals of a company are frequently related to its business model. At the same time the business idea will be the detailed part of information and steps like Mayple’s marketing strategy.

This detailed information includes information on template, organization, products or services, sales plan, and much more. Here are a few questions that you can use when crafting your business idea:

  • What do we have now?

  • What do we want to have in the near future?

  • What do we need in order to achieve goals?


Business Model

The business model is a structure that a company can make use of in order to create value. It helps an organization manage different types of challenges and move towards success. 

In simple words, a business model and business idea are closely connected to each other. But a business model is the source of making money by selling products or selling services. 

Moreover, you add some value to the products and sell them for a certain profit. The goal is to gain some profit by selling that particular product or service. The most business model has these elements in general:

  • The business strategy is an opportunity that you require. It usually has an ideal customer, the additional benefits of the product or service, and how you are going to sell them to the end customers.

  • This value chain position often refers to the activities that businesses require until it reaches the end-user.

  • The customer value is an estimation of the benefits that consumers receive while purchasing the service or product.

  • The revenue resources must showcase all the cost drivers, including the activities costs.

  • The competitive advantage of the products or services will boost your brand over the existing competition.

Business Model


Few Business Models Examples


  • Production

This is one of the simplest models for a business. It is related to the company’s idea in selling the products or the services it produces. The company should make more sales in order to cover all the production costs.


  • Advertising

This is one of the old business models, and many have adopted this strategy. However, the basic idea is to create attractive content for customers and advertise it to them.


  • Affiliate

This affiliate business model is booming in recent years and is related to advertising. It is used majorly online when advertising is popular offline too. They consist of content forms that act as advertising visuals.


  • Franchise

Another popular business model is the franchise model. Entrepreneurs can sell their business model rights to others in exchange for some revenue.


difference between Business Ideas and Business Models


Ending Thoughts on Business Idea vs Business Model

The main difference between a business idea and a business model is that the former defines a product or service, while the latter describes how it will be produced and sold. As you can see, they are two different things, but both of them are vital for a startup's future success.

A business model is a tool for business management and development based on the analysis of the market, customers and competitors. It identifies key success factors and critical success factors for defining the strategy of a company or project. 

The business model does not try to predict whether there will be sufficient demand for a product or service, rather it describes how to create that demand through marketing activities. Business models describe whole systems of activities, including external relations such as partners, suppliers and regulators.


We at OpenGrowth Academy aim to convert your one idea into a full-fledged business. We are a next-gen platform to nurture your dreams into reality. Visit us to know more about the Academy programs, sessions, and events. Are you excited? Get insights on “How to Measure Product Market Fit” with us. 

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Sajitha is a content writer who predominantly writes for EdTech Industry and also pens poetry, eBooks, and fascinating content. She believes writing should intrigue her audience and work with passion. She is an avid reader and holds her master's in literature. Her hobbies include traveling, music, and self-publishing!