A business model is a conceptual framework that outlines how an entrepreneur or company creates, delivers, and captures value. It typically describes the key elements of business operations, including target market, value proposition, revenue streams, cost structure, and distribution channels.

Business models help provide or clarify:

• Direction. A well-defined business model clarifies how a company intends to operate, guiding decision-making and strategic planning.
• Value proposition. It helps articulate the unique value the business offers to its customers and why they should choose its products or services over those of competitors. A clear value proposition helps businesses gain traction early on.
• Adaptability. A clear business model enables the organization to adapt to changing market conditions, technological advancements, and customer preferences. Global emergencies like pandemics and the rise of digitalization have made adaptability indispensable for many industries. 
• Revenue generation strategies. A business model outlines how the company plans to generate revenue, identifying sources such as product sales, subscriptions, licensing, or other income streams. A clear understanding of income models helps ensure a high return on investment.
• Resource allocation. It assists in allocating resources efficiently by outlining the key activities, partners, and resources needed to deliver value to customers. Allocating resources well is especially important in the first two years of business, where gaining new customers and raising income to an acceptable level could take time.
• Investor and stakeholder confidence. Investors and stakeholders often assess the viability and sustainability of a business based on its business model. A well-structured model can instill confidence and increase funding.

One of the most successful business models in recent times is setting up an app business. Using apps to generate income can be cost-effective with the right strategy, given that apps do not require as many physical and human resources as traditional businesses. Apps can also augment what are traditionally considered as non-digital businesses. Choosing the right app development partner is crucial in setting up an app business for success.