A business model explains the way a company is designed. Business plan construction plays an important role in this process. It is designed by business plan consultants who practice business planning consulting and employ business modeling techniques to make businesses more profitable.
It is a business process of project management that explores an organization’s activities in order to identify opportunities for improvement or innovation while reducing risks, costs, and other negative factors described as obstacles by business models or business plans. The application of business modeling can be used at all levels within an enterprise: from strategic planning through operational planning to tactics development through financial analysis.
Business modeling occurs on two levels: the business level (high-level) and the activity level (low-level). On the high-level level, we map out which processes take place inside/outside our organization, how these processes are linked together, and where business processes begin and end. On the low-level level, business modeling focuses on the actual activities that take place within business processes.
Business model construction captures business models using business structure diagrams, business process maps and business process flows. The diagrams are useful for visualizing how the different components of a system work together to create customer value. The study of business models is part of business strategy. The business model analysis looks at external opportunities assessment and market potential analysis while business model management involves operations management planning, strategic planning, project management or financial analysis in order to improve the business model so that it can be used as a tool not only for creating plans but also for operating businesses more effectively.